UNION GOVERNMENT TO RE-DEVELOP PROPERTIES

Friday, 15 May 2015

UNION GOVERNMENT TO RE-DEVELOP PROPERTIES

UNION GOVERNMENT TO RE-DEVELOP PROPERTIES

With the Union government planning to redevelop existing properties prime

locations in the two metros Mumbai and Delhi, the real estate firms here are set to experience another boom.

In partnership with private realty firms, the centre proposes to overcome shortage in office and residential spaces in these metros. It plans to demolish the existing single or two-storey buildings. In commercial and residential areas to build multistory structures and optimize the use of prime real estate in its possession. Real estate firms will gain from residential flats or commercial space in the redeveloped properties. They may also gain, from annuities, rental payments being considered by the government in lieu of undertaking construction, financing and risks involved with these projects.

The move will address to a great extent the problem of steep property prices in the urban centers.The problems of unaffordable housing prices can be effectively addressed by public-private partnership.With this, the government would be able to add one crore sq ft office space and 61,000 houses or flats in Mumbai. Another 43,000 flats would be made available for the Mumbai police. Similarly, 25 lakh sq ft office space and 34,000 houses would be developed in New Delhi to overcome shortage of residential space for the government officials, ever expanding list of former ministers, members of parliament and retired government personnel. Another 20,000 houses required for the Delhi Police would be constructed on the existing real estate held by the government agencies. The postal department also needs residential space.

The planning panel and ministries of urban development, railways, defense and finance are being consulted on this initiative. The ministries of defense and railways may not be part of the move to redevelop government properties. Though the three services army, air force and navy are in need of residential and office spaces, the ministry will execute its own plans, Excess land in cantonments would be utilized for this purpose.

Once the policy to redevelop the government properties is finalized, a biding process will be put in place to select the partners for the projects. A model concession agreement would set the normal and commercial terms under which the real estate majors will participate in these projects. The government will extend the re-development of its property in Bangalore ,Chennai,Hyderabad, Kolkata, Ahmadabad and Pune.

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