NOIDA: Yamuna Expressway Industrial Development Authority (YEIDA) is set to revise its e-auction policy under which it will not allot any plot if there is only one bidder.
It will follow the same policy for handing out project contracts too.
According to the current rule, bids are extended twice — by seven days each — if only one applicant takes part in the tendering process. If there is a single applicant in the third round too, the bids are handed over to it. The only condition is that the bid price should be more than the reserve rate.
Under the new policy — which is likely to be tabled at the next YEIDA board meeting scheduled to be conducted on June 21 — the land allotment scheme or the tender for a project would be cancelled if the third round doesn’t see at least two bidders.
“The idea is to ensure a robust competition between bidders and avoid potential losses because of the presence of only one applicant in e-auctions. In the new policy, we have proposed that if there is only one bidder in the first round, it should be extended by seven days. If the second round too sees only one participant, it can be extended by a week again. But if the third session too fails to attract a minimum of two companies, the scheme will be cancelled for the time being and put off for later,” said Arun Vir Singh, YEIDA CEO.
This revised policy will also apply in cases of handing contracts for projects. “The third round of tender should see at least two participants for any project to be handed over to one of them,” Singh added.
So, what prompted the revision? The policy of allotting projects or plots to a single bidder after the third round has elicited widespread criticism and been dubbed financially unviable. Officials said since only one company or agency came forward after two extensions, projects or land had to be allotted to it even if it quoted a bid price that was marginally higher than the reserve rate.
If there are at least two companies, there would be some competition among them to come up with a better bid price, Singh said.
Noida and Greater Noida authorities still follow the old auction policy. Sources said Noida Authority was in the process of incorporating changes in the plan.
Recently, Noida Authority cancelled the allotment of two commercial plots to subsidiary companies of Gurgaon-based real estate company, M3M. The state govt cancelled these allotments last month, citing concerns over non-competitive pricing. But later, it reversed its decision and reinstated the allotments.
Officials said the two companies had secured the land parcels by increasing their bid quotes by just Rs 5 lakh over the reserve price.
