Wednesday, January 01, 2014

World Bank recipe for urban infrastructure: Sell off public land, collect Rs 54,000 crore in Ahmedabad

By Rajiv Shah
The World Bank has advised the Gujarat government to begin raising resources for building urban infrastructure in major cities by selling off public land to private developers. In a recent policy research study, “Inventory of Public Land in Ahmedabad, Gujarat, India”, it has said in Ahmedabad alone huge financial resources “could be generated by monetizing public land” to the tune of Rs 54,000 crore which implies per capita availability of fiscal resources amounting to Rs 97,000. This is double the amount estimated by the state government’s High Powered Expert Committee (HPEC) at 2009-10 prices – Rs 43,386 “for the entire range of physical urban infrastructure for the next twenty years”.
Though it does not say so, the study implies, it would mean, even the metro transport facility, costing Rs 22,000 crore, could be triggered by this method. Carried out by a group of scholar, Shirley Ballaney, Marie-Agnes Bertaud, Patricia Clarke Annez, Bindu Nair, Bimal Patel, Vidyadhar Phatak and Vasudha Thawakar, and a celebrated ex-bureaucrat, CK Koshy, the study says, the huge amount that could be raised is in sharp contrast to the Ahmedabad Municipal Corporation’s City Development Plan under Jawaharlal Nehru National Urban Renewal Mission (JnNURM), under which the “capital investment needs projected in the plan for a seven-year period were about Rs 9,000 crore.”
The study claims to “clearly demonstrate that monetizing public land could significantly contribute to investments in infrastructure and other high priority government goals”, adding, the model could be replicated in other major urban centres, too. Insisting that “unlocking the value of public land has been recognized as a potentially highly significant source of finance for urban infrastructure”, the authors underline, for all this, there is no need to vacate the slum areas, which are usually made the target for developing public land.
The study emphasises, “Though it might be possible to realize the value of public land in selected cases by relocating slums, in practice it would not to be desirable. Indeed the slums provide an important share of located well-low-income housing that would be very difficult to replace. Moreover, slums on public land occupy a very small portion of public land under study, only 4 percent. Yet they house close to 4,00,000 people or 20 percent of the total estimated population in slums and chawls in Ahmedabad.”
Indicating the need to revalue land in order to bring in the necessary resources for infrastructure, the study says, the Jantri rates, which are used by “government authorities for the purposes of stamp duty levied at the time of transaction in land or property”, are do not tell the real value of the public land. It says, “The Jantri rates are known to be lower than the real market values.” Giving examples of different parts of Ahmedabad, the study says, the difference between Jantri rate and market value has a deviation factor of anywhere between 1.33 (Gota) to 4.64 (Sola). In Sola’s TP scheme No 43, the Jantri rate is Rs 14,000 per sq metre, while the market rate is Rs 65,000.
The study says,” The land values using Jantri and market rates vary greatly, between Rs 1,650 to Rs.54,500 per square meter and Rs. 2750 to Rs. 100,000 per square meter. It adds, “The most valuable parcels are along the bank of the Sabarmati River called “Riverfront”, where the land was evaluated at Rs 54,500 per m2 by Jantri rate and Rs 100,000 per m2 by Market rate.” Suggesting the land prices may further rise, the study says, “The Metro Lines (Phases 1 and 2), not immediately planned, in the Western part of Ahmedabad, may have some impact on land values in the future. The areas more affected will be the former Greenbelt area localized next the Phase 2 Metro corridor.”
Jantri rate vs market rate in Ahmedabad
The study is based an on-the-spot assessment of 6,850 hectares (ha) of public land, out of which close to 52% is not marketable, 21% is vacant land and 31% is developed with construction at different levels of consumed floor space index (FSI). “Vacant land including TPS appropriations represents 20.73% of the total public land and 43% of the total Potentially Marketable Land”, it points out.
Wanting the government authorities to come up with “new valuations” for marketable land, the study says, “Revising land use and FSI regulations in the context of raising resources for infrastructure investments through monetizing public land after due public consultation and consideration of environmental and social issues could be a sound policy.” It regrets, “Oftentimes public land is identified as surplus precisely because the current use is out of date.”
The study wants the authorities to overcome a major hurdle – of multiple ownership of public land. “Although Central Government, State Government and the Ahmedabad Municipal Corporation are identified as the three land-owning public agencies, within each of these there are many authorities that are in possession of land and decide use of land. Within Central Government, the Ministry of Defense is involved in case of Cantonment; the Ministry of Civil Aviation is involved in Airport etc.”
It adds, “In case of State Government too there are various departments such as Food and Civil Supplies Department in case of warehouses for food grains, the HomeDepartment for police stations and police housing, jails and narcotics stores etc. Each of these authorities possesses this land without any compulsion or obligation for optimal utilization of the land. Consequently data are not readily available to develop well informed policies and programs for monetizing excess land and adapting public use to current needs.”

No comments: