All good things must come to an end, or so the saying goes. Well, this seems quite apt for DHA City investors who were previously euphoric but are now seeing their dreams go up in smoke. Whereas some investors are still enjoying the gains of soaring real estate prices, others are exceptionally stressed as their money is stuck in investments that seem to be going nowhere.
As our previous blog mentioned, DHA City is not even minutely developed and development work does not seem to be commencing any time soon. Moreover, the National Accountability Bureau (NAB) has arrested Globaco (Pvt) Ltd CEO Hammad Arshad on accounts of corruption. The Defence Housing Authority (DHA) signed an agreement with Globaco (Pvt) Ltd to acquire and develop 25,000 kanals of land in the form of DHA City. However, Globaco (Pvt) Ltd was unable to deliver on their part of the bargain.
Want to know the whole scoop? Read on for the details conveyed by a press release disseminated by DHA on January 14, 2016.
DHA City and Globaco
Originally, Globaco (Pvt) Ltd, also known as Elysium Holdings, was required to acquire 25,000 kanals of land under a stipulated timeframe.
- Land for the families of the shuhada and soldiers was to be acquired by November 25, 2012.
- Land for the general public was to be acquired by November 25, 2013.
- Plots for families ofthe shuhada were to be developed by November 25, 2015.
- Plots for the general public were supposed to be developed by November 25, 2016.
So what actually happened? Out of 25,000 kanals of land, only 11,376 kanal was acquired within the project boundary. Moreover, most of it is inaccessible, scattered in patches and in an area where no appropriate housing scheme can be launched. On top of that, much of the land is still under litigation, thus making it useless for the time being.
Although the land acquired is hardly sufficient, Globaco marked 11,715 plots for civilians and raised a staggering PKR 16.942 billion against them. Numerous files (exact amount still unknown) were issued to partners and facilitators of the project as well.
Conveniently enough (I’m being sarcastic!), Globaco only used PKR 1.82 billion of the PKR 16.942 billion raised to purchase land and PKR 15.18 billion were used by the company for personal purposes
DHA now shoulders a liability of 26,315 plots (11,715 plots for the general public and 14,600 plots for families of shuhada and soldiers) and this liability could not be cleared without the help of NAB.
Current status
According to the release, DHA’s management fully pursued Globaco/Elysium Holdings to settle and clear the above mentioned liabilities. However, after no accord, DHA had to refer the case to NAB as Globaco/Elysium Holdings had committed a criminal breach of trust and had defaulted heavily.
According to reports, Globaco’s management intentionally prolonged the project in order to further gain financial benefits.
In the presser, DHA has advised the general public and the affected families of shuhada to properly protect their individual interests and not pay attention to the lies and fabricated advertisements dispersed by Globaco (Pvt) Ltd.
While it is a daunting case and we sincerely sympathise with all those affected, we also encourage investors to properly do their research regarding real estate property before they purchase anything. This was an unfortunate incident and we certainly hope that it is resolved soon.
All the best to DHA City!
Related News
Such Joint Ventures do happen everywhere. It necessarily has to a Junior and Senior partners therein. The senior partner had to keep a close vigil on junior partner’s activities.
The senior partner, in the case of DHA City must logically have been DHA. All transactions must have been through DHA or there should have been a joint mechanism to keep the funds accessible to relevant parties with their mutual consent, in writing.
If DHA is sincere to investors, it must publish the JV agreement to quell doubts in people’s mind. Prima Facie, DHA management seems to be at fault and have reported to NAB just to camouflage the in competencies and corruption within its inner cadres. DHA top management much investigate the case thoroughly.
Blog says that Rs., 1.82 billion of the Rs., 16.942 billion raised to purchase land whereas Rs., 15.18 billion were used by the company for personal purposes. How !!!!, Unbelievable. At least I could never ever believe that Globaco did it without the consent of their senior partner.
I strongly suggest that the competent authorities must constitute a bench bench comprising of of sitting judges to investigate the case and recommend an exemplary punishments to the culprits.
Anam I think you need to realize that you have a big responsibility writing a blog on an international platform like Zameen. Your blog sets the tone here that DHA City is going up in smoke which is not the case. DHA is finally fighting for its investors and all associated ads from DHA clearly state that it is committed to its customers. DHA City was a Eden-DHA joint venture but is now a 100% DHA project which means DHA wants to complete this project instead of treating it as an orphan. In fact DHA City has its own office in phase 6 DHA headquarters now. Please visit the 2nd floor and you will see a dedicated DHA City team. DHA City prices have gone up by 3-5% ever since NAB started probing into the case which means relief is expected for all DHA City investors. It is only a matter of time before DHA announces some great news. Inshallah.
INSHA ALLAH
Miss Anum Jalil, I am very much impressed after reading this article. It has cleared up many queries of my mind. The 26K families will be suffering a lot after this news. But they would be in real suffering before but new came up in lime light now. Thanks for sharing.
As far Mr. Sheraz comments are concerned. If DHA is fighting or not, that is not important now. The real factor is not price. The real factor is that there is no location of project and no land of 25000 kanal for project. The amount of buyers which is more than 16 billion is eaten and now NAB is doing bargain which will extract only 1-2 billion.
Great blog. It has clarified the confusion surrounding DHA City project to a large extent!
@Sheraz: Well it’s good to be optimistic and hope that since DHA is finally fighting, that means positive. But you are ignoring some real hard facts, such as
1) over Rs 15 billion of money was plundered from general public and its not recoverable still. Without these funds how can DHA set up a new society?
2) There is no location. Previously people bought just out of speculation that the DHA City will be located near Thokar Niaz Baig, but now we know that the location is unknown.
3) Not a single land is being bought. Purchase of land is the first step BEFORE the project is launched. This project was launched many years ago. Imagine how many years it will now take to purchase the land.
4) There is a lawsuit now on this project which (by Pakistani courts standards) means decade can even pass for successful resolution and the project to get a go-ahead.
Prudent approach is to get out of this project as soon as possible without having false hopes. Obviously with such a massive scandal DHA is going to fight back. But it will be just to salvage their reputation for their other projects which will be delivered much earlier.
Very good blog regarding DHA city. It is very clear that this type of scam cannot be done by one party alone. It is done when one party deliberately keep their eye closed due to some vested interest and this is not new. Similar scam occurred in DHA Islamabad as joint venture with Bahria town with the name of DHA valley. Let’s hope for the best , because GHQ intervene for DHA valley and we hope that they will again intervene in DHA city .
Thanks
Last paragraph gives hope to poor investors in DHA City ( DHA City EME) that their investment will not go into drain. They trusted the name of DHA, They trusted Pak Army.How an individual or even a company can deceive DHA and ARMY SENIOR OFFICERS. nab TO PROBE and find the answers. Investors are desperately looking to NAB for some results.
Great blog, can the files still be purchased and sold through DHA while the case is in NAB?