When cartelisation,piecemeal policies hammer at auctions

PARKING LOTS

Auction of paid parking lots has been facing hurdles after an auction that took place in 2010. The auction had fetched an all-time high revenue and each of the parking lots fetched very high prices. Eventually,this led to losses to the contractors,and they could not sustain their business.

From then onwards,auctions of the parking lots have not fetched a very high price or have flopped at times. Each time that the parking lots find no takers,the Municipal Corporation is forced to rethink its policies and reduce reserve prices if need arises. If an auction fails twice,the reserve price is lowered.

It is a group of seven to eight contractors who manage the 23 paid parking lots in the city. As a fall-out of high bidding,the reserve price for subsequent auctions went high. The reserve price is fixed at 75 per cent of the highest bid. Twice last year,the MC received bids lower than what were being received earlier leading to cancellation of the auctions. The contractors instead of bidding too high divide the parking lots amongst themselves and bid only a little higher than the reserve price.

The parking lot at Fun Republic could not find takers till the MC agreed to the demand of the contractors for including additional area into it. The parking lot near office of Medical Officer of Health,Sector 17,is not finding takers as a large number of government vehicles are parked here. It is being demanded that the area be increased.

The most recent auction scheduled in August failed after the MC decided to levy 12.36 per cent service tax on the contractors. Not willing to do this,the contractors refused to participate in the auction. They are demanding that either the reserve price be reduced or the parking fee being charged from residents be hiked. They say that the parking fee has remained Rs 5 for four-wheelers and Rs 2 for two-wheelers since paid parking was started in 2003.

The Finance and Contract Committee of the Municipal Corporation would take a decision on the fate of the parking lots at a meeting scheduled for Monday.

LIQUOR VENDS

Even after five auctions have been held,the UT Excise and Taxation Department has not been able to find takers for all its liquor vends. An attempt to hold the sixth auction flopped with no contractor putting in bids. More than 80 liquor vends in the city were to go under the hammer.

When the auction was held in April this year after the announcement of the Excise Police for the year 2013-14,of the 217 vends that were to be auctioned,103 found takers. In the subsequent auctions,not many liquor vends could be auctioned.

In fact,the pattern that emerged in the five auctions was that the same set of bidders were taking the liquor vends at very high prices and then surrendering these. These contractors had earlier taken over the vends in the same sector. This ensured that there was no competition.

Following this,the Excise Department brought about a change in the Excise Policy and increased the amount of ernest money to be deposited to deter non-serious bidders. Contractors went to court against this. With four months having passed since the new Excise Policy came into force,the contractors are now demanding that concessions be given to them so that they do not suffer losses.

UT Deputy Commissioner Mohd Shayin said that no auction had been planned for the coming days.