Three former generals explain real facts behind Railways and Royal Palm deal

  • Hold Saad Rafique responsible for negative propaganda 
  • Want NAB to take these facts into account
  •  Vows to fight the case in court of law

   By Kiran Bokhari

   (Pak Destiny)  The three retired army generals have explained the ‘real truth’ behind the Pakistan Railways’ deal with the company that developed Royal Palm Golf Country Club in Lahore.

“There has been no charge of financial corruption. Allegations against them and the firm in question are based on procedural mistakes and the allegation is of misuse of authority,” reads a statement issued by retired Lt Gen Javed Ashraf (former railways minister), retired Lt Gen Saeeduz Zafar (former chairman railways) and retired Maj Gen Hamid Hasan Butt (former acting chairman railways).

They say: “Railways was totally inoperative in 1999. The government was then under multiple sanctions.  No funds were available with the railways.  NSC and Cabinet meeting in Dec 1999 authorised sale of railways land for fund generation to rehabilitate the ‘sick railways’.  A Railway Board was set up with all powers given to the executive committee of the board to take all immediate decisions on its behalf.”

Over 140 acres were allotted by British government in 1940 for a golf course but in 1980 it was reduced by Railway to 103 acres due to illegal housing colony for retired rly officers and other encroachments by local land mafias.

The three retired army generals have explained the ‘real truth’ behind the Pakistan Railways’ deal with the company that developed Royal Palm Golf Country Club in Lahore.

“The golf course was leased for 33 years @ Rs 12 per annum to Mr Ishaq Khakwani and associates in 1980. We decided not to sell any land but lease out surplus land for fund generation. The neglected golf course was one such piece but it had to retain its character as a golf course. We cancelled Rs12/year lease with adequate notice as per Lease Agreement and ordered Railway to invite bids for converting it into an international standard golf club. Cancellation was challenged in the Lahore High Court by Ishaq Khakwani and associates but decision given by Justice Ramday against Mr Khakwani in 2001.”

The generals further say: “First sketchy advertisement (EOI) given by Mr Shafiq ullah Director Marketing (Railway officer) but no bids were received as none were called for.  Shafiqullah was posted out and a Professional marketing dept was setup with help of Dean of LUMS, who interviewed and selected the team. Mr. Khalid Naqi,an ex Dir Marketing Aero Asia  on his recommendation was made Director Marketing Railway.  Mr Khalid gave 2 further advertisements inviting bids in Aug and Sept 2000.  No lease period was mentioned which was kept negotiable. Experience of making golf course was a must.  A five star hotel was planned as phase 2 and reflected as such in the last advertisement. Those who may have applied earlier were asked to apply again. Bidders had to bring their own investment. No railway investment except land which was not allowed to be used as collateral for loans. All construction on the new golf course was to become the railway property without any compensation.”

In subsequent events the generals say “Papers were collected by six parties but finally two parties

competed against each other. These were Pakistan Services limited of Hashwani and a consortium of Maxcorp( Malaysians) and Hasnain Construction. While negotiations were done by the Marketing Department, an Evaluation Committee was set up to evaluate the bids and recommend the best bid. The final contract was to be approved by the Executive committee of Railway Board headed by the Chairman.  During negotiations with bidders Rly offered 33 years lease but bidders demanded 66 years since they considered 33 years not enough to recover investment. Final agreement was 49 years. Both bidders considered 103 acres insufficient land for international standard golf course and a 5 star hotel. Decision taken by executive committee of Rly to increase land by demolishing 80-100 year old Rly colony on the canal bank adjacent to the Golf course to make it 140 Acres. All parties were informed through a letter accordingly. The Railway Minister’s staff conference on 2 July 2001 endorsed this decision of executive committee taken on 26 June 2001.  Original bid documents and evaluation committee proceedings, along with some other important minutes of meetings are missing. An inquiry held could not assign responsibility. The entire record had remained with the Railways throughout this period. No such report was made earlier. It surfaced after our departure from Railways whem Ishaq Khakwani became Minister of State for Railway. The final winners were the consortium in which Maxcorps was majority shareholder with Husnain Construction as the minority shareholder. The head of Maxcorp, a Malaysian, Mr. Dato Kasa,came to Pakistan and  made a courtesy call on the Minister before investing in Pakistan. The Minister or the Executive Committee had no other interaction with the bidders  throughout the deal. Only the Marketing Department negotiated and put up recommendations to the Executive Committee for approval. It may be pointed out that none of the bidding parties have ever raised any objections to the procedure or the final Result, or challenged it in a court of law.”

