Unitech project in deeper uncertainty

The row over handing over a portion of a 11-acre plot in one of the prime locations of the city to real estate major Unitech for development has deepened with the Orissa High Court restraining the government to take any decision on the matter.

After the re-tendering process for the plot failed to attract a higher bidder, the state government in all likelihood was to give the nod to Unitech to develop the one-fourth of the plot. But now, the state government is keeping its fingers crossed till February 9, the scheduled date of hearing on the Unitech issue in the Orissa High Court.

In a recent verdict, the High Court had restrained the government from taking any decision on the matter. The court had slapped notices on the department of housing and urban development and the Bhubaneswar Development Authority (BDA) which had invited fresh tenders for the plot. When contacted by Business Standard, D K Singh, vice chairman, BDA said, “No decision can be taken as of now on the Unitech issue as the matter is sub judice. We have to wait till the next round of hearing scheduled for February 9.”

The PIL was filed in the Orissa High Court earlier this month by Gouri Ballav Mohanty. Referring to the re-tendering process for the plot to be developed by Unitech, the petitioner stated that the the entire exercise by BDA was to condone the lapses by Unitech which was illegal, arbitrary and against public interest. By accommodating Unitech's request for allotment of 2.75 acres of land as a compensatory mechanism instead of forfeiture of its security deposit, BDA brought huge loss to public exchequer, the petitioner added.

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. This was in response to Unitech's offer of developing one-fourth of the land area. However, the re-tendering process came a cropper due to the high reserve price set by the BDA.

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.

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.