Govt plans compensation for One Constitution Avenue apartment owners

ISLAMABAD: The federal government has decided in principle to compensate owners of apartments in One Constitution Avenue by paying back the amounts they originally paid for their units, with a formal announcement expected after Prime Minister Shehbaz Sharif grants approval.

According to an official notification issued by the Cabinet Division, a high-level committee formed by the prime minister has started examining the legal and administrative dimensions of the matter.

The committee is headed by Law Minister Azam Nazeer Tarar. Its members include Minister of State for Interior Talal Chaudhry, as well as the secretaries of the Cabinet Division and the Commerce Division.

The body has been assigned to review all related cases, hear the concerns of affected apartment owners and recommend a balanced way forward that addresses grievances while remaining in line with court orders. It is due to submit its report to the prime minister by May 8.

Until a final decision is made, the authorities concerned, including the Capital Development Authority (CDA), police and the district administration, have been instructed not to take action against residents.

Background of the dispute

The controversy is linked to a long-running dispute over the project. In 2005, the CDA allotted 13.5 acres to a private developer for the construction of a five-star hotel. The company obtained the lease for Rs4.8 billion and was handed possession after paying an initial 15 per cent amount.

However, the developer later defaulted on payments, which led to repeated rescheduling and litigation over the years.

In 2019, the Supreme Court of Pakistan directed the developer to pay Rs17.5 billion to restore the lease. So far, the company has paid Rs2.9 billion and remains in default by around Rs14.5 billion. As a result, the lease was cancelled in 2023.

Officials have also said that the developer built 263 residential apartments at the site in violation of the original agreement. They said transactions continued despite public notices warning buyers that the project was under dispute.

Occupancy and recent action

At present, 69 of the 263 apartments are occupied, while most of the units remain with investors. Officials said only a small number of the occupied apartments are being used as permanent residences, while many are rented out on a short-term basis.

Following directions from the Islamabad High Court, CDA officials, accompanied by police, recently served seven-day eviction notices on occupants in compliance with court orders.

Despite the earlier warnings issued in connection with the project, the government has now moved towards compensating affected buyers, indicating a conciliatory effort to settle the long-standing dispute.