Grand Hyatt Islamabad dispute intensifies over lease violations and dues

The Capital Development Authority allocated 13.5 acres of land in 2005 for a five-star hotel in Islamabad, granting the lease to BNP for Rs4.8 billion. After receiving only 15 percent of the payment, the authority handed over the site for construction, however, the company failed to clear remaining dues and repeatedly sought extensions instead of fulfilling its financial commitments.

As the matter escalated, the case reached the Supreme Court of Pakistan, which in 2019 ordered BNP to pay Rs17.5 billion to reinstate the lease. Despite this directive, the company paid only Rs2.9 billion, leaving outstanding dues of nearly Rs14.5 billion, prompting authorities to cancel the lease in 2023 due to continued non-payment.

Moreover, the company departed from the approved plan by constructing 263 residential apartments instead of completing the hotel project. The Capital Development Authority issued public warnings at the site, clearly stating that buyers would be responsible for any consequences, yet buying and selling of these apartments continued despite the legal uncertainty.

Of the 263 apartments, only 69 are currently occupied, while the remaining 194 are largely held by investors engaged in property trading. Among the occupied units, a small percentage houses permanent residents, whereas most are being used for short-term rentals, indicating a shift from intended residential use to commercial activity.

Following directives from the Islamabad High Court, teams from the Capital Development Authority, assisted by Islamabad Police, carried out an operation at the site and issued formal notices. Occupants have been given seven days to vacate the premises, marking a decisive step toward enforcing court orders.

Although authorities had earlier cautioned buyers about the risks, the government has now adopted a lenient stance by offering compensation based on original purchase prices. This approach aims to address the concerns of affected individuals while ensuring legal compliance and restoring regulatory control over the disputed development.