Government to turn Islamabad’s One Constitution Avenue into a five-star hotel after JIT finds fraud
The federal cabinet has approved a joint investigation team report that found fraud and rigging in Islamabad’s One Constitution Avenue project, and the government says the tower will be converted into a five-star hotel within months.
The federal government has announced that Islamabad’s controversial One Constitution Avenue tower will be converted into a five-star hotel, after the federal cabinet approved a joint investigation team report that found the project was built on fraud, irregularities and rigging.
Planning Minister Ahsan Iqbal told a press conference in Islamabad on Wednesday that the investigation team had presented its report to the cabinet, which considered and approved its findings. He said the project, originally approved as a five-star hotel around two decades ago, was instead turned into residential apartments and commercial space in violation of its approved purpose.
According to the minister, the joint investigation team — drawn from the National Accountability Bureau, the Federal Investigation Agency, the Federal Board of Revenue, the Securities and Exchange Commission of Pakistan, the Intelligence Bureau and Inter-Services Intelligence — found that the bidding process had been manipulated, rules had been relaxed without proper approval, and apartments had been sold through 99-year sub-leases despite the hotel approval.
Iqbal said the report identified businessman Abdul Hafeez Sheikh as the alleged mastermind behind the irregularities, acting in connivance with officials of the Capital Development Authority. It also named several former CDA officials, including former chairman Kamran Lashari, as having acted in collusion.
The report recommended that Sheikh and his company be blacklisted from future public projects, that legal proceedings be launched against those responsible, and that the matter be referred to the National Accountability Bureau for further investigation. It also recommended that the project be started afresh and auctioned in a transparent manner so that it could return to its original purpose.
Interior Minister Mohsin Naqvi, addressing a separate press conference, said the government had now legally regained possession of the skyscraper and would move quickly to convert it. “We will make every effort to convert this building into a five-star hotel within the next few months, which was its original purpose,” he said, adding that the government would try to sign an agreement with a major international hotel chain.
Naqvi also assured that people entitled to compensation would be paid their dues. The investigation report recommended that the CDA compensate genuine buyers through refunds of their principal amounts, together with interest linked to KIBOR or an inflation adjustment.
The building’s troubled history stretches back years. Its lease was cancelled by the CDA after the company behind the project defaulted on payments, a decision upheld by the Islamabad High Court in April. Residents were evicted in May, after which Prime Minister Shehbaz Sharif formed the joint investigation team to probe the affair.
Iqbal said the team had also found shortcomings in the process dating back to the mid-2000s, including a first auction cancelled without the CDA Board’s approval and a later auction held under revised terms, with restrictions on building height, covered area and parking relaxed without board approval.
The minister added that the project should be renamed, arguing that the name One Constitution Avenue itself had been obtained through fraudulent means, since it matched the address of the finance ministry.
What happens next will be watched closely by former residents, investors and the city’s hospitality sector. The government has pointed to a severe shortage of hotel rooms in the capital as one reason for restoring the tower to its original use, while the accountability process against those named in the report is only just beginning.
For now, the cabinet’s approval closes one chapter of a long-running saga and opens another: turning a symbol of alleged land and planning fraud in the heart of the capital into a working hotel, and deciding how the people who bought into the project are made whole.
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