On Monday, DDA had announced that it would pay Rs 11,000 per square feet to acquire the flats, which the developers are finding difficult to sell amid the slowdown. The DDA’s rate is 13 per cent higher than the price per flat recommended by the agency’s own committee to finalise the prices: Rs. 9,382 to Rs 9,720 per sq feet.

A day on, a DDA official who was closely involved with the negotiations told Newsline: “The issue was discussed at various meetings between representatives from the DDA, the Lieutenant Governor’s Office, the Ministry of Urban Development and Emaar-MGF before we finally arrived at Rs 11,000 per sq ft.”

DDA officials are tightlipped about the 13-per cent jump from the recommended price but the official said the final price takes into account “not just the cost of construction but also the overall development of the project” and its “location”. This, the official said, includes facilities such as “parking lots, development of the greens, 100 per cent power back-up, central air-conditioning, swimming pool and club facilities”.

H K Dhawan, general manager of National Buildings Construction Corporation (NBCC), was on the panel of the four-member committee that recommended the rate to DDA. He said, “When we were asked to fix a rate, our scope of reference was to arrive at a cost based on prevailing market rates. We were also to take into account the cost of construction by Emaar-MGF and the prestigious nature of the project. We did that but these were just recommendations — the final decision was up to the DDA.

“Our mandate got over after we arrived at the basic price.”

Pricing not inflated, say officials
Dhawan said the rate of Rs 11,000 per sq feet is “fair”. He said besides the “rather luxurious” facilities on offer, “one should also take into account the location, which has a charm of its own and is bound to come at a cost”.

Outrageous pricing is said to be one of the reasons Emaar-MGF found it difficult to sell these flats after the real estate market went into a slide. Their market value for these flats remains Rs 12,500 to Rs 14,500 per sq feet. Asked whether DDA can sell the flats at a rate higher than what it is paying, a second price fixation committee member said: “One cannot really compare this project with others. Being built on a grand scale, this will have much better facilities than any other.”

Taking the example of the Asiad Village in South Delhi, the member said, “Then, too, the flats were priced at a rate much higher than others, and the rates have only risen over the years. So this is a sound investment.”

But another committee member asked why Emaar would need a bailout “if they could have sold these flats at a high rate”.