MUMBAI (NNN-AGENCIES) -- The World Bank (WB) has suggested sale of excess public land in Indian cities, including Mumbai, to fund infrastructure projects.
The bank has collaborated with the India Development Foundation and the Public Private Infrastructure Advisory Facility and formed a steering committee headed by Vijay Kelkar, chairman of the 13th finance commission, to formulate a proposal on monetizing excess public land.
Early this month, the bank's country director Roberto Zagha Patricia Annez met stakeholders, town planners, urban experts and architects in Mumbai and sought their advice on safeguarding affected communities and transparency in transactions.
The bank's thinking is that land has always served as an instrument of urban infrastructure finance. It cited the example of Istanbul, where an abandoned municipal brewery and bus stand were sold for nearly US $2 billion (around Rs 9,000 crore), double the investment budget of that city.
A senior bureaucrat has dismissed the World Bank (WB)'s suggestion to sell excess public land in cities, including Mumbai, to fund infrastructure projects as a "bad proposition" and said it was "like selling the family silver".
Sources said Mumbai's experience of disposing of or redeveloping public properties has been mired in controversies and allegations of favouritism. The Mantralaya redevelopment plan, the proposal to sell Worli Dairy, the sale of BEST depots and the proposed redevelopment of the Bandra government colony raised eyebrows, and some of them have now been put on the backburner because of the controversies surrounding them.
However, a WB official told TOI that the bank is not pushing or asking the government to sell land.
"We are just sharing knowledge and providing various options. Finally, the Indian government has to decide what line it wants to take," he said. The official added that this suggestion is not tied to its funding of projects in the country. In the past few years, the MMRDA raised over Rs 10,000 crore from the sale of plots, mainly in the BKC.
"The committee recognizes that a strong governance framework is required to ensure that promoting a more strategic approach to re-disposition of excess public lands does not become a vehicle for abuse of power, but instead serves public and stakeholder interests and can sustain public support," said a note circulated by the WB representatives to urban experts.
"The informal steering committee is thus seeking the advice of urban practitioners familiar with the complexities and constraints of operating in this domain of urban real estate," it said.
"In India, the public sector is very active in land markets and is a major land owner in many cities.
Transactions where public lands are transferred to private owners or lessees are commonplace. Yet, the fiscal potential of these instruments for improving infrastructure has yet to be tapped," it said.
The paper added that it is also the "subject of considerable controversy and seen as abusive to the poor and uneducated who get caught up in these transactions".
Ex-MMRDA chief town planner and member of the steering committee V K Phatak said the finance commission too talked about optimal utilization of land, especially those belonging to public sector units. "But the policy cannot be purely guided by maximizing money out of land deals. One has to balance it with the requirements of the city," he said.
Former state secretary D M Sukhtankar, who attended the meeting with WB officials in the city, said it was a "brainstorming session" on how public land could be disposed of in a transparent manner rather than handing it over arbitrarily to somebody.
"Utilising public land to fund infrastructure is wrong and short-sighted. It may be beneficial to the owner, but if the property is developed without a proper land use plan, it will be disastrous for the city," he said.
Terming the policy myopic, Sukhtankar added that in the past, public land was sold to favoured parties on terms which were not conducive to competition.
Housing activist Chandrashekhar Prabhu said, "The WB has been trying to create a (favourable) opinion for sale of prime land in the city. This is in line with the thinking of certain sections in the government who want to hive off public properties. Fortunately, CM Prithviraj Chavan has put some of these plans on hold."
WB's George E Peterson, in his book, 'Unlocking land values to finance urban infrastructure', said land has long served as an instrument of urban infrastructure finance. For instance, New York financed its first public buildings, including a ferry terminal on the east river, through sale of water lots that included land frontage and water development rights.
In May 2007, a twoday auction of land in areas designated for new city development outside Cairo generated US $3.12 billion (around Rs 15,000 crore).
In the past decade, Bogota in Columbia financed 217 public works projects through "betterment taxation" levied on land value gains produced by projects. In China, land leasing paid for infrastructure investment. -- NNN-AGENCIES
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