Wealthy and Powerful Buyers of CWG Flats Paying Heavy Interest.

NEW DELHI: The group of wealthy and powerful people consisting of politicians, film stars, lawyers, bureaucrats, businessmen and top executives of multinational companies is fighting to gain custody of apartments in the heart of Delhi for some months now and there is no sign that a outcome is near. “We literally financed this project for the CWG, and now we are stuck, I put in all my hard earned money to buy a house here.”  said Dhiraj Mathur , one of the 280 people who purchased apartments in the Commonwealth Games village complex and an executive director at Pricewaterhouse Coopers.  These high-end apartments which were built to house the athletes of 2010 games, were sold for between INR2 crore and INR6 crore. But buyers were denied occupancy after charge of bribes in the Games surfaced.

“I used my life’s earnings to buy two apartments in the village as I did not have any property in Delhi”, who paid close to INR6 crore, said former cricketer and parliamentarian Navjot Singh Sidhu “. Had I invested this money elsewhere, I could have got a good return by now,” he added. About 280 buyers – including people like YC Deveshwar of ITC , danseuse Shovana Narayan, lawyer Rajiv Luthra, former finance secretary Ashok Jha and Attorney General Goolam E Vahanvati – paid close to INR 1,500 crore for these flats.

Many of the buyers had taken bank loans for the property and have been paying heavy interest for the past 03 years. Now, with the central bank having revised interest rates nine times in the past one year, their costs are mountaining. “I have been paying an average EMI (equated monthly installment) of about Rs 2 lakh for the past three years since I bought the flat. Right now, most of the EMI amount is going towards interest payment,” said an employee of IFC, New Delhi. He had bought a four-bedroom flat for about INR3 crore and had taken a loan of INR 2.25 crore from Citibank. In the last few months, his interest rate has gone up from the original 9.1 percent to 12.5 percent, increasing the interest factor in his EMIs by at least 30 percent. The apartments lie vacant, with no one to look after, with broken doors and windows that let in dogs and birds. They are in a state of disorder since the end of the games in October last year

India’s Biggest Real Estate Firm to Get Crores

The Biggest real estate firm intends to trade in a few IT parks and its hotel business, hoping to wrap up 7,000 crore in the next two years and reduce its growing gross debts.

Its tax dues are on the peek, in the financial year 2011. It has received an additional tax demand of 546.85 crore from the IT-department in the last quarter of 2010-11. Net profit in the consequent quarter of last year was 426.38 crore.

Over the last 1½ years, the real estate major had already sold some non-core assets such as hotel sites in Delhi and Hyderabad as well as non-contiguous land parcels to receive around 3,000 crore. The company said it could sell non-core assets such as IT Parks that generate low return but not the buildings and other developed buildings. The company aspire to become debt-free by the mid term.

DLF’s initial plan was to obtain 4,500 crore from sale of non-core assets, but now plans to procure 10,000 crore in the next 2-3 years. With 3,000 crore already in its stake from sales of non-core assets in the last 18 months, it is now identifying properties to procure the balance 7,000 crore.