_Infrastructure Development Projects
1. What are the current challenges in getting land for PPP infrastructure projects especially since land is given out by states on token lease money to Govt-owned entities? How can they be addressed?
Land allotment for PPP projects initiated at the state level has not been an issue. In some cases where the PPP project is initiated by a central body and the land in question was allotted for a specific purpose by the state government, there are challenges faced. For the success of PPP transactions, it is critical for all matters related to the land to be pre-resolved.
a. There are cases where the purpose of the PPP project is the same as the one for which land was allotted. In such cases, part of the land/development rights are being commercialized to cross-subsidize the project development. In such cases, the issue of revenue sharing does not arise.
b. In some cases which involve commercialization of land without any development of infrastructure/project, for which the land was allotted, there are issues. The crux of these issues is equitable sharing of the revenues earned between the state and the central bodies. Such issues are best handled by working out a suitable sharing formula.
Recently commissioned Gandhinagar Railway station with an integrated 5-star hotel is a very good example of center state collaboration. GARUD (Gandhinagar Railway and Urban Development Corporation Limited), an SPV, was formed with Equity Contribution of Government of Gujarat (74%) and IRSDC (26%) for the redevelopment of Gandhinagar Railway Station, development of a 312 key Hotel on the Airspace above Railway Station and management of Mahatma Mandir Convention Center and Helipad Exhibition Grounds. The SPV further selected Leela Hotels as the Operations Management partner for the project.
2. Do you think creating a portal for a land bank by DPIIT helps in assessing the value of the demand because it puts across available supply transparently?
The creation of a portal with details of land banks proposed to be monetized brings in definite supply-side transparency. It helps market participants prepare their business plans and structure themselves for the most suitable acquisitions. However, it also has a disadvantage of non-prime land parcels losing their marketability. In short multiple competing supplies of similar land, parcels would end up cannibalizing the demand for some of the non-prime land parcels.
3. Is land-use change still a challenge across various states or the processes have eased? In this context, how good is the mixed land use policy of Delhi?
Land-use change/zoning change has always been a very big challenge for PPP projects. Multiple examples of PPP projects failing during implementation can be sighted. Failure/delay in the change of zoning of the land from public / semi-public use to commercial use have been the key point of dispute in these failed PPPs
4. Is, land availability still a challenge for manufacturing and infrastructure projects? Or is it only the higher price under LARR which is of concern?
Industrial land supply has seen robust augmentation through state industrial development bodies and private sector developers. Greenfield industrial cities being developed by NICDC in collaboration with various state governments have gone a long way in the development of world-class industrial infrastructure in the country. Some of these Special Investment Regions include Dholera in Gujarat, Shendra Bidkin in Maharashtra.