Govt estate revenue declines by 32m afghanis

KABUL (Pajhwok): The government Estate Department’s revenue declined by 32 million afghanis after a rental contract of the Cinema Pamir Building ground floor was cancelled, documents show.

A copy of documents shared with Pajhwok Afghan News show that cancellation of a rental contract for the ground floor of Cinema Pamir Building and offering advertisements of Kabul Airport, Bagrami Hillside and Kabul University Cafeteria at lower rates caused the decline in revenue.

The General Directorate of Government Estate responsibility was shifted from the Ministry of Finance to the Ministry of Urban Development and Land in July 2019, following a presidential decree.

Cinema Pamir Building’s rent:

According to a list shared with Pajhwok, the ground floor of Cinema Pamir Building, which is a government property containing four booths, a photocopy area, cinematic saloon and a restaurant, was given on rent of 148 million afghanis before its rental contract was cancelled, but after its cancellation on March 14, 2019, the floor remains unused since more than one and a half years.

Considering previous rents of the floor, the government lost more than 21.8 afghanis in revenue since cancellation of the rental contract.

The contract is processed based on proposal of the former acting urban development minister and with approval of the president.

The proposal suggests that the current area of the Ministry of Urban Development and Land (MUDL) in Macroryan area of Kabul should be turned into a recreational area through a public and private partnership and the ministry’s offices should be shifted to Cinema Pamir Building.

“All rental and lease contracts of the mentioned building are cancelled and the units of the Ministry of Finance which are stationed in some departments of the building would be directed to shift to another area,” the proposal reads.

The proposal states that the 14-storey Cinema Pamir Building would be repaired before the MUDL shifts there. This comes as MUDL’s decisions caused millions of afghanis loss to the government’s revenue.

However, Hashmatullah Naseri, spokesman of MUDL when asked about the reason behind not repairing the Cinema Pamir Building and not shifting the ministry there, said that outer parts repair of the building was done by Afghan Enterprise System.

 He said the inside repair plan of the building has been designed but it was delayed due to shortage of budget. After amendment of the budget plan, a portion of the budget allocated for repairing of the building was moved to Covid-19 control program, he added.

Kabul University Cafeteria:

Kabul University’s cafeteria monthly rent has been reduced to 513,000 afghanis compared to the previous 853,000 afghanis rent.

Documents show the cafeteria was previously rented for 853,000 afghanis before General Directorate of Government Estates was shifted to MUDL, but another document shows the ministry has given the cafeteria on rent for 340,000 afghanis on June 17.

However, director general of privatization of government estates at MUDL, Wahid Rahman Rahmani, said that the contract of the cafeteria was cancelled based on the request of former contractor who could not pay the amount. He said the cafeteria was then given on rent of 340,000 afghanis.

Former contractor of the cafeteria, Din Mohammad said that he was asked to extend the contract just a month before winter recess of students and when people were quarantined due to Covid19 and that was the reason he cancelled the contract.

He said he was not invited to the bidding process of the contract and he was now ready to take the cafeteria again on 853,000 afghanis rent.

Mohammad also showed a letter to Pajhwok in which acting minister of MUDL has called for cancellation of the current contract of the cafeteria and its award to the previous contractor (Din Mohammad).

The letter states that the current contractor caused revenue loss to the government and it should be awarded again to the former contractor.

However, Wahid Rahman Rahmani, head of the privatization of government properties, said that former contractor in a way deluded MUDL and they had provided a detailed letter on the regard to the concerned officials. He said that decision on the contract would be made after a new order was received from the ministry.

Rahmani said two other stores which previously were given on rent for 6,987 afghanis now fetched 98,500 afghanis each in rent.

Bagrami Hillside contract:

Some documents obtained by Pajhwok show there are two state-run fuel stations in Bagrami area of eighth police district of Kabul city. One of the stations is given on rent for 195,000 afghanis and another for more than 19,000 afghanis.

The information shows that one of these fuel stations was given on rent for 195,600 afghanis in 2018 to a person named Khan Mohammad while the second one was given for 19,340 afghanis to another person named Bashir Ahmad, which shows more than 176,000 afghanis difference while both the stations are in the same area.

However, Rahmani said the contract of the first fuel station was given at a higher price during a bidding process in 2018 while the contract of the second station which was previously given on 23,500 afghanis rent was decided by the Technical Commission of General Directorate of Government Estates in October 2019 and dropped the rent to 19,340 afghanis.

About the reason of lower rent for the second station, he said that the area of the second fuel station was previously 2,000 square meters but now it had reduced to 1,570 square meters as a part of it was used in road passing the area.

Advertisements in Kabul Airport:

An official, who wished to go unnamed, said advertisement areas in Kabul Airport were previously contracted to Effel Company through Afghanistan National Aviation Authority (ANAA).

The source said each square meter of the advertisement area was given on rent for 4,500 afghanis, but the amount dropped to 1,500 afghanis through another contract of Privatization Department of MUDL in June for a period of five years.

The total advertisement area in the airport is 479 square meters and the government suffered a loss of more than 5.7 million afghanis due to lower rent, the official added.

However, Rahmani said the advertisement areas of the airport were announced for bidding six times and for the seventh time its contract was given for 741,000 afghanis to a company for a period of five years.

Bidding documents:

An official in the report, who wished not to be named, shared a list with Pajhwok and said the Ministry of Finance in 2018 had collected more than 1.94 million afghanis from distribution of bidding documents for bidding in the government estates, but MUDL collected only 15,000 afghanis from the documents in 2019.

However, Wahid Rahman Rahmani, rejected above statements and said that the ministry collected 241,000 afghanis from bidding documents last year.

MoF says their financial system could not determine the revenue from bidding processes individually, but could provide general figures of revenue of estates.

According to the article 62 of the Procurement Law, government offices could sell, give on lease or rent transferrable or non-transferrable materials through auction, public sale or other methods which could generate the highest benefit for the government.

Government estates revenue declined by 32 million afghanis:

Shamroz Khan Masjedi, spokesman of the Ministry of Finance (MoF) said that based on Afghanistan Financial Management Information System (AFMIS), the General Directorate of Estates collected more than 1.64 billion afghanis in revenue when it was operating under MoF in 2018.

About the General Directorate of Estates’ revenue in 2019, he said that the department collected more than 750.19 million afghanis until October 2019, but it had no information about the revenue of the department after July this year.

He said the revenue collected by the department was deposited to an account of MUDL after the department was shifted to MUDL and he could not provide information on that.

MUDL has shared its report about annual revenue of estates from 2019 with the Presidential Palace. The report shows the revenue collected from government estates in 2019 amounted to 1.32 billion afghanis, 32 million afs less compared to the previous year.

This report has been produced by Pajhwok and financially supported by UNDP and Denmark.

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