After rap on Games Village bailout,DDA files its reply

The DDA,CAG further noted,had set up an evaluation committee when Emaar-MGF had approached it for financial assistance.

The panel had recommended the DDA buys flats from the developer at a rate between Rs 7,425 and Rs 9,375 per sq ft. The agency,however,ended up purchasing the flats at Rs 11,000 per sq ft.

In its clarification,the DDA has said the reason the price was raised was that “the project developer had expressed its reservations on the price recommended by the evaluation committee”.

In order to reconsider the rates,the DDA vice-chairperson had then appointed a negotiation committee,which found the evaluation committee “had not provided for any margin to the project developer and the cost of parking lots had not been considered”.

After consulting “financial experts”,the DDA concluded that the general practice in the industry was to allow for a margin of 15 per cent to the developer in order to cover overheads and project management charges.

The DDA has also clarified that it could not grant a loan to Emaar-MGF because “DDA could not secure or get mortgage from the project developer against the loan”. Furthermore,the Delhi Development Act 1957 does not permit granting a loan to any agency,whatsoever.

Therefore “a decision was taken that purchase of flats would be the best option”,to ensure that the project is completed in time for the Games.

The clarification
* DDA says it followed recommendations made by negotiation committee — margin to Emaar-MGF while buying flats and consider cost of parking lots
* Bought flats at Rs 11,000 per sq ft to ensure project completed in time for Games
* Could not grant loan because it could not secure or get mortgage from Emaar-MGF