ISLAMABAD: The Directorate of Municipal Administration (DMA) has terminated its contract with a private company responsible for collecting parking fee after digitising the system, citing `repeated violations, negligence and financial irregularities.

However, the company claims that the DMA has revoked the agreement in violation of a stay order granted by a local court.

According to DMA statement, the decision to revoke the agreement followed the company`s failure to meet its contractual obligations, `compromising public safety and causing significant revenue losses.

The DMA stated that investigations revealed that the private company, AJCL, failed to install the promised digital payment systems, engaged in `unrecorded cash transactions and neglected essential security measures, leading to thefts and public inconvenience.

`Despite multiple warnings, the company refused to rectify these issues, forcing the DMA to take legal action. An FIR has been registered at Kohsar police station, and the contract has been revoked, read the DMA statement.

The press release further said since taking over parking operations directly, the DMA has seen a notable increase in revenue, demonstrating the benefits of transparent management.`AJCL has since filed a lawsuit against the DMA, which the administration will contest firmly in court,` the statement added.

It is relevant to note here that the DMA, last year, signed the contract for various parking sites with a 100 per cent increase in parking fees, from Rs50 to Rs100 for cars, putting the burden on citizens.

The company was supposed to collect parking fees, and the revenue was to be shared between the DMA and the company on a 75pc (DMA) and 25pc (company) basis.

Justifying the revocation of the agreement, a DMA official said they had taken over the sites, and now their revenue had improved significantly.

`As far as the manual system is concerned, this is a stopgap arrangement, and soon we will go for a new tendering process to have a proper digital parking system,` the official said.

The official added that the DMA would defend its decision in court and before the arbitrator as well.

He said that after taking over the parking sites, revenue collection saw a significant increase, as the DMA collected Rs1.58 million from June 6 to 15, while thecompany had collected over Rs1 million from May 11 to 20.

Responding to the company`s claim, the DMA official expressed ignorance about the court`s stay order in the case.

Company`s claim A company`s representative, on the other hand, said they had a valid stay order till June 24, 2025, but despite this, the DMA revoked the agreement, and they were now contesting the case in court.

The company rejected the claims made by the DMA regarding the termination of the contract.

`We present this rebuttal to set the record straight and to highlight the gross contractual violations, institutional apathy and deliberate non-cooperation by the procuring entity that obstructed the successful implementation of this important public service.

The company representative alleged that contrary to the stated goals of transparency and automation, the DMA had reverted to a manual, fully cash-only system, despite having access to a fully developed digital solution, including handhelddevices, dashboards, mobile apps and NFC/cloud architecture.

`This decision appears to serve those inconvenienced by financial transparency, removing digital audit trails and facilitating untraceable revenue leakage,` the company claimed in a statement.

It further said that, as per the agreement, the directorate was responsible for ensuring site readiness, including electricity, drainage, lighting and unimpeded access.

However, these facilities were not provided at most sites, making it impossible to operate the electricity-based digital systems.

`The AJCL submitted over 150 formal letters documenting these and various other issues, and expended its own resources on surveys, vehicle counting, traffic studies and parking-lot design plans, but received little more than evasive, non-committal responses,` the company claimed.

The company claimed it had deployed entry/exit barriers at sites with electricity and handheld devices as a backup solution at locations where basic necessities such as electricity were not provided, so that there could be a digital record, a real-time dashboard, a custom mobile app uploaded in November 2024and various other digital features. All were provided.

The company said CDA/MCI neither utilised the training provided nor the dashboard.

`The AJCL delivered a complete solution but was undermined by bureaucratic dysfunction, lack of interest and vested interests who stood to lose from the implementation of a transparent and fair system. We stand by our work and remain open to audit, arbitration and public scrutiny,` the statement concluded.