PAC Recommends Cancelling Lease of Hayat Regency Hotel Karachi - AsiaNet-Pakistan

PAC Recommends Cancelling Lease of Hayat Regency Hotel Karachi

January 10, 2023 | | Share:

The Public Accounts Committee (PAC) of the Parliament has recommended Secretary Railways to cancel the lease agreement of Hyatt Regency Hotel Karachi on nonpayment of rent for the last ten years.

The PAC met under the chairmanship of Noor Alam Khan here on Tuesday. The Auditor General of Pakistan presented an audit report related to the Ministry of Railways for the fiscal year 2019-20.

During the audit of Railway Estate Development and Marketing Company Rawalpindi, it was observed that the Hyatt Regency Hotel project comprising 10,207 square yards of Railways land was leased out to Aqeel Karim Dhedhi Securities (Private) Limited (AKD) for 99 years on 24-05-2004.

The leased value of the land was Rs. 612.42 million. The annual lease money/rent was Rs. 0.56 million for ten years from 2004 to 2014. The lessee paid the advance lease money only for the first year. Thereafter, the lessee paid the annual lease money with a delay of 58 days to 1,172 days and committed a default by not making advance payment of annual lease money for the remaining terms.

The audit officials further told the meeting that no record pertaining to receipts from the lessee for the period from 2011 to 2014 was found. The auditor was of the view that undue favor was extended to the lessee by not terminating the lease deed valuing Rs. 612 million. This depicts negligence and slackness on the part of management.

The audit commented that a period of 18 years has lapsed, whereas, the lease deed has not been canceled and the possession of the land is yet to be retrieved. The committee chairman said that the lease must be canceled immediately and the possession of the land should be taken back, the contractor should also be blacklisted.

Noor Alam Khan further said that the responsibilities should be fixed and the compliance report must be submitted within 30 days.

It is pertinent to mention here that the annual rent was to be paid to the Ministry of Railways annually in advance under clause 2 of the lease deed executed between the Ministry of Railways and AKD.

Further, as per clause 7 of the lease agreement, in the event of any breach of the terms and conditions of the lease, the lessor shall be entitled to terminate this deed without any notice and without being liable to pay any compensation whatsoever, and the amount paid by the lessee in terms of clause-2 of the un-expired period shall stand forfeited to the lessor.

Source: Pro Pakistani

Category: General