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The Mumbai Metropolitan Regional Development Authority (MMRDA) is set to lease two prime plots located in the Bandra-Kurla Complex (BKC), eyeing a potential income of approximately Rs 2,900 crore. The plots, labeled C-13 and C-19, have areas of 7,071.90 square meters and 6,096.67 square meters, respectively. Each plot comes with significant development potential: 45,000 square meters for C-13 and 40,000 square meters for C-19.
The authority's optimism follows its profitable leasing experience in October 2022, where it fetched Rs 2,067 crore from Goisu Realty Private Ltd, a Japanese firm. Goisu Realty successfully secured the leasing rights for two other land parcels within the same complex.
The leasing terms for both plots C-13 and C-19 include an 80-year lease period, with a reserve price set at Rs 3,44,500 per square meter of built-up area. A senior official from MMRDA noted that this reserve price aligns with the price paid by Goisu Realty in the previous year's bid.
MMRDA is earmarking expenditures of Rs 28,705 crore on an array of infrastructure projects for the fiscal year 2023-24. The projects include the development of Metro corridors, the Mumbai Trans Harbour Link, Versova-Vasai Sea Bridge, and an underground road between Eastern Freeway and Marine Drive.
The authority, which lacks the power to generate revenue through taxation, has received state cabinet approval to raise Rs 60,000 crore in loans in July 2022. The government will act as a guarantor for the initial phase, allowing MMRDA to borrow Rs 12,000 crore to finance infrastructure projects in the Mumbai Metropolitan Region.
MMRDA envisions increasing its revenue through strategic land deals and asset monetisation, particularly its metro network. Despite the lack of tax revenue, officials believe the authority will sustain a positive cash flow from diverse revenue sources over the next 25 years. The approved Rs 60,000 crore loan will serve as a financial safety net, buffering against possible delays in project completion and resultant revenue shortfalls over the next five years.
In line with this, MMRDA also anticipates repaying loans through the levy of development charges on residential, commercial, and industrial units, as well as through the monetisation of land. Operational and maintenance costs for assets can be covered by alternative measures, such as taxes, cess, and advertising, officials have stated.
MMRDA's strategic move to lease out these prime plots demonstrates a comprehensive plan to enhance the city's infrastructure while ensuring financial stability. Through strategic land leasing, asset monetisation, and levying development charges, the authority is looking at a diverse approach to secure Mumbai's development future. The next few years will be crucial to see how this innovative strategy unfolds and contributes to the economic prosperity of Mumbai.
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