LAHORE:
Investors showed little interest in the Lahore Development Authority (LDA)’s auction of two plots for a hotel and a superstore in a new commercial zone in Johar Town on Saturday.
LDA officials were left red-faced at the lack of bidders at the auction, having previously postponed it in the hopes of attracting more investors.
This was the LDA’s first auction of plots –114 kanals for the hotel and 94 kanals for the superstore – in the planned Finance and Trade Centre in Johar Town. It set a base price of Rs1.2 billion for the hotel plot and Rs1.1 billion for the superstore plot. Officials had said they were hopeful of getting at least Rs2.5 billion from the auction.
But the signs were not good from the start. Scheduled to start at 10am, the auction did not begin until noon as officials waited for investors to arrive. Representatives of Daewoo International were present but had not made a security deposit and hence could not bid. Nishat Mills group director Mahmood Akhter, whose interest had apparently prompted organisers to postpone the auction from August 23 to September 10, did not attend.
The Punjab Old Age Benefits Institute (POBI) was the only company to make a security deposit (of Rs100 million) ahead of the auction, but was unable to bid since there was no competition. Under LDA rules, an auction requires at least two bidders. The Institute later withdrew its deposit.
LDA Director General Abdul Jabbar Shaheen was present in the Muslim Town community centre while the auction was being held, but never left his room. Other LDA officials refused to comment. They did not say if or when the auction would be held again.
POBI representatives said that they were disappointed that they had been unable to bid at the auction. They said they would take part in future auctions.
Daewoo spokesman Naeemullah told The Express Tribune that the company was interested in the superstore plot, but the price was too high and they had concerns about law and order in the country. He said that Daewoo had already invested Rs1 billion in the last year on developing bus terminals across the country.
He said Daewoo would be willing to buy the plot on a 20 per cent down payment and three-year repayment plan. It would then build the superstore and a bus terminal there. “It would be a major investment as the infrastructure would cost us millions,” he said.
Earlier, LDA officials had said they planned to use the revenue generated from the auction on other projects like the Model Town underpass on Ferozepur Road. They were not available to comment on how the auction’s failure would affect their plans.
Published in The Express Tribune, September 11th, 2011.
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Daewoo has political connections. That's the reason they have their bus terminal inside the city.