Indiabulls stakes claim to Navi Mumbai plot

Says Bhushan-Essel combine, the highest bidder, has withdrawn but latter denies having done so.

The Indiabulls group is staking claim for a 250-acre Navi Mumbai plot which it had lost to a consortium comprising Bhushan Steel and the Essel group in January this year.

The Bhushan-Essel consortium had emerged the highest bidder for the land, owned by the City and Industrial Development Corporation of Maharashtra Ltd (Cidco) at Rs 1,530 crore, making it one of the biggest land deals in Mumbai in recent times. The total value of the deal came to Rs 2,068 crore considering 26 per cent stake is owned by Cidco in the project.

Indiabulls Real Estate (Ibrel), a company of the Indiabulls group, was the second highest bidder. The company claims the Bhushan-Essel combine has withdrawn and so, it should be given the project. “As per the tender document, we expect the government to invite us, as we have become the highest bidder now,” Ibrel said in its investor update released late on Thursday.

The Bhushan-Essel combine quoted 143 per cent higher than the base price of Rs 630 per sq metre. Indiabulls came second in that auction by quoting Rs 1,059 crore, 31 per cent lower than the highest bid. Another combine, which included the GVK group and Hindustan Construction Company, came third with a bid of Rs 808 crore.

However, Neeraj Singal, managing director of Bhushan Steel, said: “We don't know what Indiabulls is saying. The project was bagged by a consortium, and Bhushan Steel group has not pulled out of the project. We are going slow.”

While Indiabulls Real Estate executives declined to comment on the development, Pratik Gandhi, vice- president, finance, of Future City Properties Pvt Ltd, floated by the Bhushan-Essel combine to bid for the project, said: "No money has yet fallen due for the payment, as we have not received any letter of allotment from Cidco.”

The bid money is to be paid within a month of issuing the letter of allotment.

According to sources in the Bhushan-Essel consortium, bid documents say if the winner fails to make payment within the deadline, rebidding has to take place.

"The auction process is not completed so far. Cidco is yet to convene a board meeting on the allotment, '' said sources in the know.

Bhushan-Essel was planning to set up a Bollywood theme park at Kharghar in Navi Mumbai. The consortium had beaten nearly 100 bidders in January to emerge as the top bidder to acquire the Cidco land.

The project entails an allocation of 60 per cent (around 150 acres) for the development of a theme park on the Kharghar Hill Plateau, while the rest may be used for real estate development.

Amidst this latest confusion, property consultants say the project is not financially viable, given that it has an FSI (floor space index), the amount of construction allowed on a given plot, of only one.

“The price quoted by the highest bidder was double that of the fair valuation and much higher than the second highest bid. If you undertake residential or commercial development at such a price, it is understandable, but a theme park cannot make so much money,” said a senior executive with an international property consultant who had valued the land for a prospective client.