The Hindu Business Line : Rlys reinvites bids for development of land in Bandra-east

New model
RLDA to let private developer take the entire project structure on lease for 80 years against an upfront payment
Reserve price is fixed at Rs 4,600 crore
Govt doubles floor space index to 4 from 2

Mamuni Das

New Delhi, Sept. 5 With an aim to make more funds available for rail projects in Mumbai and Maharashtra, Rail Land Development Authority (RLDA) has changed the bidding model and re-invited bids for commercial development on 45,371 sq metres of railway land in a prime location in Mumbai’s Western Express highway at Bandra-east.

In the new model, RLDA has decided to let the private developer take the entire project structure on lease for 80 years against an upfront payment. The reserve price has now been fixed at Rs 4,600 crore based on the Mumbai Metropolitan Region Development Authority rates. “The new model was adopted because Maharashtra Government wanted funds to be available upfront for rail projects in Mumbai and the State,” said sources in the know.

EARLIER MODEL

From a Railway perspective, the earlier model had a mix of upfront payment and rental returns. The successful bidder was supposed to build two identical office blocks of same size and quality; operate one building on lease for 80 years and handover the other free of cost to Railways. RLDA had fixed the reserve price at Rs 1,750 crore. So, for one block, Railways would have received upfront payment from the developer; while for the other, it would have earned rentals.

To make the project more attractive, Maharashtra Government has doubled the floor space index (FSI) to four from two, which would allow the developer to commercially exploit a larger area. The doubling of FSI was subject to condition that the entire benefit of incremental floor space should accrue to rail projects of Mumbai and Maharashtra in 2:1 ratio.

From the initially conceived FSI, one third proceeds would accrue to rail projects in Mumbai, one-third to those in Maharashtra and one third to projects in rest of the country.

RLDA has also relaxed some qualification parameters to increase competition “in a transparent manner without limiting any player”. The applicant is now required to have successfully completed at least one real estate project of 30,000 sq m built up area in last 10 years anywhere in India.

Earlier, the applicant was required to have completed 50,000 sq m built up area in last five years in the metropolitan cities only. An earlier requirement of an average annual lease income of Rs 150 crore during the last three years in metros has also been done away with.

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Rlys reinvites bids for development of land in Bandra-east