Over 50,000 acres of surplus land with India?s major ports could be leased out to real estate firms in the coming months, in a move which could boost land supply for housing in coastal cities like Mumbai, Kolkata and Kochi.
The shipping ministry has given in-principle approval to 12 major ports to lease surplus land to real estate companies for residential property development. Bidding route would be generally adopted for releasing the land, but in many cases, there could even be direct transfer supervised by an empowered committee, official sources told FE.
Excluding Port Blair for which records are not available, major port trusts in India own a combined 2.58 lakh acres. Out of this, 15-20% is not in use and could be termed surplus.
The identified land chunks could be leased out to developers for up to 99 years. Modalities regarding price and land portions to be leased out are being chalked out by the respective port trusts. Funds raised through land lease would be used for port development.
Ports are free to lease out land for up to 30 years without government permission. For longer leases, a go-ahead from an empowered committee comprising the shipping secretary, financial advisor to shipping ministry and a representative each from the department of expenditure and Planning Commission will be required, sources said.
The shipping ministry has permitted the Cochin Port Trust to lease land to developers for 60 years and is considering a similar application from the Kolkata Port. ?The Cochin Port had requested a longer lease period as developers were not interested in a 30-year lease. The avenue has been opened to allow the port to earn from the vast land bank,? a senior shipping ministry official told FE.
As per conservative estimates, an acre of Mumbai Port Trust land could command around Rs 500 crore, while in the Kolkata Port Trust area, the same area could fetch around Rs 50 crore. The Kolkata Port has got around 4,576 acres of land. Similarly, the Cochin Port Trust which has around 2,352 acres, could lease out the surplus land at an estimated price of Rs 35 crore per acre at current rates.
?It’s a great development. We would straightaway release land for residential construction. It would also help our employees as most of the residential properties within the port are in a poor condition. Some employees have already shifted to new houses,? a senior official of Jawaharlal Nehru Port Trust, Mumbai said.
In what may astound many observers, land could be released without bidding. ?Bidding to tenders is not possible for the entire land bank as developers may not be interested in far-flung areas of the port. But to reduce the possibility of corruption in the process, the ministry in collaboration with the port’s board would decide whether to issue tenders on a case-to-case basis,? another official of the ministry said.
?The government has given the much-needed freedom to major ports to decide on land use. All major ports would now need to prepare a land use plan and put their land bank to appropriate use,? said Rohit Chaturvedi of i-maritime Consultancy.
?The move will free up major land portions, which can go a long way in satiating the housing demand. For example, Kolkata Port Trust land is close to the central business district, giving housing in that area good connectivity to the heart of the city,? said Mayank Saksena, head of Kolkata vertical of real estate consultant Jones Lang LaSalle.