Islamabad - The proposed amendments in the Capital Development Authority (CDA) Ordinance, 1960 aimed at paving way for the authority to enter into joint ventures with private entities, would soon be tabled in the parliament as the cabinet division is swiftly working to give it a final shape.

“The matter is pending with the cabinet division since months but now it has got attention of the high-ups. Hopefully, the bill to further amend the CDA ordinance will soon be tabled in the parliament,” said a senior official at the Cabinet Division who is directly dealing with the proposed piece of legislation. Once the parliament passes the amendments in CDA Ordinance 1960, the authority would be able to overcome financial constraints in starting development projects through public-private partnership deals. The authority with around 16,000 employees has Rs600 million monthly fixed expenditures. It also owes approximately Rs36 billion as compensation to landowners from whom it acquired land thus leading to financial crunch.

An earlier initiative on part of the CDA had also met a setback as in 2012, the then President (Asif Ali Zardari) had not promulgated the amended CDA Ordinance on the same subject despite the federal cabinet’s approval and the entire process for CDA’s public-private partnership got delayed. The CDA had entered into a joint venture with a cooperative housing society for the development of 54 acres of land in 2008 but the apex court took notice of the matter and ruled that there was no room for the public-private partnership in the CDA Ordinance. The court had observed that an amendment to the ordinance was required for such an initiative. Again the federal cabinet in February this year, in line with CDA’s initiative, had approved the amendments in the CDA Ordinance to allow the Authority to enter into business deals with the private sector but the matter was pending with the Cabinet division since then. It is interesting to note that the incumbent management of CDA had terminated its earlier initiated public-private ventures owing to accusations of malpractices. These projects include the Diplomatic Shuttle Service, the establishment of Centaurus and Grand Hayat Hotel.

According to the amended draft ordinance, a copy of which is available with this scribe, public-private partnership means “a partnership carried out under a public-private partnership agreement between the authority and a private party for the provision of an infrastructure facility, management functions or service with a clear allocation of risks and benefits between the two parties”. The chairman shall form a Public-Private Partnership Cell with the approval of the board consisting of officers from within the authority or other local bodies or agencies as the case may be, which may include representatives from the finance division and independent technical and legal experts on need basis. The authority would seek participation from the private sector in appropriate projects subject to provision of this ordinance and enter into public-private partnership agreements under mutually agreed terms and condition in relation to one or several project planning and management functions such as designing, financing, building, constructing, owning, operating and maintaining infrastructure projects.

The proposed amendments say “Subject to due diligence and appraisal of the project falling in the jurisdiction of the authority with respect to land, acquired or de-acquired by the authority and the prospective private party, the authority may enter into a public-private partnership agreement with a person, through its duly authorised representative in relation to taking possession of acquired land and the planning, designing, development, construction, operation and maintenance of infrastructure facilities; and enter into an agreement with any entity for funding or guaranteeing a public-private partnership project; enter into a public-private partnership instead of development of such part of the capital site by the authority itself, to serve greater public interest that is to say faster development and implementing government policies due to paucity of funds”. The model draft public-private partnership agreement shall form a part of bidding documents and shall clearly define the legal relationship between the authority and the selected private party as well as their respective rights and responsibilities. Under ‘unsolicited proposals’, a person may propose a project to the authority in its own initiative and the authority may consider the unsolicited proposal from all aspects, including technical and financial aspects.

In section 2, a new clause has been proposed to be inserted that says that “concession means grant of a right of a public asset by the Authority in return for stipulated services or a promise that the right will be used for a specific purpose in the form of Build Operate Transfer (BOT), Design Build Finance Operate (DBFO) and any other variant of public-private partnership”.

Similarly, consortium has been defined as “a joint venture of persons, jointly and severally liable, controlled by private investors or at least majority thereof, created for the purpose of forming a private party and entering into a public-private partnership agreement”. In another clause proposed to be inserted person has been defined as “person means a company, entity, firm, association, body of individuals or a sole proprietor other than an agency or a local body”.

Similarly, private party has been defined as “a person who enters into a public-private partnership agreement with the authority and includes a consortium”. Under the draft amendments, landless affectee or dweller shall include a person who is the owner of built up property in form of a dwelling house constructed after acquisition of land who on account of acquisition of land by the authority is being involuntarily displaced from such property and who is the adult successor of an individual whose land has been acquired and whose primary place of residence of property or source of livelihood is adversely affected due to acquisition of land by the authority.