Govt. denies procedural irregularities in land auctions

Says charges aimed at maligning State, Central agencies; threatens legal defamation

Seeking to quell the controversy raked up about the recent auction of lands by HMDA and TSIIC at Kokapet and Khanamet respectively, the government has issued a clarification on Tuesday refuting all the charges of procedural irregularities, and threatened the “maligners” with legal action.

The online auction was conducted by MSTC Ltd., a public sector unit, hence there is no scope for manipulation, the statement issued by the Information & Public Relations department said.

The up-set price was kept at a reasonable level of ₹ 25 crore per acre in order to present a level playing field for intended bidders and not to create entry barrier. This was intended for maximum participation and with the thought that entry bid price shouldn’t get restrictive to the interested parties. The bidders were allowed to quote in multiples of ₹ 20 lakh above the up-set price, and the last quote remained live for eight minutes. The bids were finalised only when no further quotes came within eight minutes after the final quote.

Several factors such as location and size of the plot, access to road, road width, Vaasthu compliance and other physical features determine the final price for any plot, on the principle of ‘Market Discovery’. As such, the final price can never be the same for various plots.

Swiss Challenge method, which involves allowing an initial bidder to match the best of bids invited for a project, is not a way forward to carry out such open bids, as it is impossible to set the floor in advance in the absence of market discovered price. Moreover, the method in such open-bid based auctions becomes restrictive by nature by curbing competition, the clarification claimed.

HMDA and TSIIC did their best to reach out to the maximum number of potential clients through a paper advertisement campaign, it said. An agency was hired to reach out to the clients through emails and direct communication. The Indian High Commissions and embassies located in various countries and also the Ministry of External Affairs was roped in to send the copy of e-auction notification and brochures to various missions overseas. A record number of 80 interested firms participated in the pre-bid meeting due to all these efforts, the note said.

In order to ensure maximum participation, the eligibility criteria was kept as open as possible subject to certain basic minimum conditions.

In order to maintain transparency, each participant was given an exclusive log-in which cannot be accessed by others. It is not possible even for the auctioning agencies to know the details of bidders at any point during the bid process, hence any apprehension about someone trying to influence the bid is totally unfounded, the note affirmed.

Calling the allegations about restricted competition as aimed at maligning the process and the reputation of State and Central government agencies, the statement threatened legal defamation over them if they continue further.

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