Friday, September 26, 2008

BBMP all set to lose prime property

BBMP all set to lose prime property

Staff Reporter

BBMP has lost prime properties through similar PPP projects

Bangalore: The State Cabinet’s decision to award the contract to reconstruct the Bruhat Bangalore Mahanagara Palike (BBMP) housing quarters for Economically Weaker Sections (EWS) in Koramangala may have brought relief to the 8,000 residents of the complex. But it could mean that the BBMP could lose yet another piece of commercial property in a prime locality.

Though the BBMP’s intention is to provide good quality houses to the EWS residents who have been living under the constant fear of the building collapsing thanks to the substandard construction, the public-private-partnership (PPP) model that has been adopted to execute the project will definitely make the BBMP poorer by more than Rs. 200 crore. The current market value of the land is around Rs. 5,000 a square metre.

Last Thursday, the Cabinet gave a formal nod allowing Maverick Holdings and Investments to rebuild the EWS quarters under the PPP model on a built-own-operate-transfer (BOOT) basis. The proposal is to build 1,640 flats for the residents on seven of the 14-acres of land and the rest is to be used for commercial purposes jointly by the BBMP and the developer.

According to the deal, the developer will get 50 per cent (three and half acres) of the commercially exploited land. Though the BOOT agreement means that the developer has to build the flats and the commercial complex, operate and maintain it for 30 years and transfer it back to the BBMP, there is no hope that the civic body will get back the property going by the PPPs executed in the past.

The BBMP has lost prime properties in Langford Town adjacent to the Hockey Stadium, on Magrath Road and also on K.G. Road through similar PPP projects.

The BBMP, which developed a first ever joint venture with Shyamaraju and Company to build Divyashree Chambers on 88,660 sq.ft. of land, sold its stake to the developer at a throwaway price of Rs. 25 crore.

The agreement then was that the builder would develop the land by constructing a complex with two basement floors, ground floor and three floors. In return, the company was entitled to 60 per cent of the land and the building. But after some time, the BBMP sold its interests in the land and the building, which had an area of 1,92,235.3 sq. ft., to the builder at a throwaway price. The Government also allowed the builder to construct four more floors.

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