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Now, Cidco gives away 500 crore plot as compensation [India]

0 Comments | Times of India, The, Jul 25, 2010 | by Bharucha, Nauzer K

MUMBAI: Imagine surrendering marshy land on an island surrounded by a creek for a public project and getting a prime plot worth several hundred crores in return as compensation.

This is what City Industrial Development Corporation (Cidco) did in 2008 while acquiring 150 acres in Vaghivalvi village in Panvel from builder Bhupendra Shah for the proposed new international airport. As part of its 12.5% compensation policy, Cidco allotted him a prime 13-acre plot (53,000 sq m) close to the Cidco head office in Belapur, which local real estate developers say could be worth at least Rs 500 crore.

Two weeks ago, the state cancelled this allotment made to Shah’s company, Iraisaa Developers (more popularly known as Bhoomi Raj Developers), and has directed Cidco to ensure that henceforth all land given as compensation be equivalent in value to the land surrendered by the owner to the government.

“The government recently decided to cancel this allotment and start an inquiry,” urban development secretary T C Benjamin told TOI on Friday. “The land value has to be comparable. The land acquired for the proposed airport is low cost and partly submerged in water. The cost of land given as compensation is grossly disproportionate in its value,” he said. In future, the Cidco board and the state government will have to be notified about the value of the compensatory land. The Cidco managing director will have to submit a monthly report on this, Benjamin added.

When contacted by TOI, Shah said,”We will move court. The government cannot do this. There is a mala fide move by some politicians in this.” The builder claimed he had purchased 150 acres for Rs 20 crore from villagers in Vaghivalvi in 2005. “We had asked for alternate land in Kharghar, but Cidco instead gave it in Belapur. If the government has cancelled the allotment, where does it plan to give us land now?”

The builder further claimed that he had already spent Rs 20 crore on levelling the Belapur land and putting up a retaining wall. According to him, the Belapur land allotted to him will not fetch more than Rs 40,000 per sq m (around Rs 200 crore). “Cidco gave it to us on a ‘as is where is basis’. We will have to develop the infrastructure and construct a road and drainage system,” he added. However, local builders said this land is located in a prime area and will fetch a minimum of Rs 1 lakh per sq m (over Rs 500 crore).

In 1990, the state came up with a policy to allot 12.5% of the land surrendered by project-affected persons in Navi Mumbai. The government stayed the policy for eight years, but reintroduced it in 1998. The land swap between Cidco and Shah took place while G S Gill was V-C and MD of Cidco. Gill was also in charge of Cidco when it allowed Avinash Bhosale to convert 50% of a plot for a hotel project into a residential zone
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