The costliest land deal of the country is coming unstuck. BPTP, the Faridabad-based developer,

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which clinched a 95-acre plot in Noida with a winning bid of Rs 5,006 crore in March last year, doesn’t have that kind of money and wants to return it to the government.

The company has written to the Noida Authority, saying it wants to surrender the plot in Sector 94 of the industrial- cum- residential township. BPTP is now awaiting a decision of the authority, Sudhanshu Tripathi, director of the company told Financial Chronicle.

It is making good use of a recent policy of the Uttar Pradesh government that allows developers to return land with certain costs. In the process, however, BPTP will lose Rs 123 of about Rs 1,250 crore that it has paid so far, according to an official of the Noida Authority.

In view of the economic slowdown, the state government recently gave a breather to cash- starved developers who won land bids, allowing them to either reschedule their payment plans or surrender the land. If a developer surrenders land, he forfeits 10 per cent of the money he has already paid. For the balance 90 per cent, he can get alternative land.

The Noida Authority official said an alternative plot of 21.5 acres in Sector 94 might be offered to the developer.

Payments for the plot were problematic for BPTP right from the start. It had to seek a 60-day extension to pay even the first instalment. At that time, a BPTP executive had asserted it would pay the full amount on time. However, the company soon began selling bits and pieces of its capital to investment banks to raise money. It sold 3 per cent to JP Morgan Chase for Rs 250 crore and 5.89 per cent to Citi Property Investment (the real estate investment arm of the now troubled Citigroup) for Rs 322.50 crore.

It even tried to hive off the Noida project into a separate company and scouted for an equity partner. It had had talks with an American private equity firm but the global economic crisis played spoilsport.

The land deal had catapulted the little known BPTP into national limelight. It had pipped realty giants DLF, Ansals and Omaxe to win the bid. DLF’s bid was Rs 1,17,000 per sq metre and Omaxe’s Rs 80,100. BPTP walked away with the plot with a winning bid of Rs 1,30,000 per sq metre. Ansals were disqualified on technical grounds.

On the 95- acre plot, the developer was allowed to construct about 14 million sq ft of space, including 4 million sq ft for retail space, four hotels and service apartments. The total cost of construction for the project was estimated at Rs 4,500 crore.