Land Prices Soar As Bangalore Airport Prospects Brighten

The cost of the proposed Rs 1,700 crore Bangalore airport is set to balloon with owners of private land in the earmarked area, likely to demand upwards of Rs 15 lakh an acre. The land prices have already started rising following reports of a new agreement reached between the government and the Tatas to revive the project.

The Tata-led joint venture which includes the US Raytheon company, a Singapore Consortium, the Airports Authority of India and the Karnataka government, proposes to acquire 3,500 acres of land, half of which will be brought in by the state government as its share of the equity. The remaining will have to be purchased from private owners.

 

Informed sources said the prices have already started spiralling after reports of the new agreement trickled in. In the past week, the cost per acre around Doddaballapur (likely site of the Airport project) has climbed up by around 10 per cent. The area is fertile and the site of many farms where fruit, flowers and cereals are grown. Besides, land developers are active there, in a big way, selling exotic farm houses, exclusive bungalows and even budget properties.

A section of the farmland owners said land rates are prevailing around Rs 8 lakh to Rs 10 lakh per acre, depending upon the location. The rise is likely to be upto 50 per cent in three to four months time with the airport project picking up steam and an expected return of buoyancy in the stagnant Bangalore real estate market.

According to Ravi Malavalli a flower exporter from the Doddaballapur area there are over a 100 farmers, with holdings of over 25 acres, who export flowers and fruit. We earn considerable foreign exchange for the country and our land cannot be valued the same as that of another farmer who grows only ragi (cereal).

He said moves were afoot to form an association to prevent any possible forced takeover of their land by the government. While we are willing to sell land for the airport project, we want adequate compensation in keeping with the earning capacity of our land, or alternative land to continue with our foreign exchange earning activities.

The state government is yet to identify the private land earmarked for the airport project. Therefore, there still exists considerable uncertainty over what portions of land will be taken over. Meanwhile, the government is continuing to register farmhouses, and so, development activity is continuing unabated, the sources said.

The airport project company is expected to acquire 1,750 acres of government land at Rs 5 lakh an acre, against the market price of Rs 9 lakh an acre, which will form the state governments equity contribution for the project. The government is deliberately keeping the price low in keeping with its policy of encouraging infrastructure projects.