The lack of basic amenities such as power and water in this much-vaunted township project in Kolkata has caused new unit sales to plummet.
Sangeeta Das, can't stop lamenting her fate since she came to reside at New Town, Rajarhat—eastern suburb of Kolkata, an up and coming satellite city that is an hour by car from downtown Kolkota.
Das who shifted to her new two -bedroom apartment in November 2010, says that her life needs a divine connection to help her sort out the mess that the water, power and transport connection problems have posed her. Das is not alone, Most of the residents of Rajarhat who had bought properties here have been facing problems with their basic necessities.
It seems like a cruel joke that a much ballyhooed project under the aegis of the Left Front government which was supposed to bring relief to congested Kolkata—and act as an alternative to the Salt Lake area prized by corporates—has no basic amenities such as power or water which even many South Asian slums have.
With ample land available for development, this satellite township spread across 3,075 hectares has been witnessing maximum project launches as compared to any other part of the city. But launches alone are nothing to get giddy about as vacancy levels in both residential and commercial segments have plummeted. Seventy per cent of the area in Rajarhat is dominated by the residential segment and rest by commercial office complex.
Pankaj Kapoor, Founder and chairman, Liases Foras, says that “sales has seen a dip as only 917 units were sold in the last quarter out of 6,546 units. This, despite Kolkata having 21 months of inventory as compared to 36 months lying in the slowdown-hit territory Mumbai.”
Commercial spaces have fared no better in Rajarhat. According to data available from international property consultants, Jones Lang LaSalle India, Rajarhat vacancy levels rose from 29.4 per cent in first quarter of this year to 35 per cent in second quarter of this year, due to a supply influx of 0.5 million sq ft. The precinct posted an operational stock of about 4.6 million sq ft at the end-2Q11. Commercial real estate prices in Rajarhat, however, haven’t changed much.
Says Jitendra Khaitan, managing director of Pioneer Properties, a real estate consultancy, “Projects in this township are coming in bits and pieces as government has launched projects in every part of the city. The present selling rate of residential apartment ranges between Rs 3,000 to Rs 4,500 per sq ft. For commercial space the price tag varies between Rs 3,500 to Rs 4,500 per sq ft.”
However, truth is in last six months developers have focused on launching mid-segment and affordable housing projects in the price range of Rs 1,900-3,000 per sft as larger units simply aren’t experiencing traction.
Rajarhat’s origins lie with the West Bengal Housing Infrastructure Development Corporation Ltd (HIDCO), which as a Government company in April, 1999 was given the immediate focus to develop a planned township called Newtown, Rajarhat. The project was the posterboy of the erstwhile Left front government and was able to pull the largest developers in the country, including DLF and Unitech from the north, Puravankara from Bangalore and local biggies like Ambuja Realty.
However, things got so bad that a basic power as well as water connection to the area hasn’t been available for five years. Some say that the power problem arose because land losers didn’t want to part with the 225 sq ft required to erect a transmission tower. Now however, developers chipped in and restored power for the first time since the project’s inception.
HIDCO has now also finally come up with its plan of action for a water connection—building a pipeline from the Hooghly river to Rajarhat and undertaken by Public Health Engineering (PHE) department. But this will take another two years apparently before final results are on display. Debashish Sen, Chairman, HIDCO says, “Water is not a problem we have made a provision of Rs 200 crore for water supply connection. The construction on the project will begin soon.”
Sen claims that Rajarhat has good roads, but travelling on the stretch, with its innumerable pot holes, refutes that assertion. The problem is the area is going to witness maximum number of ready properties in the city soon. According to international property consultants, Knight Frank, 2,771 properties would be ready for delivery by January, 2013, 33 per cent of the entire delivery in the city.
Yet curiously, most developers don’t or—or can’t—seem fazed by the state of affairs, despite having to, for the first time in their existence, provide basic amenities like water or power to the communities that they have created for lack of any other option. Listening to Harshvardhan Neotia, Chairman, Ambuja Realty, you would get the impression that people are clawing each other to move into Rajarhat, “My sen se would be that there must be a resale demand. We have our commercial project called Ecospace and we have leased out 90 per cent of our portion and the RMZ site which we bought last month, we have started marketing the project. We have received fair amount of enquiries,” he says. And what of the infrastructure problems? “Rajarhat did face a challenge of infrastructure and electricity but that has been resolved. The connection to the power grid has been done and now there is no problem of electricity. The infrastructure is gradually going there but it will take some time,” he adds.
Similarly, Sen of HIDCO, says, “I do not agree that there is a recession in demand. We have recently allotted 50 acres to software giant Infosys which has been fully paid for. We are in the process of allotting land to Wipro. We have top class infrastructure and dedicated power companies. Also we have one of the best roads in town.” According to Sen, contrary to the perception that Rajarhat is facing a slowdown, Hidco has recently received 30 responses each for its two 2 acre each health care project. “We are going to launch another set of plots and the decision on the health care land allotment will be done soon,” adds Sen.
Unitech, the Delhi based realty company, promoted by the Chandra family, is similarly buoyant and refutes that it has witnessed a drop in sales. “Unitech has three projects at Rajarhat which includes a 100 acres residential project where we have given possession of 2.6 million sq ft. We also have a 45 acres IT SEZ where we have completed 1.9 million sq ft. The demand for residential accommodation has increased in our project Uniworld City due to the IT Infospace. Our hotel is under construction.” Yet, according to the data available from Unitech Corporate Parks (UCP), the AIM listed company where Unitech holds 40 per cent interest, it has a leased area operational of 1.64 million sq ft and it has total committed leases of 1.20 million sq ft, which means that the company is experiencing a short fall of 27per cent, contrary to the position it has taken.
Discrepancies in the promoters versions and the resident’s experiences aside, are there any possible solutions to the Rajarhat quagmire?
Vishal Khetawat, spokesperson of local realty firm, Rameswara Group, thinks there may just be a way out “These issues require active participation of the government and other government bodies to bring up a permanent solution. Various organisations are proposing for public private partnership (PPP) model, to combat these problems.”
Meanwhile, some developers are optimistic about the potential for the area. “There are minor issues of water, power and drainage initially but it is a vast area which is being developed. Though the city has seen a drop in launches, a few projects are in pipeline and in next two-three years time line it will become an ideal location for development,” says Khaitan.
For many living in the area today, this will most probably come off as yet another hollow promise in an urban nightmare.
