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Parliament body recommends to cancel lease agreement of Hayat Regency Hotel Karachi

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

The PAC met under the chairmanship of Noor Alam Khan here on Tuesday. The Auditor General of Pakistan has presented 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 in April 2019, it was observed that Hayat Regency Hotel project comprising 10,207 square yard 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 land was Rs.612.42 million. The annual lease money/rent was Rs0.56 milllion for ten years from 2004 to 2014. The lessee paid the advance lease money only for the first year. Thereafter, the lessee paid annual lease money with a delay of 58 days to 1172 days and committed 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 Rs612 million. This depicts negligence and slackness of the part of management.  

The audit commented that a period of 18 years has been elapsed, whereas, the lease deed was not cancelled and the possession of the land could not be retrieved.  

The Chairman Committee questioned why you have not canceled the lease yet? 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 compliance report must be submitted within 30 days.  

It is pertinent to mention here that the annual rent was required to be paid to the Ministry of Railways annually in advance under the clause-2 of the lease deed executed between Ministry of Railways and the AKD on May 24, 2004.  

Further, clause-7 of the lease agreement, in the event of any breach of the terms and conditions of the lease the lessee shall be entitled to terminated 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 leaser.  

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