Kozhikode KSRTC terminal: KTDFC plans re-tender after Rs 87 Crore loss in 5 years

Kozhikode (Kerala): Plans are underway to re-auction the KSRTC terminal on Mavoor Road after excluding the existing contractor, Alif Builders.

Before the High Court, Alif Builders admitted that the complex was not under their full possession as only three floors had been officially handed over to them. Evaluating that the court's verdict favours their position, the Kerala Transport Development Finance Corporation (KTDFC) is considering issuing fresh tenders to re-auction the property.

Under the current proposal, KTDFC will directly fund the Rs 6.50-crore structural repairs as recommended by experts from the Barton Hill Government Engineering College, Thiruvananthapuram.

Consequently, the Transport Department has maintained that the government should not repair the complex at public expense only to hand it back to Alif Builders. A final decision will be taken next week in a meeting led by the newly appointed Transport Department Secretary. The meeting was rescheduled following the transfer of the outgoing secretary.

As Alif Builders took possession of three floors and collected rent from them, they are required to pay KTDFC the rent accrued for these floors since August 2021. Alif Builders originally won the auction for the terminal on a non-refundable deposit of Rs 17 crore and a monthly rent of Rs 43 lakh. Including the deposit and stamp duty, Alif Builders has invested Rs 21 crore in the project. However, if a re-auction is initiated, the firm is likely to challenge the decision in court.

The government has already incurred a loss of Rs 87 crore over the past five years, and any further legal delays from a re-auction could escalate the state's financial burden.

The terminal was originally leased to Alif Builders at a rate of Rs 30 per square foot, whereas current commercial rates on Mavoor Road range between Rs 70 and Rs 100 per square foot. KTDFC expects to secure higher rental revenues by executing a fresh auction once structural repairs are completed.

Construction of the KSRTC terminal was finished in 2015 at a cost of Rs 74.79 crore, but it was leased to Alif Builders six years later in 2021. Despite heavy capital expenditure, the state government has generated no revenue from the complex to date. The structural defects in the building were first highlighted by IIT Madras, which originally recommended repairs costing Rs 32 crore, before a third expert committee revised the required repair estimate down to Rs 6.50 crore.