ISLAMABAD: The Capital Development Authority (CDA) suffered a loss of Rs1,668 million as the Supreme Court Bar Association (SCBA) allegedly violated an agreement with the city managers on the utilisation of a plot.

The auditors of the civic agency this year pointed out that in 2011 the SCBA had been allotted a 4,000-square-yard plot in Sector G-5 at a subsidised rate for the construction of a bar building and a hostel.

The CDA allotted the land to the SCBA against the nominal rate of Rs4,500 per square yard.

However, the auditors said the SCBA did not utilise the plot for the purpose for which it had been allotted the land.

At present, `Grand Ambassador Hotel` is being operated in the building constructed on the plot.

`The plot was leased out on the subsidised rate for a specific purpose but now the lessee has changed its use. So either the lessee should be asked to stop the activity or the lease amount be recovered at the actual market price,` theauditors said.

But as the lessee didn`t stop the activity, the CDA sustained an approximate loss of Rs1,668 million because of the nonrecovery of the money at the market rate.

When contacted, a CDA officer requesting not be named said in violation of the terms and condition of the lease the SCBA set up a commercial hotel on the plot.

He said the civic agency had issued a notice to the SCBA for breaching the conditions of the allotment agreement.

Meanwhile, the CDA`s audit document stated: `During the scrutiny of the building plan file of the plot leased to the SCBA, it has been observed that the land was allotted to the SCBA in 2011 at the subsidised rate of Rs45,00 per square yard amounting to Rs18,000,000.

The document added that the lessee utilised the plot for a purpose other than the one mentioned in the allotment agreement. It established `Grand Ambassador Hotel` in the building and signed a 10-year agreement with Zafarullah Khan Marwat, the director of the hotel, for a Rs2.7 million per month rent of the building.

The document also showed that a notice was issued to the president SCBA in February 2016 for stopping the non-conforming use of the plot.

However, neither the lessee stopped the violation nor the allotment of the land was cancelled by the CDA.

`According to condition 20 of the allotment letter issued to the president SCBA on March 8, 2011, the lessee shall not be allowed to use the plot for any purpose other than the con-struction of a building,` the document showed.

When contacted, President SCBA Ali Zafar said there was no illegality and violations of rules. He said the plot was meant for the lawyers` hostel building, and a `hostel is operating there.

He said the agreement did not bar the SCBA from involving a third party.

`Since lawyers cannot run a hostel, we involved the ambassador hotel,` he said.

When told that the hotel was a commercial entity and was renting out rooms, which the CDA described as a violation of the agreement, Mr Zafar said: `For running its expenditure, the hotel management might be renting out rooms but there is no violation of rules and regulations.

About CDA`s claim that it had faced a loss of Rs1,668 million, the president SCBA said: `No doubt we were given the plot at a subsidised rate but making comparison of this plot with other commercial plots is highly strange.

He said it seemed that the CDA could also claim that had it not given plots for the parliament building or the youth hostel, it could have earned huge revenues by allotting these plots to commercial entities.

He said the CDA had served a notice on the SCBA and currently a case was being heard by the CDA court. `We will clarify to the civic agency that the plot was meant for a lawyers` hostel building and we are using it for the same purpose through the management of the ambassador hotel,` he said.