BDA may go for fresh tenders for Unitech's plot

With Unitech's proposed residential cum commercial project in the city being mired in uncertainty, the Bhubaneswar Development Authority (BDA) is exploring the possibility of floating fresh tenders for the 11-acre plot which was to be developed by the real estate player.

“We may go for a fresh tendering process for the 11-acre plot in the city which was to be developed by Unitech. BDA is thinking of floating two separate tenders- one for the entire 11-acre plot and the other tender for one -fourth of this land area as Unitech had sought our permission for developing one-fourth of the plot in the wake of the economic meltdown”, DK Singh, vice-chairman, BDA told Business Standard.

Depending on the response to the tenders, BDA may award the plot to a real estate developer if it quoted a price higher than that of Unitech.

“We will allot the entire 11-acre plot to a developer if it quotes a price of more than Rs 212 crore which was Unitech's bidding price when the plot was auctioned in 2007. However, if none of the real estate developers is keen on developing the entire plot, they would have the option to develop one-fourth of the land area for which they have to quote a price of more than Rs 52 crore”, said Singh.

In April 2007, Unitech had emerged as the highest bidder for the 11-acre plot auctioned by the BDA. Unitech had agreed for a price of Rs 20 crore per acre and DLF which had offered a bidding price of Rs 11 per acre was the second highest bidder.

However, Unitech was unable to make headway on the project as per the stipulated time line and had sought BDA's approval for developing one-fourth of the 11-acre plot in one of the prime locations of the city. The real estate player had so far paid Rs 52 crore to BDA.

For the time being, BDA has recommended to the state government that since Unitech has deposited only one-fourth of the total land cost, it may be permitted to develop only one-fourth of the plot, informed Singh.

Sources familiar with the development had earlier indicated that Unitech had sought an extension of two years for the project from the BDA as the cash position of the real estate major was not comfortable in the aftermath of the economic recession.

"After paying the initial amount to BDA for the 11-acre plot in March 2008, Unitech had sought three months time for paying the balance amount as a lump sum. However, the company had defaulted in paying the requisite amount as its cash position was not favourable", added sources.

Unitech’s alleged delay in payment of the balance amount to BDA had given rise to speculation that the realty player was considering to pull-out of the project. In the event of its withdrawal from the project, Unitech stands to forfeit Rs 52 crore which it had paid to the BDA.

As per the terms of agreement between Unitech and BDA, the real estate player was to develop the 11-acre plot by the end of 2010.