Adani Realty has emerged as the highest bidder for the redevelopment of the Maharashtra State Road Development Corporation’s (MSRDC) 24-acre plot at Bandra
Reclamation close to the Bandra-Worli. Adani offered a revenue share of 22.7%, compared to Larsen and Toubro (L&T’s) 18%. However, the final decision will be made by the MSRDC board next week.
The land parcel has a potential development area of 45 lakh square feet and is valued at around ₹30,000 crore. Adani won a mandate in November 2022 to redevelop Dharavi, Asia’s largest slum cluster, with a bid of INR5,069 crore.
The decision comes despite L&T having a stronger net worth of approximately ₹84,000 crore compared to Adani’s ₹48,000 crore, Adani’s higher bid secured the preference.
According to Anil Kumar Gaikwad, the Vice Chairman and MD of MSRDC, the decision was based on a revenue-sharing model.
Gaikwad also refuted allegations that the bidding process favoured specific developers. He emphasised an open and transparent process, seeking financially and technically strong players. Both Adani Realty and L&T qualified in technical and financial capability rounds.
“Since the MSRDC bids are of a revenue-sharing model, the developer who offers the maximum percentage of revenue and is beneficial to the government will be the obvious choice. Adani has offered us a higher bid so he is our preferred choice. We need resources and funds for our new and ongoing infra projects,” said Gaikwad.
“Technically both are strong and have met the stringent criteria and eligibility norms of the tender process. They both are capable of undertaking a project of this magnitude and scale and completing it on time. But Adani is offering us more revenue,” he added.
Adani Realty will be responsible for bringing funds, handling clearances and permissions, and paying a minimum of ₹8,000 crore to MSRDC as a benchmark amount. The revenue-sharing model stipulates a 22.79 percent share for MSRDC. “This ( ₹8,000 crore) is the benchmark amount. If the revenue is more than they will have to share it with us 22.79 percent,” Gaikwad said.
The MSRDC bidding process set stringent criteria, including a minimum consolidated net worth of ₹15,000 crore by March 31, 2023. This criterion raised concerns among some builders during the pre-bid meeting.
While 18 top players attended the pre-bid meeting — Adani Realty, Godrej Properties, JSW, K.Raheja Corp, L&T Realty, Lodha, Mahindra Lifespaces, Oberoi Realty, Phoenix Realty, Runwal, Sahana Group, Sattva, Sunteck Realty, Sumitomo, Wadhwa Group, and Wellspun, among others, however, only three responded to the bidding process.
Anonymous sources had raised concerns about the eligibility norms favouring only a select few. Some builders argued that the ₹15,000 crore net worth requirement in a single entity restricted opportunities for all but a few developers. However, MSRDC noted the criterion came amid concerns, considering the developer’s obligation to pay ₹8,000 crore to MSRDC over 9 to 14 years.
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