Government plans five-star hotel at One Constitution Avenue

The federal government announced on Wednesday that Islamabad’s One Constitution Avenue would be converted into a five-star hotel after the cabinet approved a joint investigation team’s report on the controversial development. Interior Minister Mohsin Naqvi said the state had legally regained possession of the building and intended to complete its conversion within months.

Planning Minister Ahsan Iqbal said the investigation found irregularities, manipulation and fraud in the project’s bidding and development. He told a press conference that the inquiry included representatives from the National Accountability Bureau, Federal Investigation Agency, Federal Board of Revenue, Securities and Exchange Commission of Pakistan, Intelligence Bureau and Inter-Services Intelligence.

According to Iqbal, the report concluded that rules had been disregarded to benefit the developer and that the Capital Development Authority had been complicit in the irregularities. He alleged that requirements attached to the bank guarantee were removed and that apartments were sold despite the site having originally been approved for a hotel project. These remain official allegations arising from the investigation and have not been presented as judicial findings.

The government said the inquiry recommended blacklisting the developer from future public projects and initiating proceedings against people allegedly involved. It also proposed restoring the property to its original hotel use, conducting a fresh and transparent auction, obtaining the necessary security clearances and ensuring compliance with fire-safety and other regulatory requirements.

Iqbal said investors found to have been defrauded would have their principal amounts refunded, with adjustments linked to the Karachi Interbank Offered Rate to limit their financial losses. Naqvi separately said making rightful payments to occupants was binding on the government under the report’s recommendations. A multinational company is expected to assess the building’s value because the government does not intend to operate the hotel itself.

The inquiry also recommended institutional changes at the Capital Development Authority, including digitising official records, rotating officers working in planning, enforcement and building control every two years, and introducing independent pre-audits of auctions and contracts. The government said the accountability bureau had been directed to proceed against those responsible for, or found to have facilitated, the alleged wrongdoing.

One Constitution Avenue was originally conceived as a five-star hotel project roughly two decades ago but was subsequently developed into residential apartments and commercial areas. The development authority cancelled the site’s lease after payment defaults, and the Islamabad High Court upheld that decision in April 2026. Residents were later evicted, prompting Prime Minister Shehbaz Sharif to order an investigation into the project.

Naqvi said the government would seek an agreement with a major international hotel chain, citing a shortage of high-end accommodation in Islamabad. He also announced that the residents’ committee previously overseeing the building had been dissolved and that a development authority member would now supervise its administration while the conversion process moves forward.