Jet Airways may lose prime BKC plot

MMRDA says airline hasn't made payment even though enough extensions have been granted since it won bid for Rs 826-crore plot in 2008

Jet Airways may lose prime BKC plot

It seems Jet Airways will have to lose the plot at G-Block in BKC that it had won through bidding in an auction in 2008, as it has failed to make the full payment despite several extensions.

Jet-lagged: The Jet Airways’ 5,951-sq m plot at G-Block in BKC. The airline was supposed to complete the full payment within 60 days of the auction sale. Pic/Satyajit Desai

So far, the airline has paid only Rs 10 crore of the total plot cost of Rs 826 crore to the Mumbai Metropolitan Region Development Authority (MMRDA), which earns revenue through the sale of land in Bandra Kurla Complex.

“In the past, Jet Airways had requested us to give it time for making the final payment for the plot and we had accepted it, but now we have given it enough time,” Metropolitan Commissioner Rahul Asthana said. “As even now Jet has not made the remaining payment along with the interest, we will shortly be taking a decision to cancel the allotment.”

Jet Airways planned to construct its global headquarters on the BKC plot when it bid for it in 2008.

The plot, C-18 at G-Block, is considered a prime location in BKC. There are business houses like IDBI and NSE near the plot.

In January, the MMRDA had sent a letter to the state government asking it to cancel the allotment to Jet since the airline had not paid the remaining cost of the plot to the planning authority.

“As Jet Airways has still not made the remaining payment for the plot that it won, we sent a letter to the Chief Minster to take a final call on the issue and there are chances that the allotment will be cancelled,” a senior MMRDA official said on condition of anonymity.

The airline was supposed to complete the full payment of Rs 826 crore for the 5,951 square metres plot within 60 days of the auction sale.

After fulfilling the initial requirement of paying Rs 10 crore up front, the airline failed to pay the remainder despite several extensions given to it by the MMRDA.

The MMRDA even sent several reminders to Jet Airways, but failed to get the remaining sum from the airline.

While MMRDA joint project director Dilip Kawatkar said Jet had earlier this year requested the planning authority to grant an extension till September to make the payment, sources in the MMRDA said the plea was not considered.

According to MMRDA officials, the last extension granted to Jet expired in March 2011, and even then the authority had sent a letter to remind the airline of the remaining payment.

Even if Jet Airways is allowed to keep the plot, it will now have to pay over Rs 1,100 crore to the MMRDA since the planning authority will charge 14 per cent interest for the late payment.

“It’s been four years, but still Jet is yet to make the remaining payment, and now everything depends on the decision of the CM,” the MMRDA official said. “It is more likely than not that the allotment will be cancelled,” the senior MMRDA official said. “If Jet didn’t want to develop the plot and had returned it, we would have re-auctioned it and earned more revenue than what we will earn even if Jet pays up now.”u00a0

Jet Airways says
A Jet Airways spokesperson said: “Jet Airways is still in discussions with parties as regards the BKC property. Jet Airways has no intention of selling its property leased from the MMRDA.”

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