DLF alters plans, now seeks to build 500-acre township
MINT, The Wall Street Journal, February 2, 2009, page 7
With Tata Motors calling off its Singur project, and DLF’s proposed 4,840-acre township almost written off, real estate prices in Dankuni have crashed in the past few monthsRomita Datta Kolkata: DLF Ltd has proposed building a 500-acre township at Dankuni in the suburbs of Kolkata, abandoning plans to develop a 4,840-acre township in the same area, which was to be its biggest project in eastern India.
In July 2006, the West Bengal government had awarded the contract to build a 4,840-acre township in Dankuni in Hooghly district to DLF, which had offered a record price of Rs56 lakh an acre, or around Rs2,700 crore, and to spend up to Rs40,000 crore on building the township. The government, however, couldn’t acquire the land.
DLF’s new proposal comes as a face saver for the state government, said an official of West Bengal’s urban development department. “On the other hand, the (state) government’s inability to acquire land gave DLF the opportunity to wriggle out of the project… DLF would have certainly not paid Rs2,700 crore now,” added this official, who did not want to be identified because he isn’t authorized to speak to the media.
After the panchayat polls in May, in which the ruling Communist Party of India (Marxist), or CPM, and its allies suffered a major setback, the state’s urban development minister Asok Bhattacharya had formally announced that his government wouldn’t acquire the land forcibly in Dankuni even if it meant abandoning the project.
Confirming DLF’s new proposal, which was sent last week, Bhattacharya said the state government was willing to provide land for the smaller township that the real estate firm now wants to build. “DLF can have its 500-acre township, but we aren’t abandoning plans to build a bigger township there (in Dankuni). The real estate business seems to be in trouble…we will build an industrial township instead,” said Bhattacharya.
A DLF spokesperson said he wasn’t aware of his company’s new proposal to build a 500-acre township, and refused to offer any comment on the stalled Dankuni project.
Bhattacharya also said that DLF, which, in January 2007, had paid Rs270 crore, or 10% of the amount it had bid for the proposed township, has asked the government to return the money. The real estate firm has agreed to make an advance payment, albeit of smaller amount, for the 500 acres that it has now asked for, he said.
The price of land in Dankuni could go up again when DLF’s new proposal is made public. It had earlier shot up to Rs1.2 crore an acre because of DLF’s proposed township and the now abandoned small car factory that Tata Motors Ltd was building in Singur, which is barely a 20-minute drive from Dankuni.
Faced with stiff resistance to the acquisition of farmland in Singur, which, too, is in the Hooghly district, the state government had abandoned plans to forcibly procure land in Dankuni much before it was formally announced by the minister. Bhattacharya had decided to build consensus and buy land from farmers paying the market price, but the spurt in real estate prices in Dankuni put the state government in a spot.
With Tata Motors calling off its Singur project, and DLF’s proposed 4,840-acre township almost written off, real estate prices in Dankuni have crashed in the past few months.
A few months ago, district magistrate Neelam Meena estimated that land prices in Dankuni ranged from Rs11 lakh to Rs38 lakh an acre depending on productivity and the distance from NH2, the highway that connects Kolkata with northern India.
MINT, The Wall Street Journal, February 2, 2009, page 7
With Tata Motors calling off its Singur project, and DLF’s proposed 4,840-acre township almost written off, real estate prices in Dankuni have crashed in the past few monthsRomita Datta Kolkata: DLF Ltd has proposed building a 500-acre township at Dankuni in the suburbs of Kolkata, abandoning plans to develop a 4,840-acre township in the same area, which was to be its biggest project in eastern India.
In July 2006, the West Bengal government had awarded the contract to build a 4,840-acre township in Dankuni in Hooghly district to DLF, which had offered a record price of Rs56 lakh an acre, or around Rs2,700 crore, and to spend up to Rs40,000 crore on building the township. The government, however, couldn’t acquire the land.
DLF’s new proposal comes as a face saver for the state government, said an official of West Bengal’s urban development department. “On the other hand, the (state) government’s inability to acquire land gave DLF the opportunity to wriggle out of the project… DLF would have certainly not paid Rs2,700 crore now,” added this official, who did not want to be identified because he isn’t authorized to speak to the media.
After the panchayat polls in May, in which the ruling Communist Party of India (Marxist), or CPM, and its allies suffered a major setback, the state’s urban development minister Asok Bhattacharya had formally announced that his government wouldn’t acquire the land forcibly in Dankuni even if it meant abandoning the project.
Confirming DLF’s new proposal, which was sent last week, Bhattacharya said the state government was willing to provide land for the smaller township that the real estate firm now wants to build. “DLF can have its 500-acre township, but we aren’t abandoning plans to build a bigger township there (in Dankuni). The real estate business seems to be in trouble…we will build an industrial township instead,” said Bhattacharya.
A DLF spokesperson said he wasn’t aware of his company’s new proposal to build a 500-acre township, and refused to offer any comment on the stalled Dankuni project.
Bhattacharya also said that DLF, which, in January 2007, had paid Rs270 crore, or 10% of the amount it had bid for the proposed township, has asked the government to return the money. The real estate firm has agreed to make an advance payment, albeit of smaller amount, for the 500 acres that it has now asked for, he said.
The price of land in Dankuni could go up again when DLF’s new proposal is made public. It had earlier shot up to Rs1.2 crore an acre because of DLF’s proposed township and the now abandoned small car factory that Tata Motors Ltd was building in Singur, which is barely a 20-minute drive from Dankuni.
Faced with stiff resistance to the acquisition of farmland in Singur, which, too, is in the Hooghly district, the state government had abandoned plans to forcibly procure land in Dankuni much before it was formally announced by the minister. Bhattacharya had decided to build consensus and buy land from farmers paying the market price, but the spurt in real estate prices in Dankuni put the state government in a spot.
With Tata Motors calling off its Singur project, and DLF’s proposed 4,840-acre township almost written off, real estate prices in Dankuni have crashed in the past few months.
A few months ago, district magistrate Neelam Meena estimated that land prices in Dankuni ranged from Rs11 lakh to Rs38 lakh an acre depending on productivity and the distance from NH2, the highway that connects Kolkata with northern India.
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