Terms set for bailout of Emaar’s Commonwealth Games Village

May 3rd, 2009 - 2:39 pm ICT by IANS  

By Anuradha Shukla
New Delhi, May 3 (IANS) Cash-strapped Emaar MGF may be asked to cut by at least a third the price of its flats proposed as collateral for a $100-million loan it has sought from the government to complete the Commonwealth Games Village project, officials said.

A recommendation to this effect, including the proposed interest rate for the loan at 12.25 percent per annum, has been given to Delhi’s Lt. Governor Tejendra Khanna by a four-member committee appointed by the Delhi Development Authority (DDA).

Estimated at an initial cost of $250 million, the village is coming up on the outskirts of the national capital over an area of 158.4 acres, comprising 14 blocks, 34 towers and 1,168 air-conditioned flats to accommodate 8,000 athletes and team officials.

Emaar MGF will have to give a third of these flats to the DDA. Emaar has already sold some of the flats for Rs.13,218 per square foot even as the possession will be given after the end of Commonwealth Games.

When the company faced a cash crunch and wanted a loan, it proposed to place with the DDA another one-third of the flats as collateral security. The realty major proposed the cost of these flats at Rs.9,720 per square foot.

A four-member committee has proposed that these flats should be evaluated at Rs.9,382 per square foot, officials explained.

The village will have a number of apartment types that will range from two-five bedroom units, each with ensuite facilities that will house a maximum of two occupants per room - the highest ratio of facilities provided for any games, the officials added.

“The committee has given the recommendations. But the final approval will come from the Lt. governor,” said Neemo Dhar, director for public relations, when asked to comment on the development.

“There are many finer points. But they will be decided along with the final approval,” Dhar told IANS, when asked to comment on the specific details of the recommendations given by the committee.

The committee comprises Pawan Kumar, DDA’s financial advisor, R.K. Safaya, executive director of Housing Urban Development Corp, Shailendra Sharma, superintendent engineer with the Central Public Works Department, and H.K. Dhawan, general manager with the state-run National Building Construction Corp.

The recommendations, according to sources, also calls for Emaar MGF to give back the loan within a stipulated time, failing which the flats will be taken into possession by the DDA.

Curiously, the committee has also pointed out in its report that it may be risky to buy apartments in this project. “Emaar might use the payment to repay existing debt and not for the onsite development works,” said a source, quoting from the report.

The work on the project started in August 2007 and, after some setback, a deadline was set for March 2010. The 12-day Commonwealth Games begin Oct 3 next year.

(Anuradha Shukla can be contacted at anuradha.s@ians.in)

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