If the government’s efforts to auction the land bank of realestate in India that is currently in the hands of the nations loss making state run enterprises fails to attract bidders, the government plans to use the vacant land to construct affordable homes on it.
The Story Thus Far
A state run real estate firm intends to soon auction 2.000 acres of land that belongs to five loss making state run companies. The companies that will soon have their land holdings under the hammer for auction are Instrumentation Limited, HMT Bearing Limited, Tungabhadra Steel Products, Hindustan Steel Products, and HMT Watches Ltd. If the land holdings of these companies refuse to attract government bidders when the land in auctioned, the government will consider constructing affordable homes on the land.
Public Sector Companies Given Preference
It was reported to this property site in India by a senior government official that in case public sector companies as well as the various state governments fail to bid for the land parcels when they are auctioned, the government will conduct a feasibility study considering the possibility of building affordable houses on the land. If the feasibility study proves that the land would not be a suitable backdrop for affordable property, the government will open the land to private bidders.
As reported by the senior government official, the governments goal is not to generate as much revenue for itself as possible by auctioning the land but rather to utilize the land to it’s fullest potential.
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A Possible Role for State Governments
The state run real estate firm charged with the responsibility for all 2,000 acres of land will hold talks with the respective governments to ascertain whether they would be willing to buy the land. If the governments do not agree to buy the land, a feasibility study will be conducted. If the study indicates that affordable real estate can be built on the land, the state run real estate firm will comply and construct affordable houses on the land. Additionally, if the governments agree buy the land banks, the state run real estate company will provide the various governments who bought the land with the required expertise to build houses on the land.
More Land Banks Up For Sale
In the next few months there may be more land banks up for sale according to the Chairman of the company responsible for auctioning the land banks of the five PSU’s mentioned. The land banks of six more government run companies may be up for sale within the next few months in addition to the current land banks of the 5 loss making state run companies that are up for sale.
Land Bank Sale Management Galore
The state run real estate company which will auction the land bank of the five companies mentioned has also been appointed as the Land management agency responsible for auctioning the real estate assets of the other six loss making government firms.
After the land bank auction of loss making firms has been successfully completed, the state run real estate company that conducted the sale shall receive half of one percent of the value realized from the auction as its fee for services rendered. The maximum the company may receive from the auction has however been capped at 1 crore.
The central government will be the first suitor considered for the land banks, followed by Central PSE’s, State Department’s, and finally state government bodies will be considered suitors for the land banks. If all these government’s and government companies do not agree to purchase the land banks within six months, then, according to this real estate website the government will auction the land to private players.
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