No loans, DDA to buy Games Village flats
The Times of India, May 12, 2009, Page 5
New Deal To Translate Into Rs 700-Crore Bailout Package For Recession-Hit Developer
TIMES NEWS NETWORK
New Delhi: After weeks of uncertainty, DDA has finalized a bailout formula for the Commonwealth Games Village project, mired in financial difficulties caused by the recession.
The project had got stuck mid-way as the builders — Emaar MGF — failed to raise the required funds. It will now be given a boost of about Rs 700 crore. This fund, says DDA, will not be a loan but the purchase price of 333 flats that it will buy from Emaar MGF. A part of the fund, which will be given in installments based on various stages of completion of the project, will be handed over immediately.
DDA spokesperson Neemo Dhar maintained that the fund was not to be seen as a loan, but as a price for the flats which DDA will dispose of later along with the flats that were to be handed over to the agency as a part of the original deal. Dhar said: ‘‘Out of the 1100 flats that are to be built, two-thirds were to be handed over to us after completion. Now, the 333 flats will form an additional part of the number which will be coming to DDA.’’
Meanwhile, Emaar MGF is heaving a sigh of relief as the project gets off the ground once again. When tenders were floated for the project, the company had signed the deal at a staggering Rs 435 crore for the land alone. The deal required the project to be built by the company, with the clause that it would sell off its share of flats at market rates to raise funds. However, its attempt to sell the flats ran into a financial wall earlier this year. The flats, which were being offered at a market price of Rs 12,500 per square foot, reportedly found few buyers prompting Emaar MGF to go to DDA for a bailout.
Emaar MGF spokesperson said: ‘‘DDA’s decision to invest in the Games Village is a very positive development and signifies the national importance of the project. This move is a firm step in ensuring the completion of the prestigious Village.’’ He added that the company was ‘‘committed to the timely delivery of the Games Village’’. Incidentally, the land development body is now purchasing the flats at Rs 11,000 per sq ft, a rate that was arrived at by a panel of experts from HUDCO, CPWD, NDCC and DDA.
The Times of India, May 12, 2009, Page 5
New Deal To Translate Into Rs 700-Crore Bailout Package For Recession-Hit Developer
TIMES NEWS NETWORK
New Delhi: After weeks of uncertainty, DDA has finalized a bailout formula for the Commonwealth Games Village project, mired in financial difficulties caused by the recession.
The project had got stuck mid-way as the builders — Emaar MGF — failed to raise the required funds. It will now be given a boost of about Rs 700 crore. This fund, says DDA, will not be a loan but the purchase price of 333 flats that it will buy from Emaar MGF. A part of the fund, which will be given in installments based on various stages of completion of the project, will be handed over immediately.
DDA spokesperson Neemo Dhar maintained that the fund was not to be seen as a loan, but as a price for the flats which DDA will dispose of later along with the flats that were to be handed over to the agency as a part of the original deal. Dhar said: ‘‘Out of the 1100 flats that are to be built, two-thirds were to be handed over to us after completion. Now, the 333 flats will form an additional part of the number which will be coming to DDA.’’
Meanwhile, Emaar MGF is heaving a sigh of relief as the project gets off the ground once again. When tenders were floated for the project, the company had signed the deal at a staggering Rs 435 crore for the land alone. The deal required the project to be built by the company, with the clause that it would sell off its share of flats at market rates to raise funds. However, its attempt to sell the flats ran into a financial wall earlier this year. The flats, which were being offered at a market price of Rs 12,500 per square foot, reportedly found few buyers prompting Emaar MGF to go to DDA for a bailout.
Emaar MGF spokesperson said: ‘‘DDA’s decision to invest in the Games Village is a very positive development and signifies the national importance of the project. This move is a firm step in ensuring the completion of the prestigious Village.’’ He added that the company was ‘‘committed to the timely delivery of the Games Village’’. Incidentally, the land development body is now purchasing the flats at Rs 11,000 per sq ft, a rate that was arrived at by a panel of experts from HUDCO, CPWD, NDCC and DDA.
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