BDA expects a higher bidder than Unitech

Even as its decision to re-bid a 11-acre plot earlier allotted to Unitech in one of the prime locations of the city has courted controversy, the Bhubaneswar Development Authority (BDA) expects a higher price for the property than offered by the real estate major.

“We are expecting a higher bidder than Unitech for the plot. Depending on the response to the tenders, we will either award the entire plot or one-fourth of its area to any developer which quotes a price higher than that of Unitech”, D K Singh, vice-chairman, BDA told Business Standard. Justifying the need for inviting two separate tenders for the 11 acre plot, unlike the single tender for the property earlier, Singh said, “Inviting two separate tenders for the property was necessary as Unitech was prepared to develop one-fourth of the plot. One should realize that the economic scenario is not normal due to the slowdown and extraordinary situations call for extraordinary interventions.”

Last week, BDA had floated two separate tenders – one for the entire 11-acre plot and the other for developing one-fourth of the plot situated in the Chandrasekharpur area of the city.

The fate of development of the plot now hinges on the response to the tenders. In the event of any developer quoting a higher price than Unitech, BDA would cancel the deal with the real estate major.

The cancellation of the deal also means that Unitech would stand to forfeit Rs 52 crore which it 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.

Unitech had sought back Rs 52 crore which was spurned by the BDA authority. Unitech then sought permission for developing one-fourth of the plot as it had paid the proportionate amount. Prior to giving approval to Unitech, BDA was keen on testing the waters by going for fresh tenders, hoping that some other real estate player would outbid Unitech. However, the fresh tenders were floated without cancellation of the agreement with Unitech.

“The agreement with Unitech has not been cancelled and it would be allowed to develop one-fourth of the plot if we don't get any higher bidder for the plot. Unitech has informed us that it is ready to go ahead with developing 25 per cent area of the plot after we grant permission for the same”, said Singh.

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.