Excise mulls higher reserve price to oust non-serious players

After several instances of liquor vends being auctioned at high prices and then surrendered,the UT Excise Department is contemplating increasing the reserve price of the vends.

Written by Khushboo Sandhu | Chandigarh | Published:July 2, 2013 2:35 am

After several instances of liquor vends being auctioned at high prices and then surrendered,the UT Excise Department is contemplating increasing the reserve price of the vends. The department hopes that once this is implemented,only contractors who are serious about running the vends would enter the bidding process.

With an increase in the reserve price for the vends,the earnest money,that a successful bidder is required to deposit,will increase. Since this amount is non-refundable,it is expected that only those who intend to retain the vends would bid for them.

There are several liquor vends in the city which are vacant due to attempts by the liquor cartels to ensure monopoly. Over the past few auctions that were held by the Excise Department,a trend has emerged wherein in order to retain their monopoly in some areas,contractors were bidding for vends in the

same area and later surrendering them. In fact there have been instances when the vends were auctioned at a

very high price simply to be surrendered.

UT Deputy Commissioner Mohammed Shayin confirmed that there is a proposal to hike the reserve price. “The increase in the reserve price would weed out the non-serious contenders,” he said.

One such instance was in Sector 22 where three vends were up for auction at the market opposite the ISBT. Of these,one was taken over during the first auction. The other two have not been occupied till date. The reason: They were auctioned at very high prices. During the second auction,an amount of Rs 4.25 crore was bid for one of the vends in Sector 22 and Rs 4.21 crore for another against the reserve price of Rs 1.27 crore. They were amongst the highest bids received for any vend in the city. Within a few days of them being auctioned,however,they were surrendered.

It’s a similar case in Sector 20. Of the two liquor

vends in the area one is operational. The other was bid for

a high amount and then

surrendered.

The contractors who succeeded in the auctions paid the earnest money and surrendered the vends. In case of Sector 22,the successful bidder paid Rs 13 lakh and surrendered the vend. A liquor contractor stated that this amount could easily be recovered when there is just one vend functioning in the area since the sale of liquor instead of being divided at three places would be centered at one shop.

After the changes that were brought in the Excise Policy for the year 2013-14,several liquor vends are vacant. In fact after the first auction held in April this year,more than 50 per cent of the vends have not found takers. The Excise Department has held a total of four auctions. Before the fifth is held it is expected that the reserve price would be increased.

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