Bengal depts to unlock value of surplus land

The departments of the West Bengal government have taken steps to release the value of their surplus land holdings.

However, instead of going for a sale, the departments have decided to develop land either directly or in joint ventures with the private sector investors under the public-private partnership (PPP) model, says a highly-placed source in the state finance department.

The source claimed the Left Front government in the state was the first in the country to develop such a model for generating resources and eliminating the wastage associated with government departments.

The government policy envisaged retention of land ownership and generation of income from the redevelopment of surplus plots, putting an end to the present situation under which such plots were draining resources for maintenance.

For example, the state's refugee rehabilitation department has awarded a contract to a consortium of builders to develop 18 acres on Barrackpore Trunk Road, the artery of northern Kolkata.

"We will build over 25 lakh square feet, of which a little less than 5 lakh sq ft will be used to build flats of 645 sq ft each for the 800 refugee families residing in the complex. The rest will be shared between us and the government for commercial and residential use," said Indrajit De, chairman of the New York-based consortium of builders, Eden Realty Ventures, which is executing the project. Eden won the project through a competitive bidding process managed by external referees.

Another department that has recently entered into a couple of deals in this regard is the animal resources department, which has huge surplus land 30 km north of Kolkata, at Haringhata, and in north Bengal. Its deals are tripartite in nature, the other two participants being the developer and the state's information technology (IT) department.

The department has handed over the land for development and will gain built-up commercial space. "The IT department is now in a position to offer built-up space for as low as Rs 20 per sq ft at Siliguri, the gateway to the North-East India as a result of a PPP venture based on such redevelopment," said Siddharth, the IT secretary of West Bengal.

The development of land through the PPP route would help the department concerned to build a bank of commercial property which it could exploit to augment departmental income or to accommodate investors or business partners, the finance department source added.

The departments were being encouraged to undertake these initiatives so as to minimise the government's subsidy bill, the source said.

In the case of other departments like IT, the policy would lead to the creation of commercial property banks that could be used as incentives to attract investors with plug-and-play facilities, the source added.

The departments were owners of large tracts of land acquired in the past for welfare schemes, as distinct from land owned by state-owned commercial enterprises.

While most sick commercial enterprises were now under the industrial reconstruction department, the lands directly owned by the departments were grossly underutilised, despite being located in commercially developed areas or along commercially important highways and transport corridors, sources said.

The development model is being preferred to outright sale as it will maintain government ownership and yet convert these plots into viable commercial properties.

This process of releasing value from the government-owned land was separate from the ongoing effort of the government to sell or revive, through joint ventures, loss-making or closed state-owned public sector enterprises, like the 2005 sale of the Great Eastern Hotel.