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CAG slams ‘irregularities’ in Noida land allotments, Real Estate News, Realty Beat

CAG slams 'irregularities' in Noida land allotments, Real Estate News, ET RealEstate
NEW DELHI: A report by the national auditor (CAG) on Thursday revealed massive irregularities in land acquisition, allotment and approvals in Noida due to connivance between builders and officials, resulting in deep distress to homebuyers and massive losses for the authority.

The exchequer lost out on Rs 52,000 crore as officials in the New Okhla Industrial Development Authority (Noida) adopted dubious practices, turning Delhi’s satellite town into a haven for real estate developers with just around 18% used for industrial development.

As anguished homebuyers await possession of flats due to the stressed finances of the builders, the report said 44% (57,000) of the proposed 1.3 lakh group housing flats don’t have occupancy certificates.

Audit found significant lapses in the policies adopted by Noida in the area of planning, acquisition of land, pricing of properties and allotment of properties under various categories. Failures were observed at the level of Noida Board, its management and officials,” the CAG said in its first-ever performance audit of the township during 2005-06 to 2017-18. A similar report for Greater Noida is expected to be tabled in the UP assembly shortly.

The report, which covers the period prior to the Yogi government, is expected to raise the political pitch ahead of the assembly elections early next year.

While the Authority invoked the “urgency clause” to acquire 80% of the land, citing industrial development as the reason, with delay ranging from 11 months to almost four years in submitting the final proposal. When it came to allotment of land, the federal auditor has estimated a revenue loss of at least Rs 14,000 crore.
CAG slams 'irregularities' in Noida land allotmentsThe report showed how authorities in Noida seemed to have diluted and tweaked rules to suit builders, while the interest of homebuyers, many of whom have invested their entire savings, and the Authority were ignored. For instance, the Authority’s finances have taken a toll as dues from builders have spiralled to Rs 18,633 crore against an allotment value of Rs 14,000 crore, with no action taken against defaulters. “The recovery of dues has now become more challenging due to the legal hurdles on account of third party rights being created,” it said amid several builders facing bankruptcy action.

The report pointed to two plots of Logix, where the builder did not meet the eligibility norms. Similarly, there are at least 10 cases – from Unitech to Amrapali, Prateek Buildtech, Supertech and Gaursons, among others – where the Authority allowed the developers to use their net worth up to 2.29 times, causing distress to over 22,000 homebuyers.

Besides, there are charges of bid rigging and of officials allowing related entities to participate in a bid.


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