REFERENCE / COMPLAINT NO. VII

Reference dated 11-6-2001 – Billion Rs Irregularities in Defence Land Deals

June 11, 2001

Lieutenant General Khalid Maqbool
Chairman
National Accountability Bureau
Chief Executive’s Secretariat
Islamabad

Dear General Maqbool,

I write to draw your attention to a news item published in ‘The Nation’ dated
June 09, 2001 captioned “Rs. 1.16 b irregularities in defence land deals”.

The details of irregularities speak of massive mismanagement which caused large financial loss to the national exchequer.

PPP hopes that NAB will undertake a serious probe into this mismanagement with a view to bring the culprits to book.

Sincerely,

(Jahangir Bader)
Secretary General

The Reference / Complaint is based on the source incorporated as under :

Rs 1.16 b irregularities in defence land deals
The Nation - Saturday, June 09, 2001

ISLAMABAD - The military authorities misappropriated Rs 1.164 billion in the acquisition of private land for defence needs and disposal of state-owned extra land for three defence services of Pakistan, reveals a special audit report of May 2000 of Auditor General of Pakistan. The AGP's findings discovered eight cases of mismanagement of Rs 854.195 million, 11 cases of non-recovery of Rs 114.997 million, nine cases of Rs 102.497 million of the misuse of land, 17 cases of overpayment of Rs 29.155 million, and five cases of miscellaneous irregularities of Rs 44.267 million excluding 10 cases of encroachments.

These cases pertain to non-realization of sale and income proceeds of defence land, transfer of leased money in private accounts, overpayment due to less determination of the average cost of the land, overpayment of compensation owing to higher rates of purchased land, unnecessary litigation and acquisition of land, violation of rules and procedures, encroachment, unauthorized use of military land and exaggerated calculation of market value of land acquired by the military authorities.

The state exchequer suffered a loss of Rs 315.364 million as a result of mismanagement in the acquisition of land for defence complex at Islamabad by officials dealing with estate land, disclosed the special report. The rate paid for the pieces of land for the purpose of construction work of Naval Headquarters, Air Headquarters, General Headquarters (GHQ) and Defence Complex were higher in comparative terms which led to an excessive payment of Rs 161 million in violation of the set rules and procedures, the report pointed out.

Notwithstanding the fact that defence work was carried out by respective services of the armed forces, an amount of Rs 154.275 million was paid unnecessarily as development charges for 1,165 acre area for the construction work of GHQ.

In another case of financial misappropriation, in September 1985, GHQ paid Rs 15 million to a person to purchase a building for Army Burn Hall School/college, which auditors discovered was illegal as the building was already property of the government of Pakistan and was being misused privately without payment of rent and allied charges.

The report also detected a loss of Rs 277.059 million due to unjustified payment at higher rates to purchase 1363 kanal and 19 marlas for defence purpose at Taxila. However, the total amount of the land was not deposited with Assistant Collector Taxila at the time of its purchase on September 30,1990.

The estate officials concerned deposited the arrears in late 1994 with the collector. The auditors found an abnormal increase in "artificial transactions of transfer of land" at higher rates, the report detected. The report explained that artificial transaction of land was an attempt to increase one year's average of cost of the land (yak sala aousat) from 1990 to 1994.

The report pointed out illegal occupation of state land by the heirs of late Field Marshal General Muhammad Ayub Khan. In December 1958 when General Ayub was the military dictator of Pakistan, he was granted "free-hold rights of the land' under which he acquired 28 acre land in R.A. Rukh, Abbottabad and 5.68 acres of land in camping ground Haripur as private exchange to land measuring 8 kanal and 16 maralas in Kotha Kalan, Rawalpindi.

The ownership of the land measuring 8 kanal and 16 marlas continues to remain in the name of heirs of the late dictator. However, the military authorities opted not to transfer it back to the federal government, it noted.

The report also pointed out lack of foresight of army officials on fundamental routine legal matters which caused a loss of Rs 240 million in uncalled-for litigation in various cases including the one in which a piece of land was acquired for the expansion of Kakul Military Training Academy, Abbottabad.