RTC to lease land to up revenues

Speaking to Business Standard, APSRTC executive director (training and coordination) A Nageswara Rao said lands measuring 2-10 acres had been identified for giving out on lease. The bidders will have to construct multi-platform bus bays at these sites at the ground level. These lands have been acquired through the government, purchased or alienated for construction of passenger amenities and others.

APSRTC has entered into a memorandum of understanding with Delhi-based Urban Mass Transit Company Limited, a joint venture between the Government of India and the Ministry of Urban Development, for preparing the project proposal, assessment of its financial potential and evolving a business model for each identified site. The corporation is has roped in Ernst & Young for asset management.

Though the board gave the nod for commercial use of vacant lands in 2001, the activity picked steam only in the last 2-3 years. It recently finalised the allotment of a 9.14-acre land in Musheerabad in Hyderabad.

Soma SVEC Consortium, which bagged the tender, proposes to construct a multiplex there apart from the multi-platform bus terminal. It will pay an upfront amount of Rs 95 crore and Rs 11 crore lease rental for the first year. The rental would be increased from 5-10 per cent every year.

"We are expecting a cash inflow of Rs 2,000 crore from the Musheerabad project alone during its lease period," Rao said, adding several permanent terminals would be added across the city. The corporation has about over 7 acre at Ranigunj, a prime business centre in Secunderabad.

It would shortly decide on the land it would lease out. Though smaller in area, this is expected to fetch more revenues than the Musheerabad land.

The APSRTC, in phases, would put lands at Shamshabad near Hyderabad and Tirupati under the hammer. Vijayawada and Visakhapatnam zones would be taken up in the next phases. The revenues would be used to wipe out the Rs 1,000-crore accumulated losses, absorb oil price shocks and create a corpus. "It will take four years for us to wipe out the losses," he added.

This apart, the APSRTC is leasing out small parts of lands along the highways for setting up businesses on deposit, operate and transfer basis. In about three years, it has allowed setting up of 974 shops, which bring in about Rs 3 crore per annum by way of rentals. About 150 more shops would be allotted shortly at an average deposit of Rs 1 lakh, he said.