ISLAMABAD: The Auditor General of Pakistan (AGP) has called on the Capital Development Authority (CDA) to launch an inquiry into the irregularities surrounding the auction of 29 commercial plots valued at Rs. 37.82 billion. The recommendations are part of the AGP’s Audit Report for 2022-23.
The AGP’s report flagged a lack of transparency in the auction process and called for accountability to determine responsibility for the irregularities. It also emphasized the need to justify changes in the criteria used for setting base prices and demanded the provision of detailed data supporting the calculation of these prices.
A critical issue identified in the report was the failure to deposit pay orders received from prospective bidders into a bank. These pay orders, which are meant to demonstrate financial commitment in bidding processes, were not authenticated by the issuing banks. As a result, the possibility of fake pay orders could not be ruled out, further undermining the credibility of the auction process.
According to the report, bids received during open auctions must be evaluated and approved by the CDA Board. The evaluation criteria, approved by the Board on June 3, 2011, required the Finance Wing to submit key details such as previous sale prices, the General Price Index (GPI), and market trends. This data was intended to help the Board decide on the acceptance or rejection of bids.
However, an audit of records from the Director Estate Management-II, CDA, revealed gaps in compliance with these procedures. The CDA Board approved the results of the auctions held on August 4 and 5, 2021, during its meeting on August 26, 2021. While bids for 23 plots amounting to Rs. 37.82 billion were accepted, five plots were deferred due to low bidder interest, and one plot was withdrawn over legal issues.
The audit noted the absence of essential records, including detailed calculations for auction prices, GPI trends, and reserve price determinations. It remains unclear how the CDA arrived at the reserve prices for the auctioned plots. Furthermore, no documentation was available concerning the five deferred plots or the legal complications associated with the withdrawn plot.
The report criticized the CDA’s decision to alter the auction criteria from using the highest sale price to the average sale price of the year. This move was deemed imprudent and inconsistent with market trend criteria, raising further questions about the integrity of the auction process.
The AGP concluded that the acceptance of bids without detailed calculations and analyses of previous sale prices, GPI, and market trends resulted in a non-transparent process. It called on the CDA to address these lapses through a thorough investigation, ensuring accountability and compliance with established procedures for future auctions.
