The India Post, Chandigarh, 19th December, 2008 : In recent times there have been certain media reports on Film City Project which have created certain misgivings and it is felt appropriate that details be brought to the public notice so that all facts and details are properly appreciated and interpretated in right perspective.
The Expressions of Interest (EOI) were invited from eligible bidders for setting up the MFC in 30 acres land at Sarangpur comprising the following 4 components:-
i) Multi Media cum Film Centre with digital studios and facilities for post production procvessing of digital film and also modern hi-tech facilities and gaming laboratories.
ii) Multimedia Park with ready built space for technology companies working in this field.
iii) Multimedia Informatuion cum Entertainment Centre which would have multiplex facilities and entertainment cum gaming facilities for visitors.
iv) Multimedia College with courses in Creative multimedia, Animation and Gaming as well as Research and Postgraduate programmes in Multimedia.
A total number of 20 bids were received out of which 6 bids were found to have fulfilled the eligibility criteria, as specified in the EOI.
It was clarified in the EOI that the land would be allotted to the highest bidder on lease for 99 years ( and not 33 years, as quoted in the news item). However, during the course of some internal deliberations, a proposal was also mooted to allot the project on revenue sharing model whereby the successful bidder would pay the Administration some percentage of the revenue accrued from the project on annual basis along with the fixed annual licence fee for a term of 33 years. This proposal was only part of internal deliberations, keeping in view the innovative and unpredictable nature of the project, which was being planned for the first time, Finally, it was decided to adopt the lease-hold model in view of the standard procedures and assured annual lease amount under the Chandigarh Lease Hold Rules, 1952, after having approval from the competent authority. These rules provide for lease hold rights for a period of 99 years. Under the lease rules, the successful bidder will be paying annual lease with increase after every 33 years in addition to the bid amount which was Rs.191 Crores in this case. Pre-bid discussions were held with all the eligible bidders before the lease-hold model was communicated to them. Request for Proposal (RFP)/document which contained the detailed terms and conditions for inviting the technical and financial bids for the project clearly stated that the land would be allotted on lease-hold basis for the project to the highest (technically qualified) bidder for a period of 99 years.
It has further been mis-interpreted that a budget (3 star) hotel was added at the last minute. This is incorrect. A budget hotel was part of the RFP document issued to all eligible bidders for the project and was to be part of the Entertainment Centre component out of the 4 components listed in the EOI. Therefore no change was made in the terms and conditions at the last minute at all. No proposal worth an amount of Rs.550 Crores was either received or even verbally mentioned by any bidder at any stage.
As regards the visit of 2 officers of the Administration to Malaysia is concerned, the same was undertaken to study the concept of the Malaysia Multimedia Super corridor which is the most successful project in Asia. The MSC combines world class infrastructure with a multimedia centric focus and the visit helped the Administration in the conceptualization of the whole project as key features of the MSC have been incorporated into the Multimedia Film city project.
The appointment of SBI Capital Markets Ltd (SBI Fincaps), as consultants was made as per norms. SBI Fincaps is a joint venture of State Bank of India, the Treasury Bank for the Government, They were engaged at a total expense of Rs 38 lacs for the 2 projects of the Amusement cum Theme Park and Multimedia Centre cum Film City and not for one single project, as interpretated in the news item. Their appointment was made as per norms as they had earlier worked for CHB and had the requisite expertise in preparation of RFP documents for such projects and other related works. Their domain experts were brought in from Mumbai by SBI FinCaps which is a joint venture of SBI, which is a Public Sector Bank owned by Government of India.
The practice of allowing sub lease is a normal business practice in such big integrated projects as the domain expertise in various fields for which the project has been conceptualized is never available with one Developer . In this case, since the project involved four components, which were significantly different from each other, apart from being new to the region, it was necessary to allow the sub lease by the selected Developer, and the same was based on the RFP. This provision has also been made in all other large projects approved in UT including commercial malls etc.
After the completion of the selection process, a Development Agreement was signed by Chandigarh Administration with Parsvnath Developers Limited on 01.03.2007 wherein the Developer paid Rs 47.75 Crores to the Administration. As per the Agreement the balance amount was to be paid within 90 days of the signing of the Agreement and the site was required to be developed within 36 months. However, due to problem relating to inter-state demarcation of site; non removal of 2 Power lines (owned by PSEB) till date and delay in removal of other encumberances, the Developer could not prepare the building plans and was not able to start the project , resulting in delay of 20 months. Now, the Developer has submitted an application for severing its ties from the project and the same is being examined.