CAG Finds Lapses in YEIDA Policies, Points to Financial Losses and Delayed Projects
Comptroller and Auditor General (CAG) has uncovered significant lapses in the policies and procedures followed by the Yamuna Expressway Industrial Development Authority (YEIDA), the body responsible for overseeing development in the Noida region. The audit examined YEIDA’s functioning between 2005 and 2021 and found substantial flaws, which have contributed to a large number of stalled projects, financial losses, and inefficiencies.
The audit revealed that YEIDA’s allotment of residential and group housing plots, particularly from 2010 to 2014, led to financial losses totaling Rs 4,226 crore. CAG highlighted the failure of YEIDA’s eligibility criteria for these schemes, which allowed applicants with insufficient financial capacity to bid for high-value plots, resulting in a mismatch between project scale and bidders’ capabilities. In several instances, developers secured plots valued up to 18 times their declared net worth, leading to delayed or incomplete projects. Among the most significant cases was that of Greenbay Infrastructure, which secured a 4 lakh sqm plot in Sector 22D worth Rs 192 crore, despite having little track record in construction. Similarly, Orris Developers and Sunworld City Ltd secured large plots without meeting technical or financial requirements, resulting in significant delays and dues. CAG also criticized YEIDA for allowing applicants to leverage the same net worth for multiple allotments, leading to a concentration of land in the hands of developers who failed to execute projects on time.
In some cases, developers sub-leased plots to third parties without assessing their ability to complete the projects, leading to financial losses and undue profit for developers.
Furthermore, the audit found that YEIDA failed to levy appropriate penalties for delayed projects and was lenient in cancelling allotments for non-compliance. Notably, developers such as Supertech Township Project Ltd submitted tampered documents to secure land, and despite prolonged delays, no immediate action was taken against them. In its recommendations, CAG called for significant reforms in YEIDA’s policies, including revising eligibility criteria to match the value of plots, strengthening penalties for delays, and incorporating safeguards like performance bank guarantees and escrow accounts. The report also emphasized the need to hold consortium members accountable for delays or failures in project execution. YEIDA responded to the findings, acknowledging the deficiencies and committing to rectify them in future schemes. The authority promised to align eligibility criteria with the size and value of plots and introduced a new allotment process, requiring developers to deposit a significant portion of the plot premium upfront. YEIDA has also banned the amalgamation and subdivision of allotted plots and now requires developers to ensure the completion of projects without consortium member exits until finalization.
