LAHORE: The Lahore Development Authority (LDA) registered a fictional bidder in order to be able to auction a massive commercial plot in the planned Finance and Trade Centre (FTC) in Johar Town, The Express Tribune has learnt.
In its second attempt to auction the plot reserved for a superstore, LDA sold the land to Federal Employees Benevolent and Group Insurance (FEBGI) for just over Rs1 billion at the LDA Community Centre in Muslim Town.
The first attempt to auction the superstore plot and another for a hotel at the same site last month failed as only one investor made a bid. Under LDA rules, an auction requires at least two bidders.
An LDA official told The Express Tribune that senior officials, fearing a repeat of last month’s failed sale, had decided to create a fake investor profile so the auction would not have to be suspended again. The official said that the LDA director general was under pressure to ensure that a sale went through, as he had personally assured the chief minister that the LDA would generate the funds needed for the Rs3.5 billion Canal flyover on Ferozepur Road, construction of which began last month.
The sale was supervised by the LDA’s auction committee including the chief town planner, the finance director, estate management director as well as all the four directors for land development at the LDA. The director general did not attend yesterday’s auction.
The auction was scheduled for 10am, but did not start until 12:30pm.
The reserve price for the 90-kanal superstore plot was Rs11 million per kanal, and about five minutes after making a bid of Rs11.25 million per kanal, Wali Muhammad, representing the FEBGI Islamabad, was declared the successful bidder. The other bidder was said to be a Haji Tariq from an unidentified company. There were no bids for the 114-kanal plot reserved for a hotel.
According to the LDA official, Haji Tariq is a fictional investor. Nauman Khan, director for estate management, denied this, saying the person had registered as a bidder by making a security deposit. He said that the auction had been delayed by a couple of hours because the second bidder had called to seek more time to arrange for funds. Asked what company Haji Tariq was representing, he said that he didn’t know as he had left the Community Centre to attend a meeting with the district coordination officer and had been unable to meet Tariq at the auction.
Tariq Sana Bajwa, former nazim of Data Ganj Bakhsh Town familiar with the function of the LDA, said that the rules required that an auction have at least three bidders, but in special circumstances the rules could be relaxed so that an auction could be held with only two bidders. “If they had only one genuine bidder, they can be challenged in court,” he said.
The LDA has reserved 1,123 kanals for the FTC and Rs500 million has been allocated in this year’s budget for its development, but there has been no work on the ground yet.
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