DDA lost Rs 150 cr on C'wealth Games Village project: CAG

Apex auditor CAG today said the Delhi Development Authority incurred losses of over Rs 150 crore in its dealings with Emaar MGF Construction, the developer of residences at the Commonwealth Games Village.

The CAG, in a report tabled in Parliament, said DDA gave a bailout package to the fund-starved developer on the plea that the project was of national prestige, even though the PPP agreement did not provide for any financial assistance.

"DDA provided a 'bailout package' of Rs 766.89 crore to the developer... by purchasing 333 number of apartments... ignoring the recommendation of the evaluation committee constituted by DDA, resulting in avoidable expenditure of Rs 89.24 crore," the Comptroller and Auditor General of India said.

As per the agreement, the financing risk was with the developer, who was responsible for arranging funds, the CAG noted.

Furthermore, the DDA also allowed the developer to construct on an excess floor area of 4,40,301 square feet without recovering the proportionate fee of Rs 65.23 crore, the auditor said.

"Scrutiny of records revealed that the developer had actually constructed 26,06,878 sq ft floor area (instead of 21,66,577 sq ft)," CAG said, adding that an upfront amount of Rs 65.23 crore should have been recovered for the additional floor area.

For Emaar MGF, Is Second Time the Charm?

Real estate firm Emaar MGF Land Ltd. will once again try its luck in raising capital, but don’t hold your breath for a roaring success.

The cash-strapped company, a joint venture between an Indian developer and a Dubai firm, has been trying to raise funds for more than two years now. Even if it does actually hit the market this time, which it says it hopes to do within the next three months, it could end up raising less than its original target of 38.5 billion rupees ($869 million).

The company made its first attempt at an initial public offering in 2008. To say it didn’t go well would be an understatement. It had to refund investors’ money because of poor subscription amid the collapse of the global economy. To get extra cash last year, the company had to sell an additional 333 apartments of the 1,168-flats in its 2010 Commonwealth Games Village project to its public partner, the Delhi Development Authority land agency.

Now, a sustained rally in Indian stocks has given the company another chance.

But investors have become skeptical, having incurred heavy losses in real estate stocks. They are interested in companies’ short to medium-term growth rather than hypothetical future cash flows, says Citigroup India’s capital markets head Ravi Kapoor.

A big brand doesn’t matter as much as a company’s ability to repay its debt, and Emaar is struggling on that front. It plans to use a part of the IPO proceeds to repay its 50 billion rupees of debt outstanding as of March 31. With numerous companies from various industries in the fray to issue IPOs, investors will not exactly be jumping at the opportunity to buy a debt-ridden company. To attract investors, Emaar will have to consider pricing its shares more reasonably than it might like.

Company executives seemed confident on television recently that Emaar would be successful in its fund-raising attempts. A company spokeswoman on Friday told India Real Time that Emaar’s recent residential housing projects had been received well by consumers.

Let’s see how things turn out this time around.

With 6 months to go, Games village gets dedicated power sub-station

The Commonwealth Games Village got a dedicated power sub-station on Sunday, exactly six months away from the showpiece event, to make the uber-luxurious residential complex free of power cuts.

Built at a cost of Rs 40-crore, in a record 13 months, the substation will supply around 50 megawatts to the Village and to about two lakh residents in nearby areas.

“This grid has been designed keeping any eventuality in mind and to ensure that not a single power cut affects the Village,” Chief Minister Sheila Dikshit said after inaugurating the substation. “It draws power from Delhi’s power stations as well as the Northern grid. There is no chance for failure as it operates on a dual system.”

With the power supply in place, the Games Village is now closer to being ready for use.

To be doubly sure that the power supply to the Village stays uninterrupted, the grid has two heavy-duty transformers — one primary and the other as a back up — to take care of any contingency. “We have also made sure that the substation complex is environment-friendly, in keeping with the theme of the Games,” said Ramesh Narayanan, chief executive officer, BSES Yamuna, which supplies power to East Delhi, including the Village. Recently, Congress Members of the Delhi Legislative Assembly had demanded that they all be given flats in the Village at highly discounted rates.

Finance Minister A.K. Walia said the new grid would be beneficial to East Delhi areas.

“Post Games, this grid will boost power supply to Shakarpur, Laxmi Nagar, Mayur Vihar and adjoining areas,” he said.

Adjacent to the Akshardham temple, the substation complex has been made of fly ash and 30 per cent of the area has a green cover.

“We also have a water harvesting system in there,” Narayanan said.

The water harvesting system has been designed with expertise from TERI and has a capacity to harvest 14,000 litres of rainwater.

Games village gets North India's first green grid

The Commonwealth Games village today got a dedicated power sub-station, the first green grid in North India, to meet the electricity demands of the village and of the 2,00,000 people living in nearby areas.

The Rs 40-crore 66/11 KV Commonwealth Grid sub-station was inaugurated by Chief Minister Sheila Dikshit, who said the facility would distribute around 50 Mw electricity to the village as well as the adjoining localities. “Not only the Games Village, the adjoining areas will also get the benefit of this grid. It draws power from Delhi as well as the national grid. There is no chance of power failure as it operates on a dual system. If it cannot draw power from Delhi, it will get power from the national grid,” said Dikshit.

She said the grid reflected the “green” spirit of the Games as environment-friendly fly ash bricks were used to construct it. It had facilities for water harvesting and 30 per cent of its area had green cover, Dikshit said.

Responding to a suggestion of East Delhi MP Sandeep Dikshit, the chief minister said there was a need to tap solar energy also as conventional sources could not be there for ever.

She said by next year, the state would have enough power to meet all its needs and the government would do every bit to provide electricity to the people. But, consumers should also do their bit to conserve energy, she said.

