New Delhi:  An Indian minister defended the Delhi Development Authority's (DDA) so-called "bailout" to developer Emaar MGF in connection with construction of the Commonwealth Games Village.

Urban Development Minister Jaipal Reddy said the DDA bought 333 apartments from Emaar MGF for Rs7.6 billion (Dh626.54 million) so that the developer would have enough cash to complete the Village. He said he was not consulted on the deal but supported it.

While investigating agencies are zeroing in on all aspects of the Village's construction, including possible financial anomalies and construction defects that caused a huge embarrassment to the country before the Games got under way, Reddy's statement has caused ripples in political circles and is being termed as a "shrinking of the probe".

"The DDA never ‘bailed out' Emaar MGF. Buying 333 apartments was part of the buyback arrangement between two partners. And the DDA will make a profit of close to Rs3.5 billion from the Games Village," an Emaar MGF spokesperson told Gulf News.

"The DDA valued 333 apartments at Rs11,000 per square foot, totalling Rs7.67 billion, which is what it paid. The current rate is Rs18,000 per square foot — a neat appreciation," the spokesperson said.

As things stand today, Emaar MGF has its share of 457 apartments while the DDA has 711 apartments. According to the developer, when DDA launches its apartments in the market next year, it will make a killing as the real estate market has improved significantly from the woes of the recession.

The developer constructed the Village complex comprising 1,168 high-end apartments in 34 towers to house 8,000 athletes and officials.

The developer reiterated that it has not received any notice regarding encashment of a Rs1.83 billion bank guarantee it had to provide DDA.

Yet another realty row

Emaar MGF is embroiled in yet another controversy, an alleged scam in developing the Boulder Hills project in association with the Andhra Pradesh Industrial Infrastructure Corporation (APIIC).

Almost all political parties, including a section of the ruling Congress, are putting pressure on the state government to order a CBI inquiry and suspend all activities on the 535-acre golf course project.

It has been alleged that while the original deal gave the APIIC a 49 per cent stake in the leased land, it was later diluted to a meagre 6.5 per cent because of "collusion" between APIIC officials and the developer.