ISLAMABAD, Nov 20: In all there must have been around 80 people gathered at the Jinnah Convention Centre to participate on the second day of the “grand open auction” of 10 commercial plots.
Right outside the premises, bidders were seen disembarking from pricey SUVs, BMWs and other fancy cars, a token reflection of the kind of money that was expected to flow in the actual auction over the rest of the day.
As the bidding became intense, and phone calls were made, text messages exchanged and knowing looks shared, somehow the amount of money rolling did not increase at the same pace.
By the end of the day even as the civic agency issued a press release stating it expected to make Rs4 billion from the auction, many knew that it had missed out on a large chunk of revenue by the under-pricing by property dealers.
The day nevertheless was eventful: while some bidders threw only numbers at the podium, others took the opportunity to make choice comments about the performance of the Capital Development Authority (CDA).
“You are selling us commercial plots but not limiting the commercialisation in residential units,” commented one property contractor, hitting on the non-conforming use of residential plots for commercial purpose.
Also, the events of the day put paid to any reservation about only “blue-eyed” property dealers participating in auctions of the CDA.
Once the bidding had started, it was quite clear that a few property contractors had come prepared to gang up and monopolise the bidding process of commercial plots to suit their business model instead of suiting that of the CDA — they had discussed the pricing mechanism to lift multiple plots, and could be seen collaborating as well.
“Support me for this plot and let me finish with my announced bid,” one of the property dealers could be heard asking a fellow bidder at one stage, who willingly complied.
Many other property dealers and frontmen were constantly briefing their bosses and investors on mobile phones about the bids, and played an unhealthy role during the auction which lasted till late in the evening.
Out of the four commercial plots offered for auction in the Blue Area’s commercial centre, the highest bid of Rs360,000/sq yd was made for Plot No.B-3 located in between Sector F-9 and G-9 and measuring 1333.33 square yards.
However, there were some glaring discrepancies for the auctioning in Blue Area.
For instance, the difference in bids for two adjoining Blue Area plots measuring 2666.66 square yard came to Rs67 million.
Commercial Plot No.5 in Blue Area between Sectors F-8 and G-8 was purchased by Senator Shaukat Bangash for Rs313,000 per square yard, generating almost Rs834 million.
On the other hand, Plot No.6 was sold for Rs287,000 per sq yd, yielding Rs767 million. This was also the lowest bid made in the Blue Area.
“This is one shady transaction since the property contractors had clubbed to manage the price of the plot and lifted it on quite low rate,” claimed a civic agency official sitting at the auction.
The official, refusing to share his name, asked that it would be strange on the part of the CDA if “it gives a green signal to the purchaser of the Plot No.6.”
On the other hand, Senator Bangash while talking to Dawn insisted that he was willing to purchase the adjacent plot on the same price of Rs313,000 per square yard.
A filling station located on the Northern Strip of sector E-11 was also sold at an unusually low rate.
“The filling station was sold for Rs180 million. It measures 2,184 sq yd and could have easily fetched around Rs200 million,” claimed an official of the estate wing.
However, the spokesman for the CDA clarified that all the bids will be scrutinised by a committee which would later forward its submissions to the civic agency’s board.
“We always have a reserve price on all commercial plots, and any bid lower than the internally set price is cancelled,” the spokesman added.
The auction process held at Convention Centre was headed by member finance Azhar Ali Chaudhry, who is under tight scrutiny of a number of federal government officials since he has been tasked to fill the almost dried accounts of the civic agency.