UP may give incentives to private builders

The Uttar Pradesh government may change the state township policy to give more incentives to private developers and builders.

The state had invited preliminary bids from reputed firms and consortiums for the development of modern townships all over the state.

But the response has so far been lukewarm owing to certain pre-conditions in the policy, which will now be fine-tuned.

“We held a pre-bid meet with the developers and their suggestions are being actively considered by the state government,” a senior housing and urban planning department official told Business Standard.

Besides, big developers had also voiced their misgivings at the Mumbai investors’ meet organised by Uttar Pradesh on October 27.

 

“The developers have repeatedly pointed towards the stipulation of competition of any township project in five years, whereas even the government agencies take 8-10 years for similar projects. This is being considered,” he said.

Announced in August 2009, Uttar Pradesh’s new Township Policy aimed at promoting private investment in developing modern townships all over the state. Thereafter, the state invited bids for the development of modern townships. However, the last date for submission of preliminary bids have been repeatedly extended for giving time to developers.

Now, the last date for filing the Request for Qualification (RfQ) is December 15.

“Top notch developers have evinced interest in developing the townships,” he added.

Since the minimum land area and investment criteria for each township is 1,000 acres and Rs 1,000 crore, respectively, the flow of private investment would be massive in the state real estate sector. There are 71 districts in the state.

On an average, it costs Rs 2-3 crore to develop an acre of land. Thus, developing an area of more than 1,000 acres would bring actual investment in the region of Rs 3,000 crore per township.

A Single Regulatory Authority will facilitate the development of new townships for speedier work. The government has left it to the prospective developers to choose the place, where they want to develop the township.

The proposed township should be outside existing development and industrial areas, besides other notified/municipal areas.

If the townships are proposed in the National Capital Region (NCR), it should conform to the NCR Plan or get no-objection certificate from NCR Planning Board.

According to the eligibility criteria, the company should have an annual net worth of over Rs 100 crore in the last three financial years without declining trend.

The net profit in the last three years should be positive and the developer should have experience of seven years in real estate/infrastructure development.