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CDA planning loans for ongoing projects - LahoreEstate - 10-18-2009 05:26 AM
* Delay in projects likely to cause civic body massive losses
* Official says top officials have banned launch of self-funded projects
* Joint ventures to improve financial position
By Fazal Sher
ISLAMABAD: Capital Development Authority (CDA) is planning to take loans from different banks by mortgaging land and launch joint ventures to improve its financial position to complete on different ongoing projects, sources told Daily Times on Saturday.
CDA financial crunch has reached to an alarming proportion and civic body highups are planning to take loans from different banks to meet its financial requirements, he said. The CDA bosses have also banned launching of new self-funded projects and decided to launch joint venture projects in future. Due to its deteriorating financial position, CDA has only released 20 percent of total allocations demanded by different directorates for the first quarter of this financial year, said the official.
He said due to financial problems they could not release funds to different directorates for various projects according to the cash work-plan sent to Financial Wing of the CDA. The slow release of funds has not only badly affected the pace of work on different projects but also its quality, he added.
Loss: The official said if the CDA failed to find ways for generating funds, work on various projects would be halted, which would not only delay these projects but the authority would also suffer hug financial loss. “The authority would suffer hug financial loss, as a number of contractors who have so far not received the required funds and they are planning to claim idle time loss from CDA,” he said.
He said according to the agreement the contractors could claim idle time loss, which might be in millions. He said the second quarter of the current financial year had started, but the financial wing of CDA had not yet released a single penny to their directorate.
It is learnt that CDA is left with just one billion rupees after using most of its reserve funds and the money generated from sale of plots during different auctions and launch of I-14 and I-15 residential sectors.
The CDA had announced Rs 28.851 billion budget for 2009-10, but if its financial health continued to deteriorate in the next few weeks and the civic body failed to generate funds, work on ongoing development schemes in the city would come to a halt, said the sources.
The projects which would suffer the most include construction of Zero Point Interchange, Daulisation of Lethrar Road, upgradation of F-9 Park, construction of Lake Park phase-II, Development of D-12, construction of Cultural Complex at Shakarparian and number of various small projects. The poor financial position of CDA has also compelled its highups to stop release of funds allocated for the maintenances of residential units, water lines and tube wells, he said.
http://www.dailytimes.com.pk/default.asp?page=2009\10\18\story_18-10-2009_pg11_1