Nagpur hopes for windfall from malls

This Diwali has brought some good news for the cash-strapped Nagpur Municipal Corporation (NMC).

If things go according to plan, the NMC would earn Rs 545 crore over the next 20 years as lease rental from the six malls proposed to be set up on its surplus lands.

Addressing a press meet here, Mayor Naresh Gawande said that the malls would change the face of the city.

The six malls are slated to come up at Netaji Market, Sitabuldi (9,393.4 sq m), water works office, Sitabuldi (4,297 sq m), Gokulpeth market, West High Court road (9,304 sq m), Danaganj, Old Bhandara road (16,875 sq m), Jaripatka bus stop (5,983 sq m) and at Pachpaoli near Kamal Talkies Square (17,244 sq m), according to municipal commissioner Lokesh Chandra.

The NMC was expecting the bids to fetch Rs 275 crore. However, it was in for a surprise when the bids were opened on Tuesday.

The civic body got an offer of Rs 46.7 crore for Netaji Market mall, Rs 63.61 crore for the one at water works office, Sitabuldi, Rs 126.41 crore for Gokulpeth market, Rs 145.74 crore for Danaganj, Rs 46.7 crore for Jaripatka bus stop plot, and Rs 116.75 crore for the Pachpaoli mall.

BSEL Infrastructure Realty Limited and Unity Infraprojects have formed a joint venture and bid for all the six sites, Chandra informed. He said NMC would thus get the Rs 545 crore during the next 20 years. A sum of Rs 27 crore would be realised per annum by NMC, which will be put to use for the development and maintenance of city's infrastructure.

The firm, which bags the contract, will pay a one-time premium to NMC in the range of Rs 1.5 crore to Rs 2.5 crore. NMC will charge a nominal rent of Rs 45 per sq m a year from the tenants. The firms will also pay a yearly amount to NMC for the next 20 years. The revenue will start flowing in NMC's coffers from the financial year 2008-09.

Chandra said the investment in the malls would total around Rs 1,000 crore spread over the next two to three years. Naturally, they would also create many jobs. He said the proposal would now go before the Standing Committee for finalisation of bids. After its nod, the developer will have to submit the layout.

The malls will be constructed on a built, operate and transfer (BoT) basis. Since the Netaji Market mall will be located in a crowded locality, the permitted floor to space index (FSI) is 1.25.

For the remaining five malls the FSI is 2.5. While NMC has laid down broad criteria for the malls, the builders can also construct hotels, restaurants, or multiplexes there as long as they do not violate development control rules (DCR), Chandra said.