The efforts of the Bhubaneswar Development Authority (BDA) to find a higher bidder than Unitech for developing an 11-acre plot in one of the prime locations of the city have come a cropper.
In November 2009, BDA had floated two fresh tenders- one for the entire 11-acre plot and the other for developing one fourth of this plot (2.75 acres) in the Chandrasekharpur area of the city
While the reserve price for the 11-acre plot was fixed at Rs 211 crore, the price which Unitech had offered; the reserve price for the smaller plot was Rs 52.75 crore, about Rs 75 lakh more than what Unitech had already paid to BDA.
But both these tenders have drawn a blank and this can be attributed to the high reserve price set by BDA. The deadline for responding to these tenders was January 4, 2010.
“No real estate developer has responded to our two separate tenders. Now that no bidder has quoted a higher price, the plot in all likelihood, will be developed by Unitech but the final decision in this regard has to be taken by the government”, a top BDA official told Business Standard.
BDA which had at first auctioned the plot in April 2007, had invited fresh tenders for the plot, anticipating a higher bidder.
It had invited two separate tenders as Unitech was prepared to develop one-fourth of the plot.
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Since the agreement with Unitech has not been scrapped by BDA, the real estate major can develop one-fourth of the plot provided the state government gave its nod.
It may be noted that Unitech had emerged as the highest bidder for the 11-acre plot which was auctioned by BDA in April 2007. Unitech had offered to pay a staggering Rs 211 crore for the plot, a transaction unprecedented in the city's realty market.
However after payment of Rs 52 crore, the real estate firm had defaulted in paying the balance amount. The builder had cited economic meltdown as the reason for the non-payment of dues. Thereafter, Unitech had sought back Rs 52 crore which it had deposited with the BDA which was spurned by the authority. Unitech then sought permission for developing one-fourth of the plot as it had paid the proportionate amount.
According to the terms of agreement between BDA and Unitech, the real estate player was to develop the entire 11-acre plot within three years. At least two-thirds of the plot area had to be set aside for commercial development as per the agreement.