The Commonwealth Games village may yet come up in time. The Delhi Development Authority (DDA) has bailed out Emaar-MGF, the Dubai-based real-estate company constructing the residential complex.
The games village, coming up along NH-24 near the Akshardham temple in east Delhi, is expected to house about 8,500 athletes and delegates in 2010. It is a public-private partnership between the DDA and Emaar-MGF.
As part of the agreement signed on May 6, the DDA will buy 333 flats from Emaar-MGF for Rs 700 crore. This comes to about Rs 11,000 per sq ft.
“The developer was selling the flats at between Rs 12,500 and Rs 13,500 per sq ft, and wanted the same rate,” said a DDA official who did not want to be named. “They finally agreed since they had no other option.”
The DDA has already given Rs 200 crore of the bailout amount to Emaar-MGF. The rest will be given in instalments.
This is the first such bailout offered by the government since the economic slowdown hit the real-estate sector.
In December, Emaar-MGF had told the DDA that it had run into financial trouble due to the slowdown and its failure to sell the flats. It had asked the DDA for monetary assistance to complete the project.
The liquidity crunch has delayed the project. Only 47 per cent of the work has been completed.
The DDA’s share of flats at the complex has now gone up to 722 while Emaar-MGF has been left with 446 flats.
Initially, Emaar-MGF was to develop the games village and sell two-thirds (768) of the total 1,168 apartments at market rates. It had fixed the price of two-bedroom high-end apartments at Rs 2 crore, making the games village one of the most expensive addresses in Delhi.
The DDA earlier had about 389 flats as its share. It can sell its flats only after the event is over.