Thursday, May 20, 2010

CWG Games flats to go at market rate at Rs. 15000 per Square Feet

DDA to Sell 700 Apartments in CWG Village at Rs 15,000 per Sq Feet

The rates of the once reasonably-priced DDA flats are getting real. The Delhi Development Authority (DDA) is talking of disposing of over 700 flats it owns in the Commonwealth Games Village at market prices. According to DDA estimates, the market rate is around Rs 15,000/sqft.

The move comes on the heels of allegations of DDA losing over Rs 89 crore in its bailout package to the Emaar MGF, the developers of the Commonwealth Games Village. According to the latest Comptroller and Auditor General of India (CAG) report, the DDA’s acceptance of Rs 11,000/sqft as the buying price for the 333 flats it bought from Emaar MGF as a bailout package, was higher than recommended by its own evaluation committee.

Denying the findings of the CAG report, DDA’s finance member, Nand Lal, said, ‘‘The rates paid by DDA was less than the prevailing rates of that time. It is expected that after the Games, the prices will go up further. Therefore, DDA has incurred no loss as the flats purchased will be disposed of at a much higher price than the purchase price.’’ While Lal refused to reveal what the sale mechanism would be whether through auction or otherwise he admitted the flats would be sold at market rates. ‘‘We will substantially gain from the deal (the bailout package),’’ added Lal.

The market rates agreed by DDA for the Village flats in 2009 when DDA gave the bailout package was Rs 11,000/sqft, which DDA estimates say, has gone up to Rs 15,000/sqft in the current realty scenario. It’s expected to go up further by next year, when DDA will dispose of the flats. The move to sell the flats at market prices is a departure from the norm for DDA, which usually sells its flats at prices considerably lower than market rates. The rates for DDA flats which were sold as part of its latest housing scheme in 2008, ranged from Rs 7.20 lakh-Rs 24.80 lakh for the one-bedroom flats, while the costliest was less than a crore for the three-bedroom flats.

Lal meanwhile denied almost all findings of the CAG report, claiming the rates were agreed by not only its evaluation committee but also officials of the ministry of urban development and the LG office. He also claimed that the allegation of DDA not charging the developer any penalty for over-shooting the agreed floor area ratio (FAR) was premature, as it was charged at the time of giving the completion certificate. Said Lal, ‘‘Once the developer applies for the completion certificate, we shall compute the FAR and charge penalty if it is beyond the agreed figure. It is premature to talk about penalty as of now.’’