Jaipal defends DDA’s bailout package for Emaar MGF

Thursday, October 21, 2010

NEW DELHI - Union Urban Development Minister S. Jaipal Reddy Thursday said he backs the Delhi Development Authority’s (DDA) Rs.700-crore bailout package for Commonwealth Games Village developer Emaar MGF even though he was not consulted on the issue.

“Though I was not consulted, I would still stand by the (village flat) buyback scheme. Though it was a desperate arrangement, fortunately, the DDA will make a profit of more than Rs.350 crore… a return of 50 percent in a year,” Reddy told NDTV.

The private builder was given the contract for constructing 1,168 flats in the village at a cost of over Rs.1,000 crore. But last year, the company said it had no money due to recession and it was unable to continue with the construction of the village.

The DDA then came to the rescue of the builder and bought 300 flats for Rs.700 crore. The flats were to be handed over to the housing agency after the Commonwealth Games.

After Reddy asked for a report from the DDA Oct 7 on the issue, the housing agency Tuesday submitted an interim report to the ministry saying that there were “irregularities” and “deficiencies” in the work done by Emaar MGF.

On the recommendation of the ministry, the DDA Wednesday said it may confiscate the Rs.183-crore bank guarantee of Emaar MGF.

Emaar MGF said that the guarantee had been extended till Dec 31 at the behest of the DDA.

Filed under: Commonwealth Games

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