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Auction of 12 liquor retail zones in Delhi from August 25
New Delhi: The Delhi government has floated fresh tenders for auctioning licences for 12 liquor retail zones in the city, bidding for which will open on August 25 and close on September 2, according to documents HT has seen
New Delhi: The Delhi government has floated fresh tenders for auctioning licences for 12 liquor retail zones in the city, bidding for which will open on August 25 and close on September 2, according to documents HT has seen.
The Delhi government has already earned ₹5,300 crore from auctioning alcohol licences for 20 of the city’s 32 zones on August 5 and 6, and looks set to double its excise revenue by netting a record ₹10,000 crore in the first few months of the new liberalised liquor policy.
Auction of the 12 remaining zones could not take place because the bidders got disqualified in the last moment on technical grounds, forcing the government to issue fresh tenders.
The annual reserve license fee for the zones range between ₹220 crore and ₹225 crore, according to the documents.
The government estimates to earn ₹3,180 crore from the auction of licences in the 12 zones, and another ₹650 crore from excise duty, import fees, value added tax and other licence fees, the official added on condition of anonymity.
Another ₹900 crore to ₹1,000 crore is expected to come from licensing of new brands, distributor licenses, etc, the official added.
“The last auction was successful. In the upcoming auction too, the excise department estimates an average premium of 10% over reserve price of license set for each zone,” said a senior excise department official who asked not to be named.
This will mark a new record for the Capital, and push annual earnings growth rate from the current 5-7% to over 30% -- highlighting that a new excise policy, which aims to reform the city’s liquor business by improving user experience, cleaning up the liquor mafia and eradicating pilferage, is making an impact within two months of being adopted.
The average revenue of the city over the past three years stood at around ₹5,500 crore annually, according to government data. The new policy was implemented on June 11.
The 12 zones to be put up for auction include localities such as Sarita Vihar, Shakarpur, Dakshinpuri, Anand Vihar, Tagore Garden, Vikaspuri, Trilokpuri-East, Badarpur, Timarpur, Nawada, Matiala, Rithala, Pitampura, Paschim Vihar, Lajpat Nagar, Jama Masjid, Paharganj, Najafgarh, Punjabi Bagh, Kasturba Nagar, Shastri Park, Mukherjee Nagar, Alipur, Narela, Ashok Vihar, IP Extension, Abul Fazl Enclave, Laxmi Nagar, Kalyanpuri, Sadar Bazar, Sriniwaspuri, Ballimaran, Deoli and Pratap Nagar.
Under the new policy, retailers are free to decide the selling prices in a competitive environment, rather than an MRP being mandated by the government. Each zone will have at least 27 liquor vends — all of which will go to one successful bidder.
When the first set of auction opened earlier this month the reserve bidding price was set at ₹221 crore for each zone on an average but the licences were awarded at an average premium of 20% with the average bid price being Rs. 265 crore, said the official.
The highest bid was received for the New Delhi zone at a 45% premium of ₹315 crores -- which includes areas such as Connaught Place and Janpath.
Tenders for the bids were first floated on June 28, soon after the government implemented the new excise policy on June 11.
