Adani Realty has emerged as the ‘preferred bidder’ and thereby, clinched the contract for the redevelopment of the prestigious 24-acre Bandra Reclamation land parcel put up by the Maharashtra State Road Transport Corporation (MSRDC). The final stamp of approval will be given by the MSRDC Board slated to meet early next week.
MSRDC vice chairman and managing director Anil Kumar Gaikwad told the FPJ on Wednesday that Adani Realty has emerged as the highest financial bidder offering 22.79 per cent revenue to the MSRDC beating Larsen and Toubro which has placed an offer of 18 per cent. This despite the latter showing a stronger net worth of Rs 84,000 crore (approx) as compared to Adani which stood at Rs 48,000 crore (approx) in the bidding process.
“Since the MSRDC bids are of a revenue sharing model, the developer who offers the maximum percentage of revenue and is beneficial to the government will be the obvious choice. Adani has offered us a higher bid and so he is our preferred choice”, Gaikwad said.
He maintained that MSRDC was monetising the land parcel and interested in whoever offers the highest bid. “We need resources and funds for our new and ongoing infra projects”.
The financial bids of both contenders were opened on Thursday morning at the MSRDC office in Bandra in the presence of JLL Property Consultants, and top representatives of Adani Realty and Larsen and Toubro. The MSRDC Board is slated to meet next week to give its final stamp of approval to the highest bidder and thereby, formally award the contract to Adani Realty.
Gaikwad categorically denied that the bidding process laid out by MSRDC was “tailor-made to favour just one or two developers” as is being alleged by some builders who attended the pre-bid meeting hosted by JLL Consultants for MSRDC three week ago. “It was an open and transparent process. Our bottomline is we want financially and technically strong players.”
According to Gaikwad, both contenders had qualified in the technical and financial capability rounds. “Technically both are strong and have met the stringent criteria and eligibility norms of the tender process. They both are capable of undertaking a project of this magnitude and scale and completing it on time. But Adani is offering us more revenue”.
As per the tender norms, Adani Realty will have to bring money to the table and also take care of all the clearances, permissions of the project. In addition he will have to pay a minimum of Rs 8000 crore to MSRDC. “This is the benchmark amount. If the revenue is more than they will have to share it with us 22.79%”, Gaikwad told FPJ.
The MSRDC bidding process had laid down stringent criteria in the tender document including a challenging condition that the bidder must have a minimum consolidated net worth of not less than Rs 15,000 crore on March 31, 2023. This is a criteria that most developers, sources say cannot meet in a single entity as stipulated in the eligibility norms.
It may be recalled that the pre-bid meet hosted by JLL for MSRDC had been attended by 18 top players including Godrej Properties, Adani Realty, Sunteck Realty, K.Raheja Corp, L&T Realty, Wadhwa Group, Runwal, Oberoi Realty, Lodha, Sattva, Phoenix Realty, Sahana Group, JSW, Mahindra Lifespaces, Wellspun and Sumitomo among others. Of these only three responded to the bidding process.
Many had on condition of anonymity questioned the eligibility norms in the tendering process. Raising serious concerns about the bidding process, some top builders had had alleged that MSRDC was favouring ‘one or two big developers’ and that the bids were ‘tailor-made for a select few”.
“The biggest of us will find it difficult to meet these norms. Imposing a financial criterion to have Rs 15,000 crore net worth in one single entity is restricting the opportunity to one or two builders”, a top builder had said.
Another builder, on condition of anonymity added that the norms are stringent because the developer is expected to pay Rs 8000 crore to MSRDC over a period of 9 to 14 years” .
