ISLAMABAD: The Islamabad High Court (IHC) decision upholding the Capital Development Authority’s (CDA) cancellation of the Grand Hyatt project lease has been criticised by social media users, with some attempting to target the federal government.
However, officials say the facts tell a different story.
The Grand Hyatt project, near Jinnah Convention Centre, is linked to multi-billion-rupee payment defaults.
Officials have described the case as a contractual default issue rather than a political matter.
The land, measuring 13.5 acres near the Jinnah Convention Centre, was leased to BNP Group nearly two decades ago in 2005 by the Capital Development Authority for a five-star hotel project against Rs. 4.882 billion bid.
Possession of the land was granted after an initial payment of 15 percent. Subsequent payment defaults were later reported.
Multiple opportunities, including revised payment schedules, were provided to the developer. Obligations were not fulfilled, officials said.
Legal complications were created after parts of the project were sold or subleased, resulting in third-party claims.
In January 2019, the lease was revived by the Supreme Court of Pakistan, subject to a payment of Rs. 17.5 billion, adjusted against amounts already paid.
Payments totaling Rs. 2.916 billion were made. An outstanding amount of Rs. 14.583 billion remains unpaid, according to officials.
A bank guarantee of Rs. 1.689 billion expired and was not renewed.
Payment and guarantee notices were issued in December 2022. A lease termination notice was served in February 2023.
The lease was cancelled in March 2023 due to continued non-payment, in accordance with legal provisions.
A proposal to adjust dues against commercial space was rejected. Officials said such arrangements cannot be made with private developers.
Acceptance of such proposals was said to risk setting a precedent for other default cases.
The matter was also taken up by the Public Accounts Committee, which directed measures to safeguard public interest.
An administrator and an interim committee have been appointed to manage the building.
Legal petitions filed by the developer and other parties, including the Bank of Punjab, were dismissed by the Islamabad High Court on April 30, 2026.
Authorities said the case underscores the need to protect public land, ensure recovery of dues, and uphold the rule of law.
