IHC Directs Government to Dissolve CDA and Empower Islamabad Corporation

On June 28, 2025, the Islamabad High Court (IHC) issued a landmark ruling ordering the dissolution of the Capital Development Authority (CDA) and the transfer of its powers to the Islamabad Metropolitan Corporation (MCI). This decision, articulated by Justice Mohsin Akhtar Kayani, followed the court's review of two writ petitions challenging the legality of a 2015 Statutory Regulatory Order (SRO) imposed by the CDA, which had mandated Direct Access and Right of Way (ROW) charges on petrol pump and CNG stations in the capital.

The CDA, established in 1960, has long been responsible for the development and management of Islamabad, yet Justice Kayani's order emphasized that the authority’s original mandate has been fulfilled. The court found that the CDA's imposition of ROW charges, amounting to over Rs337 million, was unconstitutional as it had not followed established statutory procedures outlined in the ICT Local Government Act of 2015. The ruling stated that taxation powers must be exercised with the authority of parliament, as specified in Article 77 of the Constitution of Pakistan.

In the judgment, Justice Kayani noted, "The imposition of direct taxes, ROW charges, or access charges by the CDA under the CDA Ordinance, 1960 based on municipal functions is unlawful." The court ordered the federal government to take immediate steps to dissolve the CDA formally and to ensure a seamless transition of all relevant powers, assets, and functions to the MCI. This transition aims to establish a more transparent, accountable, and lawful municipal governance framework in the Islamabad Capital Territory.

The IHC's decision comes amid ongoing criticism of the CDA's governance, particularly regarding its recent actions, such as increasing public transport fares and failing to provide designated spaces for licensed vendors. Prime Minister Shehbaz Sharif had previously directed CDA officials to reconsider fare hikes due to public backlash.

The transfer of authority to the MCI is expected to enhance local governance by allowing elected representatives to manage municipal affairs more effectively. This shift aligns with the objectives of the ICT Local Government Act of 2015, which sought to restructure local governance in Pakistan.

Experts believe this ruling marks a significant shift in local governance in Islamabad. Dr. Ayesha Khan, a political science professor at Quaid-i-Azam University, remarked, "This decision underscores the need for accountability and representative governance in urban management, which has been lacking in Islamabad for decades." Moreover, industry leaders have expressed optimism that the MCI will be better equipped to address the city's pressing urban challenges.

As the government prepares for this transition, stakeholders are watching closely to see how the MCI will address the myriad issues facing Islamabad, including urban planning, waste management, and infrastructure development. With the dissolution of the CDA, the government is tasked with ensuring a smooth transition that prioritizes the rights and needs of Islamabad's residents. The implications of this ruling could reshape the governance landscape in Pakistan’s capital, setting a precedent for other cities grappling with similar governance issues.

In summary, the IHC's decision to dissolve the CDA and empower the MCI represents a pivotal moment in Islamabad's governance. It highlights the growing demand for more accountable and responsive local government structures that can better serve the urban population's needs. As the transition unfolds, the government's commitment to transparency and legal governance will be critical in determining the long-term success of this reform.