GMADA may lower reserve price

Mohali, September 11

With the aim of attracting greater public participation in the sale of commercial and residential freehold sites in the town, the Greater Mohali Area Development Authority (GMADA) is expected to lower the reserve price of the properties to be put under the hammer at its upcoming auction. The price is likely to be reduced by 10 per cent, it is learnt.
Dismayed by the poor response to its last two auctions, GMADA had been taking up the issue with the Punjab government. The auctions, held in February 2010 and in September 2009, were lackluster due to the high reserve price. In the former auction only a dozen of the 45 commercial sites on offer could be sold and in the latter only 17 of the 69 commercial sites went under the hammer, with residential properties finding no takers.
To enable reduction in the reserve price, GMADA has reworked the standard formula that allows officials to decide upon the reserved price of a specific site. The plan for a major shift in the auction norms is expected to be approved by the authority’s executive committee at its meeting scheduled on Monday.
Sources close to GMADA said it has been proposed that the reserve price of unsold sites and the price of the sites that have been sold would be clubbed while calculating the lowest price to start bidding for a property in a specific sector. This would automatically bring down the reserve price of a site, which would vary for different sectors, they added.
GMADA chief administrator Sarvjit Singh said the proposal to recalculate the reserve price of auctioned sites was under consideration. “The final decision would be known only after the necessary approval by the authority”, he added.
It has been learnt a proposal to demand full payment of an auctioned plot within 90 days of the respective auction was also under active consideration. Presently, after payment of 25 per cent of the auctioned price of a commercial site within one month of an auction, the balance 75 per cent payment has to be made in four yearly installments. Accepting payment within 90 days would reduce litigation as most of the disputes have been related to payments. Since the move is likely to face adverse reaction from investors, it has reportedly not found favour with senior Punjab government officials.

FULL BID PAYMENT MULLED

A proposal — on the pattern of the UT estate office — to demand full payment of an auctioned plot within 90 days of the respective auction is being considered by GMADA.