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After studied silence that followed charges of DB groups involvement in the 2G spectrum scam,the state government has now decided to go ahead with the Bandra government colony redevelopment project in which DB Realty has the highest stake.
In the immediate aftermath of DB group co-promoter Shahid Balwas arrest in February this year,Mantralay officials had said that the government will review whether the project should be handed over to the realty major. Sources in the Public Works Department (PWD) have now confirmed that the project has been put back on track. This month,all three developers DB Realty,Ackruti City and the Pune-based Kakade Group have been asked to make the upfront payment of Rs 1,250 crore due to the government.
The state government recently asked us to go ahead with the tender formalities after which we wrote to all three developers asking them to make the payment within the stipulated 15-day period, said a PWD official. He added that the developers have asked for an extension of three to four months for raising the money. Of the total amount,DB Realty alone is expected to pay Rs 800 crore.
Spread over a 95-acre green enclave,the redevelopment of the government colony is slated to be the citys largest such project. A big chunk of the redevelopment pie of 57 acres is with DB Realty. Last July,all three developers were issued the Letter of Intent by the government. However,the process came to a standstill after the companys name came to the fore in the 2G scam this February.
PWD minister Chhagan Bhujbal said the government had only said it will examine whether the project was allotted as per rules and regulations. We had only said that we will reconsider it. The bids were approved by the Cabinet. We havent found any flaw so as to take action against it, said Bhujbal. He added that until any of the charges against the company are proved,the government cannot cancel the allotment as DB can challenge the decision in court.
Besides the upfront payment of Rs 800 crore to the government,DB Realty is expected to pump in more than Rs 2,000 crore to redevelop the land. If at all the company says it do not have the capacity to raise the money,it will have to forfeit its deposit and we will then retender the project, said Bhujbal.
While the spokesperson of Ackruti was not available for comment,DB Realty confirmed they had received the government letter for payment. Our understanding is that the three bidders who received the letter have asked for additional time from the government for making the payment, said a DB spokesperson.
Kakade Group founder Sanjay Kakade said his company will make its share of the payment by the end of this month. We will be paying Rs 146 crore by August-end, he said.
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