For the Greater Mohali Area Development Authority (GMADA), it was a quick transition from excitement to despair when the earnest money for participating in the auction was deposited by just one bidder till noon, the scheduled time.

Expecting more bidders to turn up, GMADA postponed the auction till 2 pm. When the auction finally took off, it was the LIC again, upgrading its own bid from Rs 1,00,001 per square yard to Rs 1,00,025 per square yard — after it was told by GMADA officials that the bid amount should at least be in multiples of 25.

As for the GMADA, the realisation that it was as good as it could get sank in fast. Though evasive earlier, its officials soon called a hurried press conference and justified their decision of not postponing the auction, an option available when a minimum of three bidders do not participate in the auction. “The auction has set a new benchmark for the area. Since the LIC is ready to pay our price and we need the money in the near future, the government has decided to go ahead with the auction,” GMADA Chief Administrator V P Singh said.

The recent debacle at a Panchkula auction for an eight-acre hotel site was a ready reckoner. “They had no takers at even Rs 68,000 per sq yd. We have at least got the price we demanded,” a GMADA official said.

Though many realty bigwigs, such as Reliance, Ansals and TDI attended the auction, they refrained from participating in the bid terming the reserve price of Rs 1 lakh per square yard as “grossly steep”. Interestingly, many of them had even shown their demand drafts for earnest money to the GMADA, to be able to participate in the bidding in case the reserve price was slashed on account of no bidders.

“When the land nearby is available for a maximum of Rs 2 crore per acre, and after adding up external development charges, license fee and change of land use it goes to a maximum of Rs 8 to 10 crore per acre, why will someone shell out more than four times the price for this land,” said officials of the TDI present at the auction site.