India's largest land deal, valued at Rs 5,006 crore, has fallen through. Leading real estate company Business Parks and Town Planners (BPTP), which has paid Rs 1,300 crore so far, has written to New Okhla Industrial Development Authority (NOIDA) saying it wants to surrender the land as it is unable to pay the remaining installments.
On March 11, 2008, BPTP won the deal for the 95-acre plot at Rs 1.3 lakh per acre, edging out realty majors like DLF and Omaxe.
BPTP officials said that its has applied to NOIDA following a change in Uttar Pradesh government’s policy that gives developers an option to either reschedule their payment plans or surrender the plot and seek benefit of moratorium or forfeit 10 per cent of the amount already paid and get land elsewhere for the remaining amount. The decision for this change in policy was taken by NOIDA on its last board meeting held on January 20.
“Following the UP Government policy announcement, BPTP has made an application to the Noida Authority for surrender of plot and are awaiting decision of NOIDA,” said Sudhanshu Tripathi, director, BPTP Limited. “We will put the proposal before the board in our upcoming meeting and a decision will be taken as per the policy,” Lalit Srivastava, chairman at NOIDA told Hindustan Times.
NOIDA is expected to take a decision on BPTP’s request in their upcoming board meeting scheduled for February 6. Sources said NOIDA could resort to draw of lots to allocate the land to BPTP.
“Indian real estate industry is adversely affected due to the turmoil in the global market. All the sources for financing projects have dried up and as a result major real estate players have defaulted in making timely payments to government authorities whether towards land payments or government dues,” BPTP said in a press statement.
“Keeping in view the slowdown in real estate market, Confederation of Real Estate Developers Association of India (CREDAI) has given representations to the Central Government and various state governments for relaxation in policies and to make projects viable in current circumstances. One such representation was given by the CREDAI to the UP government authorities for relaxation in the policies and norms for the real estate developers having interest in Lucknow, Noida and Greater Noida and Ghaziabad as it was becoming difficult for the developers to make payments of installments and other government dues.