The National Democratic Alliance (NDA) government’s plan for redeveloping Pragati Maidan
faces a pricing problem. The lowest bid for the project to create an international exhibition-cum-convention centre is about 40 per cent higher than the Cabinet-approved cost of Rs 2,254 crore.
Infrastructure major Larsen & Toubro (L&T) put in the lowest bid for the tender that saw participation from the Tata group, Shapoorji Pallonji and international players, including from Korea, Japan and West Asia. The tender process has been cancelled and NBCC
Ltd called for fresh bids
last week. In all, about a dozen companies had shown interest in the project.
The central government-controlled NBCC
is the project management consultant for India Trade Promotion Organisation
(ITPO), which owns the sprawling Pragati Maidan
complex in central Delhi.
A senior official told Business Standard
that a fresh tender was issued on July 24. The bids
are expected to be opened on August 24. The project would be awarded in the first week of September, under the revised bidding process.
When contacted L C Goyal, ITPO chairman and managing director, said, “The earlier bids
were not found acceptable by NBCC.
It has now gone for a fresh tender.”
In January, the Cabinet Committee on Economic Affairs (CCEA) had approved construction of a new international exhibition-cum-convention centre at a cost of Rs 2,254 crore, in time to host the G20 summit meeting in 2019. Though officials said the target was still to finish the work in 24 months from the date of award, the centre is unlikely to be ready by early 2019. India is also not likely to pitch for hosting the G20 summit. According to the CCEA’s decision, the first phase of redevelopment, that would cover nearly 326,000 sq m, was to be completed by May 2019.
A person close to the development said bidders had built in certain design and risk factors which led to an increase in cost assumptions. In the revised tenders, the issue has been addressed. Another official, however, said changes in design such as locating a helipad led to an increase in cost assumptions.
Under a funding plan approved by CCEA, ITPO would invest Rs 1,200 crore out of its reserves for the project. The balance amount of Rs 1,054 crore would be raised by way of long-term loans from banks, financial or external institutions for which ITPO had appointed SBI Caps financial advisor. These loans will be backed by a government guarantee. After the redevelopment, the exhibition space would be doubled to 119,000 sq m against the current space of 65,000 sq m.
Redevelopment would include creation of a modern convention centre with a seating capacity of 7,000.
The mega plan included building a road under the exhibition area with direct entry into the underground parking area, with space to hold 5,000 cars. Pragati Maidan
hosts global events such as the Indian International Trade Fair, World Book Fair and Petrotech. ITPO, under the commerce ministry, currently runs the exhibition centre inaugurated in 1972 by then prime minister Indira Gandhi.
The project had run into controversy after the famous Hall of Nations was demolished among other structures to enable fresh construction. The demolition exercise included pulling down 10 halls, all 23 state pavilions and four pavilions of the central government ministries.
ITPO is also looking to monetise 3.7 acres of land, where a hotel is planned. Another Cabinet clearance would be required for the purpose. The plot at one end of the complex is proposed to be sold freehold or given on perpetual lease.