After TGIIC, now HMDA looks at land auction to generate revenue
Hyderabad Metropolitan Development Authority officials identifying key land banks; agencies invited to assist in raising funds through debt markets
Hyderabad: After the Telangana Industrial Infrastructure Corporation (TGIIC), the Hyderabad Metropolitan Development Authority (HMDA) is now planning to raise funds through issue of bonds, auction of plots and other means to execute different development works. In the past, the Congress had raised objections over sale of government lands, citing that such a move would leave the government without any land bank for establishing industrial parks and taking up other development works.
Taking a ‘U’ turn from its stand after coming to power, the Congress government is now exploring different means to generate revenue. To this effect, the HMDA has already invited agencies to assist in raising funds through debt markets.
The plan was to raise Rs 20,000 crore within 18 months. If the merchant banker is successful, the contract could be extended for another 12 months. The HMDA would have to pay commission for the merchant banker for raising funds as required.
With the Kancha Gachibowli land sale plan landing in controversy, the HMDA is now again initiating measures to auction plots. Already, officials are identifying key land banks and preparing reports for submitting to the government.
Annually, the HMDA gets revenue of nearly Rs 1500 crore through issue of layout approval permissions, building permissions, Occupancy Certificate etc. Now, plans are afoot to secure loans or raise funds through debt markets by opening escrow accounts. All these plans are being made to execute different projects, including the elevated corridors, developing green field radial roads, flyovers and others. Since the State government is cash-starved, HMDA is now being made to generate revenues for executing these projects.
The State government had planned to construct an elevated corridor from Secunderabad to Shamirpet covering 18 km and from Secunderabad to Dairy Farm road covering five km. Before commencing these works, a considerable amount would have to be earmarked for land and property acquisition. Considering all these challenges, the HMDA is working on raising Rs.20,000 crore through bonds.
Auction of developed plots is another option for HMDA. Buoyed with the success of auctioning open plots at Kokapet, which were quoted Rs.100 crore per acre in the past, the HMDA hopes to continue the similar practice. With the real estate slump in the State, officials are a bit vary over auctioning the plots. A section of officials opine that if the response from the market happens to be poor for the auction, it could further dent the State’s image.
