DMRC told to pay 1.1 crore as conversion charges
New Delhi: Delhi Development Authority (DDA) has served a show-cause notice to Delhi Metro Rail Corporation (DMRC) for not paying conversion charges amounting to Rs 1,100 crore for a plot in Dwarka, which DMRC has used for property development.
A DDA official said the land owning agency had allotted a large land parcel in Dwarka to DMRC for the construction of metro station and other purposes. Of this land parcel, around three hectares was allotted for property development to DMRC. DMRC uses land in many areas for development of residential, commercial or office spaces to generate revenue. The three hectare land, which has become a bone of contention, was leased out by DMRC to a hotel, which is now operating from the area.
DDA has now asked DMRC and the hotel to pay conversion charges dating back from 2008, with the total amounting to Rs 1,100 crore. “There is no issue with DMRC leasing the land allotted to it for property development, but it has not followed the proper norms while doing so and that is why they are now being asked to pay conversion charges and have been served a show-cause notice,” said a senior DDA official. “We will wait for DMRC’s response to plan the further course of action,” he added.
DMRC said that it has received a notice from DDA and has already presented its case. “The matter has already been taken up by DMRC and a suitable reply against this has been sent to DDA with all the facts,” said Anuj Dayal, executive director (corporate communications), DMRC.
Property development is an important component of Delhi Metro’s non-fare box revenue generation. “While sanctioning Delhi Metro Phase-I project in 1996, the Union Cabinet had mandated that approximately 7% of the initial project cost should be generated through property development on lands transferred to DMRC for the project. In addition, recurring income should be generated through property development for paying back subordinate debts, etc,” a DMRC official said.