IPL defers unveiling two new franchises, cancels existing tender

At the instance of Shashank Manohar, President, Board of Control for Cricket in India (BCCI) and unanimous approval of the DLF-IPL Governing Council thereafter, the Invitation to Tender (ITT) to ascertain the two new franchises from season IV 2011 was cancelled here on Sunday.

While the senior functionaries of the BCCI and the IPL had resolved to set the reserve price at $ 225 million as one of the crucial clauses in the tender document, they were not privy to the three binding financial obligations the bidders had to comply with.

Sources revealed that at the IPL Governing Council meeting, at the Four Seasons Hotel, an upset Mr. Manohar expressed resentment at the unilateral decision of the people who specified the stiff clauses in the ITT, namely the clause requiring the potential franchisee to demonstrate a net worth of $1 billion, the bidder to pay an advance guarantee of $100 million and also provide a rolling bank guarantee for the sum of the winning bid.

Sahara unhappy

It appears that Sahara, which has been associated with the BCCI for more than a decade as the Indian team’s sponsor, expressed its unhappiness and raised the issue with the BCCI.

Those witness to the proceedings at the Governing Council meeting said Mr. Manohar was keen on a wider participation to identify the two new franchises. He proposed that the ITT be scrapped altogether and the bids not opened.

“He expressed indignation at the clause which stated that the bidders provide proof of their net worth being $1 billion and also the clause that required the bidders to furnish an advance bank guarantee of $100 million,” said an IPL official.

After the Governing Council meeting, Lalit Modi announced that three primary clauses in the ITT have been dropped, a fresh ITT would be floated on March 9 and submitted at 10 a.m. on March 21 in Chennai.

The bids will be opened at 11 a.m. the same day in the presence of all the bidders. He also said the bidders would have to pay a performance deposit sum of $10 million 24 hours before the submission of the bid papers (on March 21) and 10 percent of their bid within 48 hours in the event of a successful bid. “The bids were not opened today. There were suggestions to increase the reserve price from $ 225 million. But we have retained it.

“Several parties had written to the BCCI that the financial commitments were high and hence the Governing Council decided to scrap the ITT because it had the right to cancel the entire tendering process at any stage prior to the execution by IPL of a binding franchise agreement with a potential franchisee without giving any reason or to amend, vary, waive and/or modify any or all of the terms and conditions of this ITT, including the franchise agreement,” said Mr. Modi.

Those who attended the Governing Council meeting were Shashank Manohar, N. Srinivasan, Secretary, BCCI, Chirayu Amin, Vice President, BCCI, Rajiv Shukla, Chairman of Media Committee, BCCI, Lalit Modi, Chairman and Commissioner, IPL, Niranjan Shah, Vice-Chairman, IPL, M.A.K. Pataudi, Sunil Gavaskar and Ravi Shastri.

Representatives of Videocon Industries, Adani Power and Jaypee Group were also present. “I had complied in full with ITT. I am disappointed that tendering process has been cancelled. But I have no grievances as such. I love cricket and I have played with Sunil Gavaskar. I had bid for Pune city and I will be at Chennai on March 21,” said Venugopal Dhoot, CMD, Videocon Group.