Private party’s Rs 18 crore offer for plot seeks to exploit SMC’s weakness

SURAT: Surat Municipal Corporation (SMC) has received an offer of Rs18 crore from a private party to set up a multi-level parking and commercial complex on a plot measuring 4,000 square metre on Ghod Dod Road.
This plot was earlier used by a private contractor as parking for vehicles of those coming to Indoor Stadium. The standing committee in 2017 had decided to build a multi-level parking and commercial complex on the plot on public private partnership model.The civic body’s earlier attempts to get partners had failed and no one seriously bid when tenders were issued for its development. This is a different development after five failed attempts by the civic body wherein a private party is keen to invest a substantial amount of money on developing the plot on Ghod Dod Road.
“The real estate is in the grip of recession. This is why Jantri rate in the area is Rs45,000 per sq metre as against market price Rs1.5 lakh per square metre. The Rs60 crore plot at Jantri rate is valued at Rs19 crore. The offer of Rs18 crore is not bad taking into consideration the cost of construction and return on investment,” said a civic officer from Athwa zone.
“Maintenance of property remains a big problem for the civic body. Take for example the Indoor Stadium or open food court at Piplod, SMC does not have sufficient manpower to keep these facilities in good condition. The annual operational and maintenance expense of Indoor Stadium is around Rs1 crore, which the civic body is not able to generate by giving it on rent,” he added.
The private partner, who will give shops in the commercial complex on rent for a period of 15 years, will have to give a rise of five per cent every year to SMC on its share of the total rent collected besides a one time premium of Rs18 .18 crore.
Standing committee chairman Anil Goplani said, “We will take a decision on the issue on Friday. It is not feasible for SMC to construct and run such facilities. PPP model would save the local body manpower and money and help it earn handsome revenue on its assets.”