Vadra’s Land Deal: Why is the BJP Not Probing DLF?

Was there a quid pro quo for DLF in return for its sweetheart deal with the Congress president’s son-in-law? The Haryana government is silent on Khemka’s letter that suggests there was. 

File photo of Robert Vadra (PTI)

File photo of Robert Vadra (PTI)

Chandigarh: Even as the BJP government in Haryana sets unusually strong terms of reference for an inquiry that encompass all aspects of Robert Vadra’s controversial land dealings in the state, it is strangely reluctant to examine what the quid pro quo was, if any, to DLF for buying a licence at seven times the market price from the Congress president’s son-in-law. This when it could well have acquired the same on its own on the strength of its technical and financial capacity as a leading real estate developer.

On May 14, the Haryana government notified the Justice (Retd) SN Dhingra Commission of inquiry on May 14th to probe irregularities in the allotment of colony licenses in Sector 83 Gurgaon.

Many in the Haryana administration suspect the favour DLF did to Vadra’s Skylight Hospitality could not have come without a consideration. And though non-Congress politicians have been baying for Vadra’s neck ever since the matter became public way back in 2012, there is a marked reticence about the ‘windfall gains’ to DLF or the larger question of trading in licences -which is a potential can of worms that no one wants to open.

Whistleblower & Wazirabad

Only one man, Ashok Khemka – the Haryana IAS officer who stands chargesheeted for cancelling the Vadra-DLF land mutation and initiating a probe into his other land deals in the state – is saying that it is not enough to probe the grant of licenses to Vadra. He believes the concessions that DLF secured at around the same time need to be scrutinised as well in order to check whether the Vadra deal was part of a wider arrangement.

DLF had effectively paid a price of Rs. 50,50,00,000/- to Skylight Hospitality for the commercial license granting it an FAR (Floor Area Ratio) of 175 on 2.701 acres of land in Sector 83, Gurgaon, when the company could have obtained the same commercial license directly from the Town & Country Planning Department by paying a much lesser amount of Rs. 7,41,30,000. So why did the company choose to pay more?

On November 24, 2014, Khemka spooked the Manohar Lal Khattar government in Haryana by writing a detailed letter that uncovered, with the help of documents procured through RTI, what he believes is a possible quid pro quo worth Rs 1000 crore that DLF got in return.

The focus of his investigation was 350 acres allotted to DLF in Wazirabad (Gurgaon), now sectors 42, 53, 54, and the concessions worth Rs 1000 crores given to DLF by the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) while allotting the land in 2009 and 2010. This was at around the same time as its deal with Skylight Hospitality was playing out. Alleging that the “deal between M/s DLF and M/s Skylight Hospitality could be one of the motives for bestowing huge favours (amounting to more than Rs 1000 crores) upon M/s DLF in the present case,” Khemka told the government that the matter “needs to be probed by an independent agency.”

He also urged the Khattar government to put all aspects of the “special favours” granted to DLF in the allotment of this land before the Supreme Court so as to unravel the business-politician-bureaucracy nexus .

Khemka’s missive came a few weeks after the Punjab and Haryana High Court – while quashing the allotment of this land on a technicality – noted on September 2, 2014, that “possible undertones of the entire process being initiated to favour DLF may be discernible”. The court’s remarks unnerved top bureaucrats who had steered the allotment of land to DLF. The high court had also ordered re-auction of the land through international bidding, but this was stayed by the Supreme Court on the appeal of DLF and the HSIIDC. Following Khemka’s letter, the HSIIDC quietly withdrew its appeal without giving any reasons. Neither was the court apprised of the “favours” given to DLF nor was any probe initiated as suggested by Khemka.

The decision was taken at a meeting headed by the chief minister on 27th November, where it recorded that while the government will comply with the orders of the High Court that quashed the allotment, it will try to “set aside the remarks of the court which cast aspersions on the government and HSIIDC.” As for the alleged favours shown to DLF which enabled the realty giant to receive most favoured builder treatment from the political executive, detailed in Khemka’s note, it was decided that “other concerns which have come to our notice regarding bidding process and award of project, will be addressed while inviting fresh bids.”

Relaxations favoured DLF

That powerful people in the government and the top bureaucracy would prefer to keep the focus of the Vadra probe away from the favours granted to DLF at that time is clear; this is because if the scanner turns that way, it could become uncomfortable for several officers who sat on the committees that gave away the concessions.