The final Implementation Agreement

The final implementation agreement   after scrutiny by the Law Ministry was signed at the end of April 2001. The Railway has been receiving Rs 5 Crore per year increasing by 10% annually. The course was laid and completed by Maxcorps experts within assigned time, who even imported the grass and plants from Malaysia.  Hasnain construction did the earth work but the planning, laying out the course and plantation was all done by Malaysians.

They hold Saad Rafique responsible for negative propaganda

“After we were out of the Ministry in 2003; the  Maxcorps sold their share to Hasnain Construction and went onto other projects in Pakistan. The main ones are a golf course in Karachi, the Mangla resorts and the Jacranda club in DHA Islamabad. They left Pakistan in 2007. There is a dispute on the rate of rent as it differs in one document. All deal documents showed rupees 4 per square yard which comes to 2.61 million/year. Only 1 document showed 2.6.1 million per annum – two dots which the Marketing Department claimed was a typing error NAB in 2014 disregarded the doubtful figure but the Investigating Officer (lO)(NAB) in 2017 has accepted this as the real figure discarding all other calculations and made a charge out of it.

The Minister held his staff conference  on 2nd July 2001, which was attended by all railway hierarchy. Briefing on the final deal was given, it was discussed and 2 instructions were issued. One was to reopen negotiation with Malaysians to include five star hotel if Railway gets a good deal. If not, to leave it out as a subsequent project . The second was endorsement of the decision of Executive committee of 26th June 2001 ordering demolition of all old railways bungalows and quarters mostly 80-100 year old on the canal bank to make additional land available for international standard Golf Course and a 5 star hotel. Instructions were given to ensure accommodation for all railway employees evicted from demolished houses.

The situation has only changed after Saad Rafique became the Minister and has tried all means and pressures to get the lease cancelled and get hold of a well-developed golf course which today is the pride of Lahore.

“The land of golf course and a hotel was made 140 acres from 103 Acres. 140 Acres was the original allotment during British days for the Golf course. We were now to make an international Golf Course and a 5 star hotel on it thus increasing the value of railway land manifold.  All bidders were informed about this decision through a letter during the process. The NAB claims that it should have been readvertised. Railway land was not allowed to be used as collateral to raise funds and the lease was to be considered a profit sharing venture with Railway retaining ownership including of all new properties which may come up.”

The generals further says another allegation by NAB is that Board of Revenue had objected in 2002 that the golf club was Federal land but was subleased by Railway . It was already on a lease of Rs 12 per year but no one had objected.  “Board of Revenue was informed that Railway was also a Federal Department and as per decision of the cabinet ,Railway was authorized to even sell the land. We did not however sell any land. We leased golf club for improvement and fund generation for 49 years. It still belongs to Rly. Board of Revenue never objected after this reply but this current IO (NAB) has made it a charge against the Minister.

“The endorsements of minister’s conference have been misquoted in his report by IO (NAB) who calls them specific directives given by the minister to malign him. No specific directive was ever given and none exists.   Marquees which are not part of the contract were set up on golf course years after our tenure in railways ended  and has nothing to do with us. They were not included in the original contract but why has the Railway never objected to these till now. NAB has accepted all current railways claims of damages and presented them as his own findings.”

It may be pointed out they say that the Railway was supportive of the deal throughout and its Secretaries have recorded statements accordingly in standing committees and even in Supreme Court.  The situation has only changed after Saad Rafique became the Minister and has tried all means and pressures to get the lease cancelled and get hold of a well-developed golf course which today is the pride of Lahore.

“NAB in 2003, 2010 and 2014 had cleared this deal of any corruption and also recommended dropping the case. Only now in 2017, a new negative report has been initiated by the IO Nasir Raza without even calling the Minister or Gen Saeed uz Zafar to enquire or confront  them with the allegations.  These irregularities by the IO NAB were pointed out to the  Chairman NAB in writing but he did not give time for a hearing ,  accepted this report and filed the reference in the Accountability Court. The case has lingered in the Supreme Court since 2009.Former Chief Justice Iftikhar Choudhry had FIA and NAB scrutinize our assets and bank accounts but found nothing wrong. No one has assets beyond their means or untaxed. The reference is also not about any financial corruption but concocted procedural errors in the processing of the deal. It is pertinent to point out that the NAB has already cleared us in 2003, 2010 and 2014. Why all of a sudden this new negative report is initiated out of nowhere with no fresh evidence. Is it a balancing act  by Chairman NAB under the current political scenario or is it political pressure and manipulation by those who are attacking the army on daily basis through their minions planted in all organizations including NAB,” they ask.

The generals say they served the army and the country with honour and dignity to the best of their efforts. “It is painful to go through this indignity 17 years after the event. We will fight this injustice being inflicted on us,” the generals pledge.

A reference in this regard is pending in the accountability court against them and others. Pak Destiny

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