The Commonwealth Games Village row and the fine imposed by Indian authorities will not hit Emaar Properties' cash flow the company says.
Emaar cash flow 'not hit' by Commonwealth Games fine
Emaar Properties has shrugged off concerns about the effect of a penalty imposed by Indian authorities for alleged problems with the construction of the Commonwealth Games Village.
The developer said the fine would not directly dent its cash flow as it had been issued against Emaar-MGF, a joint venture operation between Emaar and India’s MGF Development to build the complex.
“The encashment of the guarantee has no direct impact on Emaar as the guarantee has been issued through the facilities available to the company in India,” it said yesterday on the Dubai Financial Market (DFM) website. Emaar-MGF also said it would take all possible action to protect its interests after an escalation in the row about the completion of the controversial project. The venture has come under fire from the Delhi Development Authority (DDA) since the complex opened last month to accommodate athletes taking part in the Games. The DDA says it will seek to collect at least a portion of the Dh152 million (US$41.38m) Emaar-MGF put down as a deposit before building the 34 apartment towers. It cited construction defects and missed deadlines for pursuing a financial judgement. Emaar-MGF defended the venture’s work on the building, saying it had been finished to the highest standards of quality and design.
It said the complex was handed over to the DDA and the organising committee after a full inventory of facilities, items and assets in June.
“The village was fully put to use during the recently concluded Commonwealth Games,” Emaar-MGF said. “The village received rave reviews from all participants who stayed there.” All deficiencies pointed out by the DDA or any other agencies were fully rectified, Emaar-MGF said. Any other issues that needed rectifying would be completed after the project was handed back to Emaar-MGF by the organising committee and the DDA, it said. No dues were outstanding to any government agencies and all requirements had been complied with by the company, it said.
The 1,100-plus flats in the village housed athletes from 71 countries but opened after the wettest monsoon in 30 years. Athletes complained of filthy living conditions, shoddy plumbing, broken lifts and flooded basements. Emaar plans to hold a meeting of the board of directors tomorrow to discuss its third-quarter financial results.