01:03
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Two new teams will be added to the lucrative Indian Premier League (IPL) on Sunday when the bids are opened in Chennai.
The new franchise owners will be able to field their teams from the fourth IPL next year.
The new teams were to be decided on March 7, but due to lukewarm response to the original invitation to tender (ITT), the IPL governing council decided to re-tender by diluting the monetary stipulations for bidders.
Even now, the number of prospective bidders is not likely to increase, despite the recession having receded. A source in the Board of Control for Cricket in India (BCCI) said that the ITT documents have been bought by only a few parties. "Only five parties have deposited their bids so far, but they still have time. The bids will be collected till 10 am and they will be opened at 11 am on Sunday in Chennai," said the source. Earlier, only two parties had bid for the two teams while the third bid had reached the BCCI headquarters in Mumbai after the deadline.
Unreasonably high bank guarantee money and the base price were said to be the main reasons for the lukewarm response.
The cities eligible for inviting bids are Ahmedabad, Nagpur, Kanpur, Dharamsala, Indore, Cuttack, Gwalior and Visakhapatnam.
Additionally, Rajkot and Pune, with stadium already under construction, and Baroda and Kochi, which will be constructing new stadiums, will also be eligible according to the BCCI. However, the source said that a few cities are already out of contention as there are virtually no parties backing them. " There is almost zero chance for Nagpur and Kanpur as so far there are no backers for these cities," he said.
Baidyanath, one of the oldest pharmaceutical companies specializing in ayurvedic medicines; Bapuna Group, specializing in liquor manufacturing; and Neco Group of Industries, which have a strong presence in Nagpur, were believed to be interested in the ' Orange City'. Kanpur and Ahmedabad were the first names to be floated. A London- based party was reportedly interested in the biggest industrial city in Uttar Pradesh, but it later backed out. Even a chewing tobacco manufacturer was said to be keen, but he too has backed out.
According to the earlier bid conditions, only companies or consortiums with a net worth of $ 1 billion and a bank guarantee of $ 100 million were eligible to bid. "In the new process, the winnings bids will be expected to pay a $ 10 million guarantee before the tender documents are opened, and then pay 10 percent of their bid within 48 hours in the event of a successful bid," said the BCCI. The board also said that the base price for each new franchise will be $ 225 million.
Experts feel that by removing the stipulation of an exorbitant advance guarantee, the two new teams are likely fetch more money for IPL - a brainchild of Lalit Modi but owned by the BCCI. " Now, with the diluted monetary stipulations, the final amount at which the teams would be auctioned could be much more than it would have been earlier (March 7, when the initial bids were to be opened)," said an expert.
The eight IPL franchise owners bought the teams at an auction in January 2008. Mumbai Indians emerged as the most expensive team with Mukesh Ambani's Reliance Industries paying $ 111.9 million to buy the franchise.
Minister of state for external affairs Shashi Tharoor was reported to be interested in bidding for Kochi. But his OSD Jacob Joseph clarified that the minister was not financially involved in the bidding. " He is in this purely for the love of Kerala and the love of cricket," said Joseph, who is in Chennai on behalf of Tharoor for the bidding.
Businessmen from the Gulf are not involved, the OSD added.
"Reports of Tharoor backing an Uttar Pradesh- based industrial house in the bid are false. He is backing businessmen from Kerala, who are either based in the state or elsewhere in the country," said Joseph. "There are industrial groups in Kerala like the Muthoot Group which support other teams because we don't have our own team. We don't want to be the only state in south India which doesn't have an IPL team. Getting our own team would also be a boost for tourism for the state."
The new franchise owners will be able to field their teams from the fourth IPL next year.
The new teams were to be decided on March 7, but due to lukewarm response to the original invitation to tender (ITT), the IPL governing council decided to re-tender by diluting the monetary stipulations for bidders.
Even now, the number of prospective bidders is not likely to increase, despite the recession having receded. A source in the Board of Control for Cricket in India (BCCI) said that the ITT documents have been bought by only a few parties. "Only five parties have deposited their bids so far, but they still have time. The bids will be collected till 10 am and they will be opened at 11 am on Sunday in Chennai," said the source. Earlier, only two parties had bid for the two teams while the third bid had reached the BCCI headquarters in Mumbai after the deadline.
Unreasonably high bank guarantee money and the base price were said to be the main reasons for the lukewarm response.
The cities eligible for inviting bids are Ahmedabad, Nagpur, Kanpur, Dharamsala, Indore, Cuttack, Gwalior and Visakhapatnam.
Additionally, Rajkot and Pune, with stadium already under construction, and Baroda and Kochi, which will be constructing new stadiums, will also be eligible according to the BCCI. However, the source said that a few cities are already out of contention as there are virtually no parties backing them. " There is almost zero chance for Nagpur and Kanpur as so far there are no backers for these cities," he said.
Baidyanath, one of the oldest pharmaceutical companies specializing in ayurvedic medicines; Bapuna Group, specializing in liquor manufacturing; and Neco Group of Industries, which have a strong presence in Nagpur, were believed to be interested in the ' Orange City'. Kanpur and Ahmedabad were the first names to be floated. A London- based party was reportedly interested in the biggest industrial city in Uttar Pradesh, but it later backed out. Even a chewing tobacco manufacturer was said to be keen, but he too has backed out.
According to the earlier bid conditions, only companies or consortiums with a net worth of $ 1 billion and a bank guarantee of $ 100 million were eligible to bid. "In the new process, the winnings bids will be expected to pay a $ 10 million guarantee before the tender documents are opened, and then pay 10 percent of their bid within 48 hours in the event of a successful bid," said the BCCI. The board also said that the base price for each new franchise will be $ 225 million.
Experts feel that by removing the stipulation of an exorbitant advance guarantee, the two new teams are likely fetch more money for IPL - a brainchild of Lalit Modi but owned by the BCCI. " Now, with the diluted monetary stipulations, the final amount at which the teams would be auctioned could be much more than it would have been earlier (March 7, when the initial bids were to be opened)," said an expert.
The eight IPL franchise owners bought the teams at an auction in January 2008. Mumbai Indians emerged as the most expensive team with Mukesh Ambani's Reliance Industries paying $ 111.9 million to buy the franchise.
Minister of state for external affairs Shashi Tharoor was reported to be interested in bidding for Kochi. But his OSD Jacob Joseph clarified that the minister was not financially involved in the bidding. " He is in this purely for the love of Kerala and the love of cricket," said Joseph, who is in Chennai on behalf of Tharoor for the bidding.
Businessmen from the Gulf are not involved, the OSD added.
"Reports of Tharoor backing an Uttar Pradesh- based industrial house in the bid are false. He is backing businessmen from Kerala, who are either based in the state or elsewhere in the country," said Joseph. "There are industrial groups in Kerala like the Muthoot Group which support other teams because we don't have our own team. We don't want to be the only state in south India which doesn't have an IPL team. Getting our own team would also be a boost for tourism for the state."
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