She also took on those opposed to holding of the Games here, saying there would be some expenses but flyovers, new buses, the Metro system and other development works will stay.

Cong MLAs demand luxury flats in Commonwealth Games Village

They may already have plenty of perquisites but that doesn't stop Delhi's legislators belonging to the ruling Congress party from hankering for more. They have their eyes firmly set on the luxurious apartments being readied at the Commonwealth Games Village near Akshardham temple, and are demanding that they be allotted flats on a priority basis - that too at a special price.

Not surprisingly, the demand raised by Matia Mahal MLA Shoaib Iqbal on the floor of the House was enthusiastically supported by all Congress MLAs. While public opinion may not be quite as supportive, chief minister Sheila Dikshit chose to pass the buck. "If you all want this then either bring a resolution or put out your demand and I will forward it to the concerned authorities. I have no role in the matter but your sentiments can be made known to those concerned with the allotments," she said.

The views of the main opposition party, the BJP, could not be immediately ascertained since its MLAs had been directed to stay away from the proceedings for three days after they created a ruckus in the House over cow slaughter on Wednesday.

On Thursday, Iqbal pointed out that luxurious flats were being created in the Games Village which will be left vacant once the players leave. "If private companies can buy these flats, then why can't the government buy these flats and give them to us. We don't have houses and the government must do something about it," he said.

Four-time Congress MLA Mukesh Sharma enthusiastically championed the `housing' cause for his fellow MLAs. "DDA had stepped in to bail out Emaar-MGF when it was caught in a crisis so that the project could be completed. I propose that DDA should allot flats to us MLAs from among those apartments (700) that are in its possession. We should be sold these flats at a special price and probably a loan plan should be worked out to facilitate the sale to the MLAs so that they can have a house," Sharma said.

MLA Subhash Chopra, who is a non-officio political member of the DDA, immediately jumped to his feet and said the proposal could be put before the concerned authorities.

At this chief minister Sheila Dikshit rose to say, "The demand for housing for MLAs has been there for long now. I have earlier also said that the MLAs should form a society to take this forward. As far as the Games Village goes, if the MLAs make a formal proposal it can be referred to the authorities concerned. The decision lies with those in charge of these flats and not with us."

As the discussion came to a close, finance minister A K Walia intervened in a lighter vein. "I was not worried at the beginning of the discussion. Par ab mujhe phikar ho rahi hai. Kyonki Games Village meri constituency mein aati hai aur agar aap sab 70 maharathi wahan rahenge to kya hoga (I'm worried because the Games Village comes within my constituency and if 70 of you live there, what will become of me)," he quipped.

All wired up for the Games

A policeman sitting at the police headquarters near ITO in central Delhi will be able to see the person entering the Commonwealth Games Village in east Delhi, five kilometres away.

That’s not all.

The cop will also be able to see every vehicle entering the city, a shopper at Karol Bagh market, a motorist on Parliament Street and all of them at one go.

If there is a threat anywhere in Delhi, the information will be fed into the system.

They will be colour coded in red, yellow and green based on the severity of the threat and will flash on screens.

Delhi Police are all set to install giant screens at a new center for command, control, coordination and communication called C4i.

The centre would be linked with cameras installed at 58 markets, 27 border check posts, 1,000 police control room (PCR) vans, 12 police video monitoring vehicles, 700 traffic vehicles and two city hotels.

“The live feed from the cameras would be displayed at the C4i centre. Any untoward movement or emergency would be spotted by the policeman sitting at the centre and relayed to the local police for necessary action,” said a police officer.

“If there is a stampede at a market, the cop would make announcements on the public address system from the centre and control the situation. This is before additional force can be rushed in,” he said.

The centre will be equipped with three 32 inch LCD screens and two 46 inch LCD screens. In all, there would be 88 screens at the centre covering the city.

“The centre would be operational before the Games,” said Rajan Bhagat, spokesman, Delhi Police.

Samrat Hotel and Hotel Ashok in Chanakyapuri, which are the official games hotel will also be linked to this centre.

“The movement of all the players and dignitaries will be monitored through this centre,” said the officer.

DDA to buy 333 flats in Commonwealth Games Village for Rs700 cr

The Delhi Development Authority, or DDA, will purchase 333 flats for around Rs700 crore in the Commonwealth Games Village in an effort to bail out cash-strapped real estate developer Emaar MGF Land Ltd. The firm is developing the village, scheduled for completion by the end of 2010

In a statement on Monday, DDA said it would buy the flats at Rs11,000 per sq. ft, which is below the rate being charged by Emaar from open market buyers. Currently, Emaar has priced the flats at around Rs12,500 per sq. ft. Emaar MGF is developing the project in partnership with DDA.

Of the total 1,168 flats, Emaar MGF was supposed to sell 768 flats at market rates in late 2011 and the rest were to be sold by DDA after the games at lower prices. Emaar MGF was to fund the construction through the sale of flats. Bookings opened in 2008.
The firm has so far sold around 260 flats.

The amount towards the cost of the apartments will be released in instalments and has been linked to various stages of completion of flats, the statement said.

“The DDA’s decision to invest in the Games Village is a very positive development,” an Emaar MGF spokesperson said.

According to the DDA statement, due to non-sale of flats, Emaar MGF had asked DDA for a loan of Rs1,000 crore. However, it added, at no point had DDA agreed to a loan.
Earlier, a committee consisting of officials from the Central Public Works Department, Housing and Urban Development Corp. Ltd, National Buildings Construction Corporation Ltd and DDA was formed to decide on the bailout package to be given to Emaar. Subsequently, DDA has decided to buy flats rather than give a loan.