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Kolkata’s Social Housing Derailment: Govt to propose a new model

|By Sandhya Sutodia|

Kolkata : Anurag Chatterji*, who earns Rs 9,500, has spent 25 years in a rented flat and owning a house seems a distant dream for him. Meanwhile, his cousin Vinod Chatterji applied to the low-income group (LIG) housing which was made available at lower rates by the erstwhile Left Front government and private developers in the state in 2003. He is a proud home owner now.

But Anurag might not benefit like his cousin did as the new government does not believe in the joint sector development to promote affordable housing in West Bengal.

Kolkata has been pioneering the concept of joint sector development (PPP) to promote affordable housing.

However, in the last couple of years, with the formation of Mamata Banerjee-led government, this policy initiative has been derailed, thereby badly hitting the supply of LIG and MIG housing.

A few years ago, the real estate sector in Kolkata was abuzz with activity in the LIG and MIG segment. The erstwhile Left Front government had made developmental plans involving public-private joint ventures (JV) in order to solve the housing problems in the state to a large extent.

In a state crippled by draconian land ownership laws, nine Joint Sector and ten Assisted Sector Companies, not only mitigated the housing problem, but it also became the only way to develop large parcels of land for housing then. In the joint sector companies, the government held a 51 per cent stake while in the assisted sector, the state government’s stake was 11 per cent.

Bengal Ambuja Housing Development Ltd, which was the first joint venture (JV) formed in the year 1993 in the state between WBHB and Gujarat Ambuja Cements, has about nine residential and at least two commercial projects.

“Public-private JVs were becoming increasingly popular as providers of housing in West Bengal,”

experts said.

The question now is, will projects like ‘Uttara’ (in Action Area II, Rajarhat, a residential enclave spread over 5 acres of land, built in JV between DC Properties Limited of the Development Consultants Group and the West Bengal Housing Board), ‘Silver Spring’ residential project (on Eastern Metropolitan Bypass developed jointly by Bengal Silver Spring Projects Limited and Kolkata Municipal Corporation) and ‘Upohar‘ -The Condoville at Chawkgaria (off EM Bypass by Bengal Ambuja Housing Development Limited) remain a distant dream for the people of the state?

It is interesting to note that the Mamata Banerjee led government does not believe in joint development because it believes that the private companies do not pay proper dividend to the government. Yet, the government is mulling other options to address the low cost housing in the state.

“We will not implement and promote this (joint venture) pattern of development. We are looking and exploring other options for addressing the issue of LIG and MIG housing in the state,”

said state housing minister Aroop Biswas.

Infact sources have confirmed that the Trinamool Congress has assigned Ernst and Young to conduct a feasibility study on the joint sector development model.

“We may look at a role model with an intention to boost housing activities with vibrant managerial efficiency of private sectors and overall supervision by the Board,”

further added the minister.

“The earlier model of Joint Sector and Associates sector with the government and private parties are being revisited by the new government. The government will decide on newer business models of developing affordable housing on its norm and also with private sector participation,”

said Harsh Vardhan Patodia, President of the Confederation of Real Estate Developers Association of India (Credai) Bengal.

Land being a scarce commodity, the new government is now providing a level playing field to all the bidders through land being allotted through an open tender system and the builders can bid on meeting the criteria.

“The demand for LIG and MIG housing is insatiable and huge but hardly any project has come up in this category, “

said a builder on the condition of anonymity.

West Bengal is still governed by the Urban Land Ceiling Act, which restricts the amount of land private players can hold.

This in turn has led to diffused local developers who have been kept out of building large projects. With government participation, however, those joining hands with the state had scaled up their real estate projects earlier. However, now it seems that would not be a possibility, rues a legal expert.

In a state where real estate development was viewed with suspicion and run by fly-by-night operators, the participation of the state government had helped infuse life into the sector because low and middle -income groups were willing to risk their savings on government partnered homes.

Now builders can only wait for the state government’s assistance to build and sell dreams to the middle class who wish to own a home like Anurag Chatterji!


*(name changed on request)

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