Real estate giant Indiabulls on Thursday emerged as the highest bidder for the state government’s prestigious Mantralaya modernisation project with a bid of Rs1,376 crore. The second highest bidder was IL&FS at Rs1,210 crore, followed by Dynamix Balwa Realty at Rs1,200 crore.
The modernisation project — which will change the skyline of south Mumbai once again — will involve refurbishing Mantralaya and the New Administrative Building, constructing an underground tunnel linking the buildings to Vidhan Bhavan and building a rest house as well as six 30-plus-storey towers for ministers, judges and bureaucrats.
So where’s the successful bidder going to make money from? The moolah is in a four-acre plot for free sale in prime south Mumbai, at Nariman Point, on a 99-year lease.
Two years ago, the sale price per sq ft in the Nariman Point area was a record Rs97,000, at the NCPA Towers. The current market price in the area falls between Rs40,000-45,000 per sq ft. Pranay Vakil, chairman of Knight Frank global real estate consultants, said: “The developer is in a win-win situation. If he constructs a residential complex in that area, he will be able to sell it at Rs40,000-45,000 per sq ft in the open market and if he goes commercial, he would get Rs25,000 per sq ft.”
Confirming the company’s successful bid, an Indiabulls spokesperson said the company is yet to decide whether it will construct an information technology park or residential property in the free sale area. But as the far as the redevelopment is concerned, “the project will change the skyline of South Mumbai,” he said.Sources, though, said that bid conditions do not allow an IT park to be constructed in that area.
“From the point of view of a redevelopment scheme, this is the largest transaction recorded till date, even in terms of per acre. Unlike the earlier bids where the land cost worked out to Rs17,000 a sq ft, we have paid almost Rs27,000 per sq ft. In some sense, the transaction marks the revival of the real estate sector,” he added.
PWD minister Chhagan Bhujbal said that “this was only the opening of the bids”. “It will need approvals from other committees and the chief minister before it is passed finally. It still has a long way to go,” he said.
Earlier in the day, the Bombay high court directed the government to allow IL&FS’s bid for the project. The company had moved the court saying the government had erroneously turned down their bid as they had been merely two minutes late in reaching Mantralaya.
The bids had closed at 3pm while IL&FS’s documents were submitted at 3:02 pm. The company argued that they could not reach Mantralaya in time owing to a road block caused by protesting parents and children of New Era School on July 28.
Advocate general Ravi Kadam confirmed that IL&FS’s petition was allowed and they were in the fray when bids were opened at 4pm on Thursday. The bid made by IL&FS was, however, the lowest.
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