The Indian joint venture of Dubai's Emaar Properties will be penalised for delay and defects in construction of the Commonwealth Games village, a spokeswoman for the Delhi Development Authority (DDA) said.
The $230 million athletes village, built over 63.5 hectares, had come under criticism because of its shoddy construction and was delayed by several months.
DDA, which had contracted Emaar MGF to build the village, is yet to calculate the penalty, the spokeswoman said. The amount would be deducted from about 2 billion rupees ($45 million) bank guarantee given by the developer, she said.
"There was a penalty clause for not adhering to timeline and we have written to (federal urban development) ministry that we are going to penalise them for that," she said.
"(The) ministry has got back to us ... and they have said that this is the right direction in which DDA is proceeding for a number of defects and a number of delays that has happened."
Emaar MGF said in a statement that "all the project milestones were achieved as per our scope of work" and that it had rectified all deficiencies pointed out by DDA or any other agency.
However, the DDA spokeswoman said the developer did not rectify defects despite being brought to its notice by the agency. "Those were done by DDA subsequently. So we have to charge them for that also," she said.
Emaar MGF has filed for an initial public offering, which sources say plans to raise up to 16 billion rupees, less than half the size announced earlier.