Khemka’s expose is about relaxations given to the real estate giant in the pre bid, bid and post bid stages of the Wazirabad allotment between May 2009 and January 2010.

After the first tender in April 2009 for which a reserve price of Rs 1700 crore was fixed did not materialise, a second tender was floated in August 2009, in which the land utilisation plans were changed, allowing for an additional area of 54.6 acres for residential use in area meant for forest land. It was also specified that in case the additional 54.6 acres could not be utilised due to land use restrictions by the Supreme Court, the successful bidder could utilise the unutilisable balance in any urbanisable pocket within the Gurgaon–Manesar Development Area. But there was no re-computing of the Rs 1700 crore reserve price to account for the additional allowance of residential area. Khemka’s letter says that the omission was by design in order to keep the bid rate low to benefit DLF, and was “grossly underestimated by Rs 516 crores”.

The second tender included another condition in which the successful bidder was insured that in case any Floor Area Ratio (FAR) -175 in this case – was not utilised due to land use restrictions for environmental reasons, the balance unutilisable area could be utilised in any urbanisable area within the Gurgaon Manesar Development Area. Incidentally, though the unutilised FAR was allowed to be transferred to group companies, the same could not be traded, foreclosing any competition that could arise from other developers to DLF. Khemka’s letter points out, “The condition was tailor-made to give an unfair pre-bid advantage to M/s DLF….. as any non clearance of land use by the SC would actually turn into a gold mine for the company because it could use an additional FAR of 175 on the balance area in the better valued areas of Gurgaon commanding a market rate of Rs 50 crores and above… The condition was by itself not bidder neutral, greatly favouring the realtor company with the largest land bank in the area.”

DLF was then given a post-bid interest waiver that effectively reduced the allotment price by 30%. After winning the bid, DLF was to pay the balance 75 % of the bid amount, i.e. 12775.5 crores, in ten half-yearly installments with 11 per cent interest on the reducing balance from year 3 to 7. Khemka’s letter states, that a clause was inserted in the allotment letter issued to DLF on February 9, 2010, that the effective zero date for computing interest on the balance will start from the date approval for land use restrictions is received, with the result that no interest has been paid on the balance 75 % by DLF till date. This “effectively reduced the original allotment price by 30 % … to Rs 1203 crores from Rs 1703.2 crores on paper.”

Reluctance to dig deeper

As the BJP government turns the heat on Robert Vadra in a desperate attempt to deflect the sharp attacks from Rahul Gandhi, the question is whether it will look into all aspects of l’affaire Vadra which includes the alleged favours that DLF received in Wazirabad (Gurgaon) or limit itself to the alleged irregularities in giving colony licences to Vadra and others in Sector 83 Gurgaon? Powerful bureaucrats who took decisions that allegedly benefited DLF occupy top positions in the present government and are resisting scrutiny of the allotment of the Wazirabad land on the plea that the matter is before the SC. Khemka’s suggestion to put all material facts regarding the deal as uncovered by him before the apex court has been ignored.

The Congress has consistently maintained that the Vadra–DLF deal was a private transaction between two entities and if one gave some favours to the other it was purely between them. The then Haryana chief minister Bhupinder Singh Hooda is also fond of saying, ‘I will give up politics if anyone can prove than even an inch of government land has been given to anyone.” He could be technically right. Khemka fears articulated in his November 2014 letter are that unless the favours given to DLF and the ‘business-political nexus’ is not brought to the notice of the SC, “as in so many other scams, the wrong doers may go scot free in the present case also.”

But Khemka is even today a chargesheeted officer whose every word is seen as ‘motivated’ by those in power. His chargesheet stands even after the BJP came to power.

As soon as the Khattar government assumed office, the irrepressible officer tweeted, “Will new regime in Haryana be able to resist money making in license-transfers and name and shame all those who profiteered in the past?” More recently, when a CAG report was tabled in the state assembly on March 25 that detailed how rules were bent by the Hooda government to accord permissions to Vadra’s Skylight Hospitality, Khemka again tweeted his anguish, saying, “Many issues are untouched in CAG report”. His letter asks questions that any competent officer probing an irregularity would ask. The trouble is the BJP government seems to fear what the answers to those questions might be.