Govt defends bailout package for Emaar-MGF

Unfazed by criticism over Rs 766 crore bailout package to CWG Village developer Emaar-MGF, government today defended the step saying it was a "buyback arrangement" that led to a "win-win" situation for the DDA.

It, however, stepped up attack on Emaar-MGF saying it had delayed the Games Village project by five months and undertook constructions which were beyond the agreement.

The developer was supposed to hand over the Village to the DDA by March end but it was given in August end, Union Urban Development Minister Jaipal Reddy said here implying that this had delayed other works to get the venue ready.

He noted that agreement between the DDA and the Emaar-MGF was signed on September 14, 2007 but subsequently the project got stuck because of economic slowdown and difficulty in raising resources from the market.

In February 2009, the builder made a representation to the government citing these difficulties and accordingly it was decided that the financial assistance could be provided to it by the way of purchase of flats by the DDA, Reddy said explaining the reasons for buyback deal with the developer.

The developer was given Rs 766.89 crore against the buying of 333 flats in the Games Village by the DDA at the rate of Rs 11,000 per sq ft, he said.

"It was not bailout but the buyback arrangement in which DDA made profit of about Rs 350 crore," the minister said adding "It is a win-win situation for the DDA as out of total 1,168 flats, it has got 711 flats at its disposal."

The financial package has come in for criticism as it has been felt that the tax payers money has been used to help the private builder.

On his ministry's order for confiscating Rs 183 crore bank guarantee furnished by Emaar-MGF, Reddy said its implementation will take some time "as there is a procedure involved".

He insisted that there was no delay in action as "earlier DDA focus was on the Games as it was more important. Once the Games were over, action followed".

Asked whether bureaucrats involved with the Games preparation would face punitive action for delays and shortcomings he said "Bureaucrats, if caught napping, there will be punishment with the due process."

Asked how a clean chit was given to the developer earlier, the minister said "no clean chit was given to Emaar-MGF. What we said was that Games Village was best village ever made in the Commonwealth Games history".