NEW DELHI: In a first-of-its-kind reform aimed at ending repeated cancellations of tenders due to single bids, the Delhi Development Authority (DDA) is set to adopt a new bidding method for disposing of land and high-value projects. The new system ‘the Swiss Challenge method ‘will guarantee DDA secures an amount higher than its reserve price in every case, whether the asset is disposed of through sale or long-term licence.
The move, recently approved by Lieutenant Governor VK Saxena will not only ensure fructification of the highest bidder tender at the earliest, but will also ensure that the DDA, under any circumstance, will get higher amount than the reserve price for the property it disposes, by way of sale or license fee mode.
The Swiss Challenge Method is a competitive bidding mechanism used for transparent disposal/allotment of land or public assets where a single bid is received and the same is placed in the public domain and competing bids are re-invited (or re-auctioned) with the single bid being the new reserve price which is more than the initial reserve price, with the original bidder also being given the right to participate in the re-auction.
The system ensures competitive price discovery while safeguarding the interest of the public authority from arbitrary or single-bid outcomes.
Described as a robust, transparent and revenue-maximising mechanism, the method aligns with DDA’s model request for proposal (RFP) structure for high-value, long-term licence projects of up to 55 years.
Officials said it protects the authority from delays, cost escalations and stalled projects often caused by single-bid scenarios. Meanwhile, the DDA recently approved the model RFP framework to ensure competitive bidding, accurate price discovery and maximisation of licence-fee revenue.
The Swiss Challenge mechanism will complement this framework by ensuring that tenders do not fail due to a lack of competition. Additionally, key advantages include avoidance of repeated tender failures, faster decision-making, protection against under-valuation, fair competition and flexibility to accept the best offer or allow the original bidder to match the highest counter-bid.
Major benefits of DDA’s new Method
Ends delays caused by single-bid tenders
Initial single bid becomes public and is treated as new reserve price
Counter-bids invited in a competitive process
Original bidder can join or match the highest offer
Ensures DDA always earns more than the reserve price
Approved by L-G VK Saxena
Aims for faster tender finalisation and transparent price discovery
Prevents repeated tender cancellations
Protects against under-valuation and stalled projects
Fits into DDA’s new model RFP for high-value, long-term (up to 55 years) licences
Helps maximise revenue