In the wake of a dispute over the allotment of plots to realtor M3M Group, the Yamuna Expressway Industrial Development Authority (Yeida) has decided to formulate new guidelines for auctioning the land before allotment of the same to realtors or businessmen.
Sources in Yeida said in the new rules, if only a single bidder comes forward to buy a plot in an e-auction even after two rounds of tendering, then the bid will be cancelled.
In the case of the M3M plots, the authority had allotted the two land parcels without e-bidding after two rounds as only one bidder (M3M) came forward to purchase the land, thereby causing a revenue loss to the government.
As per the existing rules, if only one bidder participates in the first round of the e-auction, the scheme will be extended twice, each time by an additional seven days. And if there is still only one bidder after these extensions, the plot is awarded to that bidder, provided their bid exceeds the reserve price, said officials.
As per the proposed new rules, Yeida wants a competition among different bidders, so as to prevent a financial loss to the government in the event that there is only one bidder.
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“The objective of the new rules is to ensure robust competition between bidders and to avoid potential losses due to the presence of only one bidder during the e-auction. We propose that if there is only one bidder in the first round, the scheme’s deadline will be extended by seven days. If there is still only one bidder after this extension, the deadline will be extended for another seven days. If, by the end of these two extensions, there are two bidders, the plot will be awarded to the highest bidder.If there is still only one bidder, Yeida will be cancel the bid and reissue the tender,” said Arun Vir Singh, chief executive officer. Yeida.
The new rules will also apply to the awarding of infrastructure and development projects and if only one company submits a tender, the tender will not be awarded, said officials.
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Yeida will take the new proposal to the board, which is set to meet on June 21, said officials.
The policy of allotting plots to a single bidder after rollover periods is also in place in Noida and Greater Noida authorities.
However, this practice has drawn flak in the past for enabling single bidders to secure plots at prices only marginally higher than the reserve price for want of competition.
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On May 10, 2024, the state government cancelled the allotment of two land parcels of M3M on the grounds that there was no healthy competition in these allotments. As a result, the government witnessed a revenue loss and the allotment terms and conditions also ignored the suggestions, which were made by the Comptroller and Auditor General of India to remove ambiguities in the allotment rules of Noida, Greater Noida and Yeida.
According to the government order, the companies had secured the land parcels by increasing their bid quotes by just ₹5 lakh over the reserve price.
However, the government has since reversed its decision, withdrawing the cancellation order and reinstating the land allotments. Noida Authority is also in the process of making changes to the e-auction policy.
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