Tenders awarded to private developers for revamp cancelled

The state public works development issued a notification last Thursday deciding to axe the tenders for redeveloping the colony.

WITH the project stalled for six years, the Maharashtra government last week formally terminated the tenders to reconstruct the sprawling Government Colony in Bandra (East) with the involvement of private developers, in what was to be one of the city’s largest redevelopment projects.

The state public works development issued a notification last Thursday deciding to axe the tenders for redeveloping the colony, spread over about a 100 acre, awarded to private builders DB Realty and Ackruti City, saying that the companies failed to pay the deposit amount. A third tender for the colony’s redevelopment with Pune-based Kakade Infrastructure is currently under litigation. Unlike DB Realty and Ackruti City (now Hubtown), Kakade Infrastructure had paid Rs 142 crore, its share in the upfront payment.

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Chandrakant Patil, minister for the state Public Works Department, said, “We are ready to pay the amount back to the company, but the matter is currently under litigation with the firm also asking for payment of interest on the upfront amount. The interest works out to be Rs 70-80 crore.” He said that though the tenders had been scrapped, it did not mean that the state government has shelved the revamp of the cluster.

“We weren’t about to explore new options till we canceled the first tenders. The contracts that the previous government had come up with were not structured well. They were given to the developers at a very low amount. We will explore all options for the project, including involving private developers again in a contract that is better drafted,” said Patil.

The project involves the reconstruction of 250-plus low rises, housing more than 5,000 government officials, into towering skyscrapers. It is a prime plot as it is nestled close to the plush Bandra-Kurla Complex and the Western Express Highway.

About six years ago, the Cabinet sub-committee on infrastructure under NCP leaders Chhagan Bhujbal and Ajit Pawar split the redevelopment project into three parts, which were handed over to DB Realty, Ackruti City, and Kakade Builders.

Besides transforming the creaking housing quarters into high-rises, the deal also involved the construction of a shopping mall, a government administrative building and a super-specialty hospital on 70-acre land. The rest of the plot was to be divided between the three developers for constructing residential and commercial space for sale in the open market.

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The project received its first setback after DB Realty’s promoter Shahid Balwa was arrested in the 2G spectrum scam. Six months later, however, Bhujbal went ahead with the tender and asked the three developers to deposit the initial upfront amount of Rs 1,250 crore. While Kakade paid his share, other two developers never paid.

manasi.phadke@expressindia.com

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Bandra Government Colony