DDA buying up Games Village flats for 700 crore (The Hindu-12 May 2009)

Staff Reporter

NEW DELHI: The Delhi Development Authority on Monday announced that it had decided to purchase flats from Emaar MGF, the project developer for the upcoming Commonwealth Games Village here, to ensure timely construction of flats before the commencement of the Games in the Capital next year.

Stating that purchasing flats for the Games was the only viable option left before it, the DDA in a statement said it would buy up 333 flats for about Rs.700 crore at a price of Rs.11,000 per square foot, which is much below the rate being charged now by Emaar MGF from open market buyers.

The money for the purchase of these flats will be released in instalments and has been linked to various stages of completion of the flats.

With recession resulting in non-sale of flats, Emaar MGF had approached the DDA for a loan of Rs.1,000 crore. The issue was examined in detail at various levels. Considering all aspects, especially timely completion of the flats, it was felt that purchase was the best option, said DDA spokesperson Neemo Dhar.

For the purpose of arriving at the cost at which the Authority should purchase the flats, a committee comprising experts from various agencies involved in construction like the Central Public Works Department, the Housing and Urban Development Corporation, the National Buildings Construction Corporation and the DDA was formed. The recommendations of the committee were considered and finally the decision to purchase 333 flats at Rs.11,000 per sq ft was taken, the spokesperson added.

The DDA said that at no point of time had it decided to give a loan to Emaar MGF. However, in the interest of speedy completion of the project, making one ad hoc payment of Rs.100 crore, to be adjusted against the price of the flats till the price is fixed by the expert committee, was considered by it.

“The DDA is committed to completing the project on time and therefore this facility has been extended as a special case after considering all aspects, time constraints and the national importance of the project,” said Ms. Dhar.

Welcoming the DDA’s decision to invest in the Games Village, Emaar MGF spokesperson described it as a very positive development, signifying the national importance of the project. “This move, effectively, is a firm step in ensuring completion of the prestigious Games Village, a crucial component of the 2010 Commonwealth Games. We are committed to timely delivery of the Games Village, meeting all the stipulated quality and technical specifications,” the spokesperson added.