BMP set to ‘gift’ Gandhi Bazaar market

BMP set to ‘gift’ Gandhi Bazaar market
Monday August 7 2006 11:43 IST

BANGALORE: Even as the Bangalore Mahanagara Palike (BMP) has ordered total review of its joint venture (JV) policy, the civic body is on the verge of giving away Gandhi Bazaar in a JV for a pittance and the lease has no time frame.

According to the new JV, the Gandhi Bazaar Market would be converted into a ‘park and purchase’ commercial-cum-parking complex and BMP would get Rs 17.50 lakh a year from management of parking.

Interestingly, land prices in Gandhi Bazaar area are around Rs 5,000 a square foot while BMP estimates the cost of about 15,000 square feet of its land at Rs 1,721.60 a square foot. The muddled mathematics of BMP does not stop at that and the civic body revises the original cost of construction of Rs 1.70 crore to Rs 5 crore considering the current market rates. BMP fails to see its loss while it values developers benefit.

In effect, BMP plans to give away an asset worth Rs 7.5 crore to a developer for an investment of Rs 5 crore. BMP officials seem to have done plenty of inventive thinking to benefit the developer.

The JV is on a 50:50 revenue-sharing model. The developer’s half of benefits on the day of completion of the project would exceed Rs 6 crore going by the market rate of the land. The JV partner benefits on day one and the property is lost for good as there is no end date of the lease. And the civic body will lose an asset that would fetch more than Rs 7 crore even if it is auctioned.

For the record, the foundation stone for the project was laid last year while the proposal is pending with the government. BMP engineers had designed the project and the city fathers ‘adopted’ a resolution to implement it.