Games Village flats: DDA gets rap for bailout

Did Delhi Development Authority (DDA) pay a higher price to the developers of the Commonwealth Games Village, Emaar MGF, for the 333 flats that were bought? The Comptroller and Auditor General of India (CAG) has severely indicted the DDA for its 'bailout package' of Rs 766.89 crore to the company and said it was
too lenient, resulting in excess payment to the tune of Rs 89.24 crore.

That's not all. The CAG report has also hauled up the land agency for not recovering Rs 65.23 crore from the developer for building beyond the allowed floor area ratio (FAR). The report in fact, is scathing about DDA's role in granting a bailout package that not only ignored the recommendations of the Evaluation Committee that had been set up but acceded to the demands of the developer on the grounds of national prestige.

According to the CAG report, the land agency not only ignored the advise of the Evaluation Committee to give a loan rather than buy the flats — the CAG report says the recommendations were not made part of the note sent to the DDA VC or the LG — but also gave in to Emaar MGF's demand for a higher price per sq foot for the flats.

While the Evaluation Committee had talked about a price between Rs 7,425 and Rs 9,735 (based on the calculations of the two consultants), with the Committee finally recommending Rs 9,720 per sq ft for the flats that included the developers margin, overheads and project management costs, DDA ultimately went with Rs 11,000 per sq ft, citing the need to factor in the contractor's margin as demanded by the developer.

"Instead of analyzing and providing the justification for increase in rate which was at variance with the rates suggested by the Evaluation Committee, DDA arrived at the rate of Rs 11,000 acceptable to the developer. This resulted in avoidable expenditure of Rs 89.24 crore," says the report.

More interestingly, the report says that DDA is yet to penalize Emaar MGF for building on FAR beyond that allowed in the agreement with DDA, in excess of over 4 lakh sq ft. The amount that DDA would recover from this is Rs 65.23 crore, says the report. Also, DDA is yet to get Rs 20.31 crore from the developer for installation of the grid sub-station as well as labour cess of Rs 4.12 crore. DDA officials meanwhile refused to comment on the CAG report. Officials claimed that they hadn't yet received an official copy of the report, and would comment only after they did so.