The Hindu : Rs. 1,100-crore DDA scam alleged

Online edition of India's National Newspaper
Monday, Apr 14, 2003

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Rs. 1,100-crore DDA scam alleged

By Gaurav Vivek Bhatnagar

NEW DELHI APRIL 13.At a time when the Central Bureau of Investigation is investigating the Rs 1.10-crore bribery scandal in the Delhi Development Authority, voices are being raised against a scam, precisely 100 times bigger and involving a loss of Rs 1,100 crores to the exchequer, wherein select companies have been awarded construction contracts at Rs 7,190 per square metre as against the going rate of Rs 5,400 per square metre.

What has irked insiders has been the manner in which the DDA, without giving equal bidding chance to many construction firms, randomly short-listed 11 "big'' firms for undertaking its construction works.

As per the DDA Builders Association, no construction firm registered in Class I category of the DDA was considered capable of executing the job. This when many of these registered contractors had in the last 30 years constructed thousands of flats.

But later on the selected firms themselves took to unauthorised sub-letting at 5 to 10 per cent lower rates. So, the net effect has been that the works are still being executed by the Class I registered contractors of the DDA and the CPWD as sub-contractors and the pre-qualified firms are getting 10 per cent profit without doing anything.

The job in hand pertained to construction of around 10,000 MIG and LIG houses. As per the Association, all the works of LIG houses were awarded at the plinth area basis at Rs 7,190 per square metre and all works of multi-storeyed MIG/LIG were awarded at item rate basis at 10 to 15 per cent above the Delhi Schedule of Rates (DSR) 1997.

The projects were awarded on turnkey basis. And while the three works were awarded at par and 3 per cent above DSR rates, later on the contractors were awarded simpler jobs at 10 per cent to 15 per cent higher rates than the earlier offer.

Wondering what made the DDA construct more LIG flats when many were lying unsold in Narela, Kondli, Shivaji Enclave, Sarita Vihar and Rohini, the Association has demanded justification of the construction at Rs 7,190 per square metre at a time when the DDA was offering 20 per cent rebate on its unsold flats in Narela.

Since in the new five-storeyed flats there will be no lifts, the question arises whether the DDA will be able to find buyers for the fifth floor. Also, with the cost of construction being more, will it be able to sell LIG flats at Rs 10,000 per square metre. The Association has also raised questions on how the DDA managed to negotiate with the selected contractors and got the construction rate down by 20 per cent from Rs 8,950 per square metre to Rs 7,190 per square metre.

"There is a Rs 1,100- crore fraud in this Mega Housing Project and I have already sought a CBI probe into the case,'' said the Member (DDA) and Member of Legislative Assembly from Nasirpur, Mahabal Mishra. Noting that he had brought the matter to the notice of the investigating agency, Mr Mishra said the issue was also raised at a DDA meeting following which the ousted DDA Vice-Chairman, Subhash Sharma, had ordered a probe by the Chief Vigilance Officer of the civic agency.

``While an internal enquiry is on, this is a case that involves loss of big money to the exchequer and therefore requires a thorough probe by a competent agency into the conduct of various officials and politicians in the award of contracts,'' the DDA Member said.

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Rs. 1,100-crore DDA scam alleged