CAG, CVC keen on buying Commonwealth Games flats

Even as the Commonwealth Games (CWG) 2010, held in New Delhi, was under the scanner of both the Comptroller and Auditor General of India (CAG) and the Central Vigilance Commission (CVC) for alleged corruption and irregularities, both the bodies are learnt to be keen on buying the real estate linked to the Games.

CAG and CVC are among the public sector organisations that have shown interest in buying apartments constructed for the CWG. The Delhi Development Authority (DDA) will soon put up some of these high-end houses on sale for public sector undertakings (PSUs).

Besides CAG and CVC, power producer NTPC and several state-owned banks are in the fray to purchase these flats.

DDA will use the allotment method for selling over 600 apartments in the Games Village, a senior official told Business Standard, requesting anonymity. These are the flats that are yet to be sold out of a total 1,168 flats built before the CWG. The timing for the allotment has not been fixed yet. The market value of these apartments is estimated to be around Rs 2,500 crore. In an auction last year, DDA had sold off 87 apartments at around Rs 400 crore. The highest bid was around Rs 24,137 per sq ft, which will be the benchmark price for selling the remaining apartments in its kitty now. The auctioned apartments were mainly bought by PSUs, including State Bank of India, which got around 20 apartments, the official added.

The CWG village flats (with two to five bedrooms each) in East Delhi, located next to the famous Akshardham Temple, houses 34 residential towers and 1,168 apartments.

Out of the total 1,168 apartments, DDA has a share of over 700, while the rest were with Emaar MGF, which sold off about 445 flats even before the Games. Emaar MGF had sold the apartments at Rs 14,000 to Rs 15,000 per sq ft, but the delivery of the flats had got stuck over several disputes.

Earlier, the project had got delayed due to financial problems, and then, DDA stepped in to complete the construction before the Games. In the process, DDA bought 333 apartments from Emaar MGF's share at a price of around Rs 11,000 per sq ft. According to the project development agreement signed on September 24, 2007, DDA and Emaar MGF were to share the residential apartments in the ratio of 1:2, which was changed to 1:0.63, with the decision to bail out the project developer (Emaar MGF).

Even after the Games, the project faced trouble when it was alleged that Emaar MGF had deviated from the sanctioned plan and had constructed 17 flats illegally, which were demolished due to faulty construction.