After 12 years, MHADA ready for e-auction of shops

After more than a decadelong delay, finally, the Maharashtra Housing and Area Development Authority (MHADA) is ready to conduct an e-auction of commercial shops in upcoming months, along with its affordable housing lottery, which is expected to be announced by Diwali. A senior MHADA official, on request of confidentiality, said the housing lottery and commercial shops' auction would be held separately.

Further, he stated they had called for Expression of Interest (EoI) from all nationalised, scheduled and commercial banks with regard to a one-roof solution for e-auctioning of shops. "Kotak Mahindra Bank has won the bid. They will provide a complete solution, including separate software for e-auction, easy payment gateway, bidding process and other important procedures, all of which will be carried out by them. MHADA also stands to profit as Kotak has agreed to pay Rs 1,561 to MHADA per bidder or applicant. For instance, if a shop is priced at Rs 40 lakh and if there are 50 bidders for it, then MHADA will earn Rs 1,561 for every bidder," said the official.

When asked how Kotak stood to gain from the process, the official said, "The bidder has to deposit 10 per cent of the shop value as Earnest Deposit Money (EDM) in the selected bank to participate in the process. Therefore, if the shop value is Rs 40 lakh, the bidder has to deposit Rs 4 lakh in the bank. So the bank can earn interest from those deposits."

To proceed with the e-auction idea, a final meeting was held by the MHADA's overseeing committee, comprising retired judges, bureacrats and officials from the Indian Institute of Technology (IITBombay), Labour Commission and others retired officials of the Mumbai housing board. The official said, "Two meetings were held and some suggestions have been given by the committee and same has been escalated to the bank for compliance. Once the suggestions have adhered the e-auction will be held."

Around 108 commercial shops will be auctioned by MHADA. These shops are at Pratiksha Nagar, Sion, Mazgaon, Vinoba Bhave Nagar, Swadeshi Mill Kurla, Mankhurd, Tunga Powai, Gavanpada-Mulund, Majaswadi Jogeshwari, Shastri Nagar, Siddhartha Nagar, and Charkop Sector 1. "In 2006, MHADA sold commercial shops at affordable prices. Thereafter, in 2009, some five to six shops were sold. As in 2012, MHADA's housing lottery process went digital, it was decided to try the same for the commercial outlets. However, it did not work out," said the official.

Another MHADA official added, "If the e-auction is not held this time, the prices of these 108 commercial shops will increase, since maintenance costs are incurred on units till they are sold out and this cost is passed along to the buyer."