World Real Estate

DDA’s undue favour to Emmar MGF in CWG

Comptroller and Auditor General (CAG) has said that “undue favour” was shown to Emaar MGF in the award of the contract for construction of Commonwealth Games residential complex. DDA allowed “several financial concessions” to Emaar MGF including revision of milestones and delay or non-levy of liquidated damages, it said. The report also noted that there had been Floor Area Ratio violation. The FAR constructed by the project developer substantially exceeded not only the sanctioned plan, but also the maximum permissible FAR under the Master Plan for Delhi 2021, it said.
“There was a series of misrepresentation and accommodations at the RFQ (Request for Quotation) and RFP (Request for Proposal) stage that resulted in Emaar MGF Constructions, which was not qualified in terms of pre-qualification criteria, emerging as an eligible and successful bidder through the consortium route,” CAG said in its audit report on the Commonwealth Games. While bids were received from Emaar MGF and DLF Ltd, the latter’s conditional bid was rejected without any interaction or negotiation. But DDA chose to engage in prolonged correspondence with its financial consultants, legal advisors and Emaar MGF, to find solutions to address deficiencies in its proposal, the report said.
Finally, only Emaar MGF was declared technically qualified, and awarded the contract on the basis of a single financial bid, “thus denying DDA the benefit of financial competition,” it added. CAG has also frowned on the bailout package extended to the developer. It further said that the execution of the residential complex project too was plagued by several irregularities and deficiencies. Noting serious lapses in construction work, CAG also rapped DDA for not taking adequate action despite a third party quality inspection agency continuously flagging deficiencies, with regard to quality of construction.

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