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« Real Estate can contribute 3-4 Percent towards India’s GDP- CREDAI | Home | Delhi Based Developer Omaxe Looking to Raise Rs 800 crore via QIP »

DDA Turns Down DLF’s Request to Refund Rs 900 Cr

The Delhi Development Authority has turned down a request by DLF to refund Rs 900 crore the real estate major paid when it was awarded the bid for the Dwarka Convention Centre, near IGI Airport, in 2007. DLF was the sole bidder for the project, then estimated to cost Rs 3,000 crore. The convention centre was to be ready before the Commonwealth Games this October. Soon after it was awarded the contract, DLF requested DDA to allow it to attract foreign funding for the project by creating a special purpose vehicle. But the land agency turned down the request after consulting various experts, including the Solicitor General of India. The real estate firm indicated last year that it wanted to pull out of the project.

“We received a request for a refund a few months ago,” a senior DDA official told Newsline. “As far as we are concerned, the question of a refund does not arise — as per our agreement with DLF, they will have to execute the project.” Rajeev Talwar, a spokesperson for DLF, said: “We submitted a request for a refund and we are still waiting for a response. We are not going ahead with the project at present.” With the economic slowdown last year, DLF had drawn up a monetisation plan that included selling a few assets and the refund of the Rs 900-crore it had paid DDA.

While officials at the development authority refused to reveal further details about the refund, sources said DLF might have to face penalty and a legal suit if it fails to execute the project. Sources said the company is not keen to carry on with the project unless DDA allows for the creation of a special purpose vehicle to attract foreign funding. DLF was allotted 20 lakh square feet of land for the convention centre near IGI Airport at a cost of approximately Rs 900 crore. As per plans, the complex, on the lines of Singapore’s Suntec convention centre that is rated as one of the best in the world, was to include 25 conference rooms with a seating capacity of over 2,000. The proposed complex was also to have two exhibition halls, a five-star hotel complex with at least 800 rooms, a three-star hotel, a budget hotel, a banquet hall, a media centre, 36,600 square feet retail space, and a food court.

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