LAHORE: Litigation on two mega projects launched by the Lahore Development Authority (LDA) has not only delayed timely completion of development/construction works but also caused a huge financial loss to the exchequer.

Dawn learnt that the mega housing project - Avenue-1 - and the recently launched signal-free corridor project from Gulberg (Liberty roundabout) to Shadman have proved highly problematic for the LDA both in terms of delayed development work and increased financial cost.

AVENUE-1: The Avenue-1 project’s development cost according to original PC-1 was Rs5.786 billion when it was launched in 2004 on Raiwind Road (6kms away from Thokar Niaz Baig). “The contract for development of infrastructure of this scheme was initially awarded to the Frontier Works Organization (FWO) within an agreement amount of Rs2.544 billion under resident supervision of Nespak.

“At the start of this project, only 16 per cent litigation-free area was handed over to FWO for development,” read minutes of a recently held meeting of the LDA’s governing body.

The document says that due to litigation issues and handing over of cleared areas in piece meals to the firm, the development works were delayed. In 2009, after developing 49pc area of the scheme in six years, the company refused to carry out further development works on contract rates. The competent authority curtailed the contract and allowed use of fresh market rates to carry out the balance/additional works of the scheme.


Cost of Avenue-1 scheme, signal-free corridor escalates


“The balance works of the scheme are not being carried out by the pre-qualified civil work contractor and at this stage 75 per cent area of the scheme has been developed. “So keeping in view the situation, a revised PC-1 worth Rs9.587 billion has been framed by combining work done and the remaining tasks. The estimates for the remaining works (after consulting Nespak) have been prepared based on the fresh rates,” reads the document.

The time period and estimated cost is subject to clearance of the areas and handing over to the LDA’s engineering wing. The new estimated cost of Rs9.587 billion includes cost of roads, structures, water supply, sewerage, drainage, electrification, arboriculture, Sui Gas, Land Acquisition/Structure Compensation, Fire Station, Transfer Station, Community Centre and Mosque.

“The governing body after discussing the case approved the revised cost,” the minutes read.

SIGNAL-FREE PROJECT: This mega project worth Rs1.5 billion was started on March 1 and was set to be accomplished on May 30, according to officials. However, the LDA stopped construction work after many people filed petitions in the Lahore High Court, praying to scrap the scheme for being unfeasible on the roads that were already widened.

The petitioners also said the project was not only a waste of money but also an enemy to many trees that were planned to be uprooted. They also said the project was launched without the Environment Impact Assessment. However, after hearing the arguments the court not only issued a stay order to stop the work but also scrapped it later besides clipping powers of the LDA.

According to LDA officials, the Supreme Court in its May 20 short order set aside the LHC’s order and started hearing the case on a regular basis. On June 2, a bench of the apex court would resume hearing of the case. Since the project suffered due to litigation, the contractor/firm is also set to claim escalation cost that would be five per cent (Rs80 million) of the project’s total cost.

LDA Chief Engineer Israr Saeed confirmed to Dawn that there was an increase in the cost of the aforementioned projects. “The development works in Avenue-1 were affected by litigation. The situation forced the FWO to leave the work despite the fact that it had completed 49pc of the job. The company did it because the construction rates it had earlier agreed on increased massively. Thus, it was impossible for the company to complete it in the earlier agreed money,” he said.

He said a revised PC-1 was prepared and approved to develop 2,200-kanal remaining land/area of the Avenue-1 scheme.

While discussing the signal-free corridor project, he said it was set to be completed on May 30. According to agreement, there was no escalation cost if the project delayed for three months. But since this case was now also in court, its completion would take more time that might exceed three months’ period, he added.

“So we will have to pay five per cent of the total cost of the project in case the May 30 deadline passes and more time consumes later in view of the ongoing proceedings of the case,” he said.

Asked about any fault on the part of the LDA in creating litigation issues, Mr Saeed rejected the impression stating that previously the town municipal administrations approved several private schemes in the city without completing legal formalities. Actually various such schemes were also approved within jurisdiction of the Avenue-1. Therefore, when the LDA tried to acquire this land, these schemes’ developers succeeded in getting stay orders from courts. “So this litigation was due to TMAs and not the LDA,” he said.

About the signal-free project, he said the court had asked the LDA to conduct the EPA of the project. “Though we were already scheduled to do this work, we followed the court orders,” he said, adding that everyone had constitutional right to disagree with the government’s projects.

Published in Dawn, May 25th, 2015

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