Chandigarh UT Aministration plan to put vacant lands for sale to fund Metro Railway project

CHANDIGARH: The UT administration has begun working out a financial model for Rs.10900 crore Metro project as neighbouring states have already conveyed they would not share any subsequent losses incurred by the project.

Revenue from advertisements, sale of vacant land and ticket rates will be the key source of funds for running the affairs of Metro by a financial entity in form of a special purpose vehicle (SPV). The ministry of urban development has told UT the three stakeholders and the ministry itself would bear 25% each of the total cost of the project. The draft of the MoU has already been revised once after objections from neighbouring states.

In May, the ministry had asked the administration to work on setting up of the SPV and also set up a joint core team of officials with Punjab and Haryana and nodal officers from the ministry.

The proposed Metro would pass along Himalaya Marg and Vikas Marg, where abutting land for commercial purposes was lying vacant and was still to be sold. The proposed system would greatly benefit businesses which would be developed after some time on these roads.

It was proposed that unsold commercial land along Himalaya Marg and Vikas Marg (about 230 acres) may be handed over to SPV for revenue generation through auction. Of this, 50% would be available for commercial sale. In the past, this commercial land has been auctioned at the rate of Rs 3 lakh per sq yard. Same auction price was assumed for this unused land.

“No decision has been taken on utilisation of vacant land but projections of ticket sales and advertisement revenue has already been given in the comprehensive mobility plan for the project and it only needs to be updated,” said a UT official.