Slowdown may cost MCD Rs 800 crore

The municipal Corporation of Delhi's Civic Centre on Minto Road, on its to way to becoming the tallest building in the city, was the best office space on offer for government agencies planning to move out of crumbling buildings. Till the downturn happened.

The MCD had earlier decided in-principle to give out half of the building to the Income Tax department on 99 years lease. But it had committed one mistake — it didn't finalise the deal. And the delay may cost the civic body

anywhere between Rs 600 crore to Rs 800 crore.

"The economic slump has affected the deal. If we had finalised it a few months back, it would have been better. We are still trying to reason out with the Income tax department but it seems unlikely that they would agree to the earlier amount," said a senior MCD official requesting anonymity.

Had the deal been sealed earlier, the MCD would have got a cool Rs 2,400 crore for 5.34 lakh square feet of space, sources said. But after the changed circumstances, even Rs 1,600 crore-Rs 1,800 crore seems a good offer.

The civic agency does not want to rent out the place to any private company and hence is still trying to persuade the Income Tax department to agree to the previous deal. "We don't want to any private players in the Civic Centre. Being a government agency, it is easy to deal with another government department," added the official.

Eighteen government agencies had approached the MCD for space in the Civic Centre. Most of them were nationalised banks. The Rajya Sabha Secretariat and the Delhi Police had also shown interest. But the MCD got into a deal with only the Income Tax department.

The 28-storey structure will also house the MCD headquarters.