ISLAMABAD, Feb 16: In what appears to be a big scam, a government institution has leased out its land and property worth billions of rupees to a private firm for peanuts, without calling any tenders.

Informed sources told Dawn that the National Institute for Folk Heritage (Lok Virsa) has signed five different agreements with Cosmos Productions for provision of built structure as well as huge open space for purely commercial purposes on monthly rent which means nothing when compared with its rental value in the market.

Cosmos was already in default of Rs4 million to Lok Virsa that it owed on its previous agreements when the fresh ones were signed for 10 years in September 2008, one year before the old ones expired.

Lok Virsa Executive Director Mazharul Islam, who is retiring in April, however, justified the new agreements to Dawn saying the contracts were already there and had been “just renewed”.

Interestingly, Mr Islam’s predecessor, Uxi Mufti, had lost his job for presiding over the previous agreements. Lok Virsa employees association had agitated against that “original sin”.

Mr Islam acknowledged that he had sided with the association then but said the situation was different this time. “At that time the decision was taken by an individual. This time a committee made the decisions, with the permission of the culture secretary, and added new terms and conditions,” he told Dawn.

Under one of the “renewed” agreements, Lok Virsa has leased out an area of 4,159 square feet within its premises to Cosmos for setting up a cafe at a monthly rent of Rs31,250 for 10 years.

It will not be just a cafe but will form an integral part of the National Institute of Cultural Studies. It will serve as a training facility for students of hospitality management. Virsa Cafe is already in business, charging customers same prices as five-star hotels.

Other terms of the contract guarantee indemnity to Cosmos in case of any losses tangible and intangible it suffers due to a decision by the government or Lok Virsa. The Lok Virsa has also given undertaking that it will not allow any other company to open a food selling spot on its premises. Another agreement leases out a 50x50 feet shop situated in Super Market to Cosmos to sell music, arts and crafts, cassettes, books, CDs, VCDs, DVDs, gifts, souvenirs and food and beverages.

Lok Virsa will allow Cosmos, subject to approval of the Capital Development Authority, free use of the open space besides its building in Super Market for setting up of a cafe for intellectuals. The lease period in this case is five years with a monthly rent of Rs43,750.

Another agreement rents out 11,000 square feet constructed space and open front area to Cosmos Productions for its office and NICS administration block, for Rs18,000 monthly for 10 years.

Yet another agreement gives Cosmos the marketing and ticketing rights of the beautiful Lok Virsa heritage museum, to split the gate earnings equally. The entry fee for adults is Rs50, Rs10 for students and $5 for foreigners.

But this agreement has a clause that requires the firm to have a budget of Rs2.5 million for museum education and marketing to schools, colleges, universities, tour operators etc and take responsibility for daily operations and maintenance.

Under another agreement, Cosmos Productions will get Lok Virsa facilities at a discounted rate, including its open air and rooftop theatres, Anarkali facade with banquet area, open area for fun fairs, Virsa Gallery, exhibition hall, open terrace, video studio and editing equipment and facilities at a discounted rate. Noise raised by the Lok Virsa Employees Welfare Association (LVEWA) when the management had first offered such largess led to Uxi Mufti’s departure from Lok Virsa.

This time however the management got wiser. It is an open secret that a month before the controversial agreements with Cosmos Productions were “renewed”, some 15 LVEWA office-bearers were given officiating charge in higher grades.

LVEWA President Mohammad Khan, who was a steno typist (BPS 12) then now has officiating charge as publication assistant (BPS 16). Likewise Ali Asghar, assistant (BPS 15), is officiating as superintendent (Administration); Anwar Mohiyuddin, programme executive (BPS-17) as deputy director (Research and Publication); Mohammad Naseer, storekeeper (BPS-11) as programme organiser; Ashfaq Ahmed, superintendent (BPS-16), as administrative officer; Shafiqur Rahman, administrative officer as deputy director and some lower division clerks (LDCs) have been given officiating charge as upper division clerks (UDCs).

Despite these promotions, the association passed a resolution early this month criticising the new lease of life given to Cosmos Productions, but quietly and without agitation.

Cosmos is owned by novelist and dramatist Rauf Khalid.