Wasn't consulted but I approve of EMAAR bailout, says Jaipal

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Old 22-Oct-2010
Saini Sa'aB
Wasn't consulted but I approve of EMAAR bailout, says Jaipal

New Delhi: Jaipal Reddy has told NDTV that while he was not consulted about a Rs. 700-crore bailout package given to real estate developer EMAAR for the Commonwealth Games, he approves of the decision taken by the Delhi Development Authority (DDA). Reddy, who is Minister for Urban Development, also says that the DDA will make a profit of more than 350 crores as a result of the bailout.

The Athletes Village, designed as the epicenter of the Games also became the catchment area for embarrassingly poor construction and facilities, reported on internationally in the days before the Games.

In 2009, EMMAR-MGF said that the global recession meant it did not have the capital required to complete the construction of the Village. The DDA then bought 300 apartments as part of a
Rs. 700-crore bailout. The DDA's own committee of technical experts said the agency had paid nearly Rs. 90 crore more than it should have. The DDA's response: Parking costs and "the developer's margin" justified the extra expenditure.

The EMAAR bailout has become of the red flags in the newly-launched massive investigation into the metabolic corruption and inefficiency among the various agencies and departments that were in charge of readying Delhi for the Games. Among those being investigated: more than 12 departments of the Delhi government, the DDA which reports to Delhi's Lieutenant Governor, and the Organising Committee chaired by Suresh Kalmadi.

"Commonwealth Games were not a fiasco," said Reddy. "On the contrary, it has been hailed internationally and nationally as a spectacular success. DDA did not go in for bailout package. It went in for a buyback scheme," said Reddy. "It had to go in for buyback scheme because with the urgency of holding the Games, if assistance was not given to developer, there would have been no Village. And Village was key to the Games."

Reddy also said, "Though I was not consulted, I would still stand by the buyback scheme. Though it was a desperate arrangement, fortunately, DDA will make a profit of more than 350 crores... a return of 50% in a year."

Despite the often-acknowledged and obvious importance of the Village as the centerpiece of Delhi's venues for the Games, it was a tangle of structural defects, filth and safety lapses till just days ahead of the opening ceremony. NDTV has accessed internal documents which chronicle complaints by different countries between September 24 and September 28. Several delegations ask in frustration how the towers were given safety certificates.
The DDA has passed the buck to EMAAR, accusing it of missing deadlines, not paying power and water suppliers, and defects like terraces that were not water-proofed and basements that were water-logged. Reddy confirmed that the DDA is moving to confiscate a 183-crore deposit given by EMAAR to the government. "It was DDA which suggested that we should invoke the bank guarantee. Ministry merely approved of the idea... but it is the correct line of action on part of DDA," said Reddy.

EMAAR has said it met all its commitments and that it handed over a world-class Village to the DDA. It has also said that contrary to what's being reported, the DDA bought 300 flats at prices that were lower than the market rates, that it has not paid the entire amount due for these flats, and that EMAAR has offered to buy back the same flats

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