UP Govt Tightens Norms for Commercial Land Bids

06 Dec 2024 CW Team

This revision comes in the wake of controversies surrounding land allotments to two subsidiaries of Gurgaon-based M3M Group earlier this year. In May, the state government canceled plot allotments to Lavish Buildmart and Skyline Propcon, citing violations of eligibility terms. Lavish Buildmart had been allotted a plot worth ₹8.274 billion in Sector 94, while Skyline Propcon received one valued at Rupees 1.765 billion in Sector 72.

The cancellation stemmed from allegations that these subsidiaries were awarded plots at non-competitive rates, with bid increases of only ₹5 lakh over the reserve price. The Comptroller and Auditor General (CAG) had flagged similar concerns in its 2021 performance audit report, highlighting ambiguous eligibility conditions that allowed holding companies to use their qualifications for bids, even when subsidiaries failed to meet basic requirements.

Under the revised rules, for consortiums involving holding and subsidiary companies, the holding company’s qualifications will only be considered if it owns 100% equity in the subsidiary. For unrelated consortiums, only companies with at least 26% equity will qualify for technical evaluation.

Noida Authority has been directed to implement these changes in future land allotments. Sources within the Authority believe the updated norms will bolster the state government’s decision to repeal the cancellation of M3M subsidiaries’ allotments in June.

The new framework seeks to eliminate procedural irregularities, ensuring that all bidders meet eligibility criteria independently, thereby fostering fair competition in commercial land allocation.

The Uttar Pradesh government has revised its guidelines for commercial plot allotments, ensuring greater transparency and accountability in the process. As per the new rules issued, individual bidders must now independently meet all technical criteria, including net worth, solvency, and turnover, rather than relying on the qualifications of their holding companies.This revision comes in the wake of controversies surrounding land allotments to two subsidiaries of Gurgaon-based M3M Group earlier this year. In May, the state government canceled plot allotments to Lavish Buildmart and Skyline Propcon, citing violations of eligibility terms. Lavish Buildmart had been allotted a plot worth ₹8.274 billion in Sector 94, while Skyline Propcon received one valued at Rupees 1.765 billion in Sector 72.The cancellation stemmed from allegations that these subsidiaries were awarded plots at non-competitive rates, with bid increases of only ₹5 lakh over the reserve price. The Comptroller and Auditor General (CAG) had flagged similar concerns in its 2021 performance audit report, highlighting ambiguous eligibility conditions that allowed holding companies to use their qualifications for bids, even when subsidiaries failed to meet basic requirements.Under the revised rules, for consortiums involving holding and subsidiary companies, the holding company’s qualifications will only be considered if it owns 100% equity in the subsidiary. For unrelated consortiums, only companies with at least 26% equity will qualify for technical evaluation.Noida Authority has been directed to implement these changes in future land allotments. Sources within the Authority believe the updated norms will bolster the state government’s decision to repeal the cancellation of M3M subsidiaries’ allotments in June.The new framework seeks to eliminate procedural irregularities, ensuring that all bidders meet eligibility criteria independently, thereby fostering fair competition in commercial land allocation.

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