LORD OF THE LAND: STATE BETS ON A REALTY CHEQUE ……..Girish Kuber MUMBAI
ITS an initiative that could lead to a facelift for Malabar Hill, Mumbais toniest address, as well as Nariman Point and other areas in South Mumbai. The city collector has proposed to free government-owned land, which is currently locked in lease agreements, by selling it at market rates.
However, a section of the state administration feels that conditions in the realty market may upset the governments dreams of generating several thousand crores of rupees by selling these properties.
The state is sitting on vast tracts of land in one of the most expensive real estate markets in the country. These properties, in many cases, have become a liability for the state, since it earns paltry revenue from them. Most of these properties are locked in lease agreements.
We earn around Rs 20 crore from 955 land leases in Cuffe Parade and Churchgate and Rs 25 crore from Backbay Reclamation and Nariman Point. Most of these lease agreements are over. Instead of renewing them, we would want the government to consider outright sale of these properties, Mumbai district collector IA Kundan told ET.
OF the 955 land lease agreements in Cuffe Parade, Churchgate and Marine Drive, 458 agreements ended long ago. In the Backbay area, where the business district of Nariman Point is located, more than half of the 316 lease agreements have expired. Some of these agreements were signed for 99 years. The rent the state government receives from these properties is ridiculously low, Ms Kundan said.
Realty slowdown may hit states sale plan
OF the 955 land lease agreements in Cuffe Parade, Churchgate and Marine Drive, 458 agreements ended long ago. In the Backbay area, where the business district of Nariman Point is located, more than half of the 316 lease agreements have expired. Some of these agreements were signed for 99 years. The rent the state government receives from these properties is ridiculously low, Ms Kundan said.
The Maharashtra government had, in 1999, proposed to free itself from these lease agreements, but its plan to sell the properties landed in court. Now the issue has been settled, and the revenue ministry has asked the city collector to put up a formal proposal to sell the leased properties. Accordingly, we have submitted our plan. This will now be discussed by the state cabinet, she said.
Top government sources ET spoke to overwhelmingly supported the idea, but feared that the slowdown in the real estate market may block its execution. It makes sense for the government to make the best of its real estate. But the timing certainly is an issue, an official said. We will have to wait till things begin to look bright.
Senior officials at Mantralaya are also concerned about the likely political fallout.
Government land sale is invariably followed by allegations of kickbacks and favouritism. We can hardly afford them when Assembly elections are hardly a year away, said a high-ranking state government functionary.