CBI to probe DDA’s Emaar-MGF bailout
The Central Bureau of Investigation (CBI) has started a preliminary inquiry into the alleged irregularities in the development of the Commonwealth Games (CWG) Village. The project was executed by the Delhi Development Authority (DDA) and a private construction firm Emaar MGF.delhi Updated: Feb 23, 2012 00:38 IST
The Central Bureau of Investigation (CBI) has started a preliminary inquiry into the alleged irregularities in the development of the Commonwealth Games (CWG) Village. The project was executed by the Delhi Development Authority (DDA) and a private construction firm Emaar MGF.
Though the DDA was chosen to develop of the village, the agency allegedly took two years to decide upon entering into a Public Private Partnership (PPP) contract with Emaar MGF. The two of them had signed a Project Development Agreement only in September 2007, said a CBI source.
The agency suspects that key principles of the PPP model were ignored and a loss of several hundred crore was caused to the public exchequer.
A preliminary inquiry is a precursor to a regular case. Emaar MGF had executed the project with the help of a sub-contractor.
A CBI source said that Emaar MGF had sought financial assistance from the DDA and government. The DDA had bailed it out due to 'time constraints'.
"As part of the bailout package, the DDA decided to purchase 333 flats — at a rate of R11,000 per square feet — from the developer. The accepted rate was higher than the R9, 720 suggested by DDA experts and the valuation committee or the then market rate," the source added.
According to the source, though the firm had asked for R321 crore as loan or purchase of 250 apartments, DDA decided to purchase 333 apartments.
The deliberations of a high-level meeting held on April 4, 2009, in which a decision was taken to "accept the rate of R11,000 per square feet offered by the private developer" is under CBI scanner.
Such a decision could have been taken only by the DDA that was the competent authority for this project, said the source.
The CBI source also said that DDA's decision to buy 333 apartments allegedly helped the private developer in offloading its share of unsold apartments at an inflated price. The funds of the bailout package were allegedly diverted by the private developer for non-CWG project expenses.
When contacted by HT, the Emaar MGF spokesperson said, "We have no knowledge about the CBI registering a preliminary enquiry."