LAHORE - Despite the fact that the Lahore Development Authority is under severe financial crisis after running into budgetary deficit of Rs2.5 billion, authority will pay more than Rs1000 million to Frontier Works Organization (FWO) for carrying out all projects regarding rehabilitation and construction of road which lead to the LDA's financial collapse. According to sources, authority has inked an agreement with the FWO despite its financial inefficiencies, which has not only affected its institutional capacity but also weakened its financial position to undertake development projects. Sources informed that after signing contract with the firm, authority would have to pay in advance 30 per cent of Rs500 million earmarked under Lahore Rehabilitation Programme in 2008-09. While according to LDA bylaws, authority is legally bound to pay not more than 4 per cent of the total allocated amount for any development work. Insider disclosed that LDA is facing internal criticism due to its agreement with FWO as latter could not perform up to the mark when awarded contract of first mega project of CDGL housing scheme LDA avenue 1. Sources disclosed that previous Punjab government had awarded contracts of all roads to the FWO LDA Avenue-I, meant only for the government servants and set 2006 as completion target. But the development works in the scheme came to grinding halt as FWO with its trained staff and machineries of international standard could not construct roads due to one or another reason. It may be recalled that FWO was paid 49.49 per cent of the total development charges bypassing the rules and regulations. With the huge payment, sources informed, prices of plots had to be increased. "However, allotees are still awaiting plots' possession as the development works in LDA Avenue-I scheme have been facing inordinate delay over the last many years." Sources said. Sources said that an agreement with the FWO has caused setback to the LDA Engineering Wing. Authority is making the Wing defunct as FWO has been empowered to do all development works. Meanwhile, the employees from chief engineer to sub engineer fear to be sent into surplus pool. It may be recalled that LDA has recently conducted restructuring of Engineering Wing to improve it as per new demands. New directorates were set up to execute development works in time. Sources said that LDA contractor association was also building up pressure on the Punjab government to make some amendments in the agreement with FWO. They cautioned that contract would not only deprive all registered contractors of LDA from their livelihood but also inflict financial damages to the authority. LDA contractor association has warned to move the court and register its protest at CM house and Punjab Assembly. It is pertinent to mention that the LDA would spend Rs8 billion on development projects. Under which Rs500 million are being spent for road construction under Lahore Rehabilitation Programme in collaboration with FWO in 2008-09. Authority has allocated Rs320 million for road construction from Pindi Stop Maulana Shaukat Ali Road to Ghazi Chowk College Road and Madar-e-Millat Road to Quaid-e-Azam Town. Meanwhile 45 meter wide road from Southern bypass to Johar Town costing Rs18 million, insides road of Johar Town including P, R and M block costing Rs19 million, road situated in Quaid-e-Azam Town from Butt Chowk College Road to WASA Tanki Number 4 costing Rs21 million will be constructed. Main Boulevard Gulshan Ravi Multan Road to Bund Road, 20 meter wide Main Boulevard Sabzazar to Bund Road, Neelam Block Allama Iqbal Town to Multan Road costing Rs30 million, Canal Bank Road to Taj Pura Scheme Road costing Rs28 million have been allocated.