The Delhi Development Authority (DDA) was trying to maintain national prestige when it bailed out Commonwealth Games Village developer Emaar MGF last year. And it didn’t incur any loss in the deal, the authority has claimed.
The Comptroller and Auditor General of India (CAG) had recently tabled a report in the Parliament that said the DDA incurred losses of over Rs 150 crore in its dealings with the Games village developer.
The DDA was assigned the job of constructing the Games village to house 8,000 athletes and Games officials. Emaar MGF was selected as the developer of the project on a public-private partnership (PPP) mode.
Last year the authority had provided a bailout package to the developer, which was hit by the economic slowdown and was receiving bookings for the flats of Rs 766.89 crore by purchasing 333 flats.
The CAG report said the PPP agreement didn't provide for any financial assistance. The report said an evaluation committee set up by the DDA had recommended that it should provide a loan to the developer instead of buying the flats.
“We needed some guaranty to provide a loan but the developer had nothing to mortgage,” said Nand Lal, Member (Finance), DDA.
“We examined all options and decided at highest level to buy the flats. It is a project of national prestige.”
The CAG report mentioned that the DDA made an extra expenditure of Rs 89.24 crore by purchasing the apartments at a higher rate. While the evaluation committee had recommended a price of Rs 9,720 per sq. feet, the DDA bought it for Rs 11,000 per sq. feet.