The CAG while auditing HSIIDC observed that the valuation of the property which was to be developed for recreation and leisure activities in Gurgaon was misleading
The Comptroller and Auditor General of India (CAG) on Monday criticised the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) for selling land at undervalued rate to real estate giant DLF. DLF bought the land for setting up a recreational project in Gurgaon which led to a financial loss of Rs438.91 crore.
In its latest report on Haryana’s PSUs for the year 2011-12, CAG while auditing HSIIDC observed that the valuation of the property which was to be developed for recreation and leisure activities in Gurgaon was misleading.
ILFS Infrastructure Development Corporation, which was appointed as a consultant for assessment of land cost (in March 2008), valued the land cost by using a mixed approach which means multiplying average market rate of land with average District Collector (DC) rate.
“The value of property was worked out at Rs1,683.58 crore (by the consultant) whereas the valuation of the property by considering average factors of 2.79 times for residential area and 3.105 times for commercial plots works out to Rs2,142.11 crore,” the CAG pointed out.
However, HSIIDC approved the reserve price at Rs1,700 crore for bidding on the basis of the consultant’s valuation while the government accepted the DLF’s bid at Rs1,703.20 crore.
“HSIIDC by accepting the consultant valuation without any analysis and study suffered a loss of Rs438.91 crore,” the CAG noted.
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basing on market value.
Then, my dilemma disappeared.