Following objections by the National Institute of Health (NIH) that its land could not be allotted to a private organisation for the construction of a hospital, the federal government has asked the Capital Development Authority (CDA) to identify a suitable alternative site from its own land for Aga Khan University in the federal capital, officials said.

The issue arose after Prime Minister Shehbaz Sharif expressed support for the establishment of an Aga Khan University teaching hospital in Islamabad, and the CDA initially approved a site for the project. The proposal later shifted to around 35 acres within the NIH premises in Chak Shahzad, triggering a dispute over ownership and the future use of the land.

Health ministry officials said the decision was made after NIH Islamabad objected to the CDA's proposed allotment of around 35 acres of land located within the institute's premises in Chak Shahzad for the establishment of a teaching hospital by Aga Khan University (AKU). They said the NIH had informed the Ministry of National Health Services, Regulations and Coordination that the land belonged to the institute and was required for its existing work and future expansion.

The health ministry supported the NIH's position and conveyed to the CDA that land owned by a federal public-health institution could not be arbitrarily allotted to a private organisation without resolving the ownership issue and meeting legal requirements. The matter was subsequently referred to Prime Minister Shehbaz Sharif, who constituted a three-member committee comprising federal ministers to examine the dispute and hear all stakeholders.

After detailed deliberations, the committee decided that the NIH land could not be transferred or allotted to Aga Khan University for the proposed hospital, and the CDA was directed to identify an alternative piece of land under its own ownership. AKU officials said they were awaiting a final decision by federal authorities regarding an alternative site to establish a 200-bed hospital in Islamabad.