The Lai Nullah has a catchment area of 234.8 km2, which is administratively divided into Islamabad in the upper reaches and Rawalpindi in the lower reaches. During the monsoon season, floods frequently overtop Lai Nullah and inflict severe damage on the lower reaches of Rawalpindi in particular. The flood in July 2001 caused the worst damage including deaths of 74 people and destruction of about 3,000 houses.

To mitigate the disadvantages brought about by flooding and to improve the environment, a master plan was formulated. In the plan, proposed as the structural measures were the construction of a community pond and a flood diversion channel, expecting immediate effects of flood protection. In addition, non-structural measures were planned, including a flood forecasting and warning system and a flood risk map using IKONOS satellite images.