Hurdle for Bandra revamp project
The state government may review the deal signed with DB Realty for redeveloping a large chunk of the Bandra Government Colony, spread across 95.80 acres, following the arrest of the company’s managing director Shahid Balwa by the Central Bureau of Investigation (CBI) in the 2G spectrum scam.mumbai Updated: Feb 13, 2011 02:00 IST
The state government may review the deal signed with DB Realty for redeveloping a large chunk of the Bandra Government Colony, spread across 95.80 acres, following the arrest of the company’s managing director Shahid Balwa by the Central Bureau of Investigation (CBI) in the 2G spectrum scam.
Public works minister Chhagan Bhujbal, whose department handed over the redevelopment project to DB Realty besides other two developers, told the Hindustan Times: “I will ask my officials to check what the status of the project is, the details of the agreement signed with D B Realty and whether we should review it in the light of the current situation.’’
Bhujbal said he was not sure of how much DB Realty owed the state government and what the timeline for payment was. He said he would ask for a review once he was in Mantralaya.
“I don’t want to say anything about the Bandra project,” Vinod Goenka, partner in DB Realty, said.
The redevelopment of the huge Bandra colony, considered prime property given its proximity to the Bandra-Kurla Complex and the Western Express Highway, is one of the biggest real estate deals in the city in recent times. DB Realty was selected to redevelop Sector J spread across 57 acres here and in exchange was given a 12-acre plot for commercial use.
DB Realty was to pay the state government a premium of around Rs 800 crore for this deal besides redeveloping the residential colony.
Senior officials in the state secretariat said that there was apprehension about whether the developer would be able to pay the premium to the state and execute the project given the CBI scanner on the firm and banks unsure about lending monies for the company’s new projects. The developer is expected to revamp the colony within five years.
“Even if they [DB Realty] manage to pay us for the deal, they have to invest Rs 2,000 crore in redeveloping the project. The question is whether they can raise these finances and if it will derail the project,” a senior bureaucrat said, requesting anonymity because he is not authorised to comment on the subject.
A statement issued by the company on Wednesday said: “DB Realty is a strongly capitalised company with a net worth of Rs 3,210 crore as on December 31, 2010.
DB Realty Limited has sufficient resources to continue with all its projects under construction.” The other two developers redeveloping the colony include the Pune-based Kakade Group, and Ackruti City.