Govt looks to PPP model for housing its officials

The government is planning to adopt the public-private partnership (PPP) model for government housing that is proposed for the capital city.

The idea would be to give a portion of the land to the developer for commercial exploitation, so that he can fund the housing project. According to top government officials, there was a severe shortage of houses, especially for the Senior Secretary-level officials in Delhi.

"Many secretary-level officials are living in accommodations two-three grades below their level and many others were finding it difficult to find accommodation at all," a senior government official told Business Standard.

A meeting was held by Cabinet Secretary KM Chandrasekhar earlier this month to discuss the possible ways to get the housing project off the ground, in the quickest and most efficient manner.

It had earlier been proposed that the housing project be handled through the National Building Construction Company (NBCC), the public sector firm, which would be given some surplus land that it could sell and use to fund the housing project.

But there were two problems with this plan. One, any money that is raised by sale of government assets needs to come into the Consolidated Fund of India and then parliamentary approval is needed for it to be spent.

Therefore, if NBCC was permitted to sell or commercially develop some land and keep the proceeds and use them to build government housing, that would, in a sense, be unconstitutional. Therefore, it was felt that using this route may not be feasible.

Second, if such housing projects were entrusted to NBCC, it would remain under the tight control of the bureaucracy and the government where they would control the land sale and the handing out of contracts.

"In other words, all the problems that beset public sector and government projects and contracts would remain. Also, it would take years to build," said one source.

Therefore, it was felt that the PPP route may be a better option "" this would allow competition and private sector efficiencies to be exploited.

The PPP model can be brought in through different ways, sources said. Either some commercial land could be given for development, or some of the ready flats could be offered or an annual annuity could be given to the developer.

A top government official said that the idea was to build large apartments to make up for the severe shortage of houses. However, he said that this would not help any of them but three-four years down the line, the shortage may be eased.

He said that they were looking at land around the Moti Bagh area initially.