Private sector can now buy into Delhis govt colony revamp

Written by Rajat Arora | New Delhi | Updated: Feb 20 2014, 06:58am hrs
Govt colonyThe public-sector NBCC plans to rebuild government colonies in Kasturba Nagar, Netaji Nagar and Thyagraj Nagar in Delhi.
The plan to redevelop government colonies in the heart of Delhi is set to get a private-sector push. The National Building Construction Company (NBCC) has proposed that funds for redevelopment be mobilised from the corporate sector by undertaking to allot, on a freehold basis, 20% of the total residential space to be created to companies who pay up in advance.

The public-sector NBCC plans to rebuild government colonies in Kasturba Nagar, Netaji Nagar and Thyagraj Nagar in Delhi. A part of the commercial space could also be leased out to the corporates. Till now, the private sector has not been allowed in the redevelopment scheme.

The cost of redeveloping these colonies, which includes building 8,000 flats in the heart of Delhi, is estimated to be around R10,000 crore. After corporates take 20%, the rest of the flats would go to the governments quota for its officers.

NBCC chairman and managing director AK Mittal said: We have proposed to the ministry of urban development that the private sector should also be allowed to bid for flats and commercial space to meet fund requirements.

Currently, there are 3,000 government flats in the said colonies where most buildings are double-storeyed.

According to sources, the much-needed renovation will give the city a swankier look, besides unlocking a lot of prime real estate.

The multi-storey residential-cum-commercial complexes will be mini-townships with facilities like clubs, market areas, healthcare centres and schools.

NBCC expects to start work on the project in 18 months.

Earlier, too, the private sector was roped in for urban re-development in the capital. The first such project was the 2007 redevelopment of Moti Bagh near the upscale diplomatic enclave, which was funded by the R620-crore realised from the sale of 3 acres of government land on which the Leela Palace hotel in Chanakyapuri now stands.

The NBCC, which is already redeveloping East Kidwai Nagar near AIIMS in Delhi, had allowed only public sector units (PSUs) and ministries to bid for the commercial space and flats.

In East Kidwai Nagar, the commercial space and 10% of residential space were reserved for PSUs and ministries, but for future projects, we have proposed to allow participation of private sector as well and increasing the limit to 20-30%, Mittal said.

The 86-acre East Kidwai Nagar project, which is being redeveloped at a cost of R5,000 crore, has signalled the success of similar projects.

Almost 60% of the space has already been booked by PSUs and government departments such as EPFO, Sebi, NMDC, Punjab and Sind Bank, IDBI, NHPC, IndianOil, the Chhattisgarh government and Oriental Insurance. The largest space has been booked by EPFO, of around 2.11 lakh sq ft commercial area and 1 lakh sq ft residential area for R790 crore.