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Games Village: DDA might bail out Emaar

The Delhi Development Authority may rescue the troubled Commonwealth Games Village project as the Centre is now firming up a proposal to allow the Authority to buy out flats that were to be sold by the site’s developers — Dubai-based real estate firm Emaar-MGF.

Written by Smita Aggarwal | New Delhi |
January 8, 2009 1:36:40 am

The Delhi Development Authority (DDA) may rescue the troubled Commonwealth Games Village project as the Centre is now firming up a proposal to allow the Authority to buy out flats that were to be sold by the site’s developers — Dubai-based real estate firm Emaar-MGF.

Emaar-MGF,in a private-public partnership with the DDA,had bagged the project at a bid of Rs 321 crore to build 1,168 apartments here as accommodation for athletes. The contract allows the company to develop the Village and also sell two-thirds — around 768 — of the 1,168 apartments. Emaar was to use the money from the flats’ sale to raise the required funds for the project.

However,the company has recently asked the government if the DDA could advance it a loan to complete the project on time.

Urban Development Secretary M Ramachandran said: “The contractor Emaar-MGF has expressed its inability to raise funds citing financial crunch. One of the options could be DDA buying the flats here. The main objective is to keep the project going.” This proposal had recently come up at a meeting chaired by Lieutenant Governor Tejendra Khanna.

Ramachandran said: “DDA could buy a certain number of flats that were to be originally sold by the developer.” The agreement had stipulated the developer could sell the flats at market rates soon after the Games were over,while the DDA would sell its smaller share of 389 flats after the developer,and that too at a pre-determined price.

A review meeting of the Commonwealth Games Village was held on Wednesday. “There has been a 31 per cent progress in the project so far,” Ramachandran said. He ruled out the possibility of extending a loan to the contractor. Ramachandran added such a provision didn’t exist in the partnership model.

The prestigious Commonwealth Games Village is coming up along NH-24,where 8,500 athletes and delegates will be put up. Emaar-MGF had hoped to raise the required funds for the project by selling the flats,some of which are priced over Rs 2 crore. Given the economic downturn and sluggish demand,the flats are not finding many buyers,even though the developer had opened booking in June 2008.

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