The authority’s finance wing had earlier estimated it would generate Rs23 billion from the auction. PHOTO: FILE.
Bids totalling Rs8.7 billion received against 24 commercial plots were approved by the Capital Development Authority (CDA) board on Thursday.
A board meeting was held at CDA headquarters to accept or reject bids offered during the three-day auction held from November 18 to November 20.
The authority’s finance wing had earlier estimated it would generate Rs23 billion from the auction.
“Though the plots received relatively high bids, the authority’s expectations were not met,” said a member of the auction committee requesting anonymity.
To attract more investors from outside the capital, the CDA had provided a video conference facility for interested investors from Karachi and Lahore. However, over the three days, not even a single investor from the two cities entered a bid via the facility.
During the auction, the authority presented 56 commercial plots, 24 of which secured bids above the CDA’s reserve price. According to CDA sources, investors betrayed city managers’ expectations by offering low bids against priced plots, especially on the second and third days of the auction.
The precedent of high bids established by investors on the first day of the auction came crashing down on day three.
“As many as 15 commercial plots were either deferred or cancelled on the spot by the auction committee on the last day alone as the bids offered against them were below CDA’s reserve price,” the member said.
On the first day the authority had received bids worth Rs5.5 billion against six commercial plots, followed by Rs2.19 billion against 10 and around Rs1.1 billion against eight commercial plots on the last day.
The successful bidders will have to submit 25 per cent of the total premium amount for the plot upon issuance of acceptance letters, while the remaining 75 per cent will be paid in three equal instalments over the next year.
Published in The Express Tribune, November 22nd, 2013.
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