English News (Corruption News)

Mining leases, polluted land converted into housing society PART-2

The News

September 19,2013

Senior member Board of Revenue Shahid Gulzar Sheikh initially promised to share information about the deal with The News.However, soon after getting written questions about illegal conversion of mining land into residential land, he changed his mind and refused to comment on the issue.“I don’t know anything about it,” he said in a decisive tone before disconnecting the call. Later, he did not answer calls by this correspondent despite dozens of attempts. When contacted, Commissioner of Karachi Shoaib Ahmad Siddiqui said he was also not in the loop about the lease transfer.He added that converting mining land into residential land is not allowed legally but his office has no record of any such conversion. Siddiqui said he had also checked with his predecessors but no such record could be found in the Commissioner’s office. When asked about the dubious deal, the CEO of Javedan Corporation Limited, Arif Habib confirmed that hundreds of acres of land were acquired along with JCL but claimed that there were no irregularities in the process. “We had beaten the other bidders in a fair competition so it was our right to procure the company,” Habib told The News. When asked about the illegal conversion of hundreds of acres of the mining lease into housing lease, he said: “I am not aware of this development.”Habib said there was no illegality in ceasing cement business after privatisation of the company as it was the right of buyer to change the nature of business. “The residents of the area did not want us to produce cement anymore as the production was causing problems for them,” he said. Ironically, for this statement by Arif Habib, the area around Naya Nazimabad site possibly including Naya Nazimabad itself is polluted with cancer-causing Asbestos according to an independent environmental report ordered by the Supreme Court of Pakistan. No clean up for this has been done exposing residents to cancer. The cement company considered redundant by the visionless or possibly corrupt baboos of previous governments became a gold mine for ruthless profiteers who gave false assurances of keeping the plant running. Experts believe the current value of the land is estimated at 60 million per acre (Rs12,500 per yard). The Privatisation Commission officials of the previous government not only failed miserably in assessing the real value of the company but also turned a blind-eye to the post-privatisation irregularities on the part of buyers. When contacted, the officials of the new Privatisation Commission refrained from answering the key question on the illegal conversion of company’s mining land into residential land.“Privatisation of Javedan Cement was carried out in an open, fair and transparent manner. Javedan Cement was not privatised at throwaway price,” the Commission’s spokesman said.He claimed that Javedan Cement land assets were not assessed at below market price. According to Javedan Cement Annual reports and submissions they refer to the Naya Nazimabad land as leased land for 99 years at some points and freehold land in other submissions. Not only that no detail is given of any industrial clean ups as required for such a site internationally. Also there is no answer on how mining leases converted to residential leases without paying proper fees. There are several other vital questions regarding the future of the society. How will the lease be protected for the buyers of this project? How will they get title to their new home? Also how are banks financing this project given all these irregularities? All this remains unclear. JCL was a public limited company listed on the Karachi Stock Exchange since 1962. The state-owned company located in the north of Karachi, started production of cement in 1964. It was manufacturing and marketing ordinary Portland cement, blast furnace slag cement and sulphate resisting cement. Its production just before the privatisation in 2004-05 was 476,415 tonnes of cement and 396,508 tonnes of clinker. But the working plant was shut down causing loss to the country by its new owners. The flawed privatisation of JCL was similar to the flawed deal for Pakistan Steel Mills (PSM) also done by Habib during Musharraf’s era and would have also cost losses worth hundreds of billions to national exchequer if the Supreme Court had not taken suo moto notice, reversing the decision. His backdoor entry into the Javedan Cement privatisation behind Haji Ghani and Shunaid Qureshi raises serious questions about his intentions towards PSM. Habib, however, vehemently rejected all these allegations. He said PSM deal had no link with him, nor he had any plan to enter any such deal. PSM had 19,600 acres of precious land which is valued at Rs950 billion at the market cost. Insiders claim that previous bid for PSM privatisation was also aimed at stopping production and turning this national icon into a land development just like Javedan.