Financial Daily from THE HINDU group of publications
Monday, Sep 22, 2003
Industry & Economy
Real Estate & Construction
Real estate firm drags Delhi Metro to court
New Delhi , Sept. 21
A DELHI-BASED real estate developer and export house has dragged Delhi Metro Rail Corporation (DMRC) to the Delhi High Court alleging irregularities in the award of a contract to develop a shopping, commercial and entertainment complex on surplus Metro land.
In a writ petition filed before the Court, Negolice India Private Ltd has claimed that DMRC had wrongfully disqualified the company's bid for developing a commercial plaza with shopping mall and multiplex cinema theatre on a 50,000 square metre plot in Khyber Pass area of north Delhi.
Claiming that its bid, filed in consortium with Gujarat-based Adani Exports Ltd, qualified all technical and financial parameters laid down by DMRC, the company has sought a direction from the Court to Delhi Metro that its financial bid for the project should be considered.
The matter would come up for hearing on Monday.
A Delhi Metro spokesperson said that the DMRC was confident that no irregularity had been committed, but refused to disclose details saying that the matter was sub-judice.
"We are very sure that no irregularity has been committed by us. The issue was examined by a committee of senior DMRC officials in a transparent manner before the contract was awarded. We have all our papers in order and would present them before the honourable Court," the spokesperson said.
As part of its effort to generate alternative revenue streams, DMRC awarded the contract to MGF Developments Ltd, a car dealer and real estate developer, last month. MGF has also been named a respondent in the case.
In an earlier order on August 4, the court had refused to grant interim relief to Negolice, but said that "if in the meantime parties are acting, it will be at their own cost and risk."
The DMRC spokesperson said, "We are aware that the honourable Court had said that if the contract is awarded, it will be at our risk. But we are reasonably sure that we are on a firm footing, which is why the plot has been transferred."
Negolice has also claimed in its petition that MGF had negative net-worth of Rs - 0.14 crore when the bids were submitted and even with consortium partners, its net worth stood at just Rs 7.38 crore and borrowing capacity totalled Rs 4.54 crore, which was not sufficient to execute such a large-scale project. The Adani-Negolice consortium, the petition claimed, had a net worth of Rs 531.03 crore and a borrowing capacity of Rs 226 crore.
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