PPP for Rs 1-lakh flats; pvt players to get full rights over 40% land

The state government has decided to implement its ambitious scheme to allot flats at Rs 1 lakh each on a Public Private Partnership (PPP) basis, allowing private players to utilise up to 40% of the land earmarked for the project for their own use.

The government has identified 286 acres of land around Bengaluru city under the Rajiv Gandhi 1-lakh Multi-storey Bengaluru Housing Scheme, approved by the Cabinet recently. The private players will get full rights to utilise up to 40% of the total land (approximately 114 acres), including the absolute ownership, in return for constructing one lakh flats in the remaining 60% land. The private players will be selected through a competitive bidding.

The scheme envisages construction of affordable houses to the economically and socially weaker sections in Bengaluru. One-BHK (bedroom, hall and kitchen) and two-BHK flats are proposed to be constructed under the scheme. The total cost of constructing one lakh such flats is estimated at Rs 5,000 crore.

As per the original project plan, Rajiv Gandhi Rural Housing Corporation Ltd (RGHCL) and Karnataka Slum Development (KSD) were the implementing agencies. The plan was to auction up to 25% of the land earmarked for the project, besides pooling in funds from various housing schemes of the state and Central governments. RGHCL had sought initial working capital of Rs 500 crore to take up the project.

Official sources in the government said Section 17.2.1 of the Karnataka Affordable Housing Policy was inserted in the proposal, allowing private participation, before placing it before the Cabinet for approval. Section 17.2.1 states, “Private developers can build AHUs (affordable housing units) on at least 40% of identified vacant government land as approved by the SLECAH (State Level Empower Committee for Affordable Housing). The remaining portion of the land may be transferred to the private developer with full rights as per the Master Plan/CDP Land Use and local Zoning Regulations, as decided by the SLECAH on a project-by-project basis.”

The government has decided to hand over the land (40% that the developers are entitled to) as per Section 53A of the Transfer of Property Act. Under this section, the transferee acquires full right of the property even without execution of sale deed and the transferor later cannot claim any right in respect of the property. The government will provide funds from various housing schemes to the developers, over and above handing over up to 40% of the land, the sources said.

They said senior officials of the Housing department had opposed the move to allow private participation and hand over land under the Transfer of Property Act.

When contacted, Housing Minister M Krishnappa defended the government’s decision. He said though the policy says that AHUs are to be developed on 40% land, the Cabinet increased it to 60%. The decision to take up the scheme under PPP basis is aimed at speedy implementation, he added.