The Delhi Metro’s current earning from property development on its Phase II and III projects is Rs 2,716 crore less than the target it had set for itself, due to “poor market conditions” and “regulatory bottlenecks”.
According to DMRC records, the corporation’s revenue generation target from Phase III was Rs 2,505 crore, out of which Rs 540 crore has been realised so far. From Phase II, the target was to generate Rs 960 crore through property development, but the actual earnings stand at Rs 209 crore.
Examples of property development initiatives in the Metro include renting out space for food kiosks, ATMs, magazine stalls, commercial establishments such as shopping malls, and construction of residential properties.
Under the 124-km Phase II network, a number of busy stretches came up in the DMRC network, including major parts of the Yellow and Blue lines, while the Pink and Magenta lines are the most notable additions from the nearly 167-km network built as part of Phase III.
A perusal of DMRC documents revealed that the corporation, a Special Purpose Vehicle with equal equity participation of the Centre and the Delhi government, has been jostling with a number of issues with the Delhi Development Authority for years.
The DMRC has been demanding that the DDA allow calculation of Floor Area Ratio (FAR) of its properties on a par with public land, exemption from paying additional FAR charges, pending Transit Oriented Development (TOD) policy, no fresh allotment of land for housing development, and a five-star hotel project pending since 2008.
The Union government, while sanctioning the Delhi Metro Phase I project in 1996, had mandated that income should be generated through property development for paying back debts. DMRC got land at nominal rates and mostly on 99-year lease. Later, in 1999, it set up a Property Development wing.
The corporation did make a good beginning, earning Rs 782 crore from property development, against the target of Rs 300 crore, from the Phase I project, under which a 65-km network was built. Since then, though, it has been dealing with shortfalls.
When contacted, DMRC declined to comment on the issue.
Sources attributed the situation to a number of “impediments”. “Firstly, market conditions are not good for property development at present. The DDA does not allow FAR in properties built on our standalone plots to be calculated on a par with public, though there is no restriction as per the Master Plan of Delhi. Parts of stations like the concourse, platforms, technical rooms are being counted for FAR calculations, leaving no scope for property development at stations. And lastly, the TOD policy has not been notified yet,” a DMRC source said.
According to documents, the DMRC has also demanded that it be exempted from getting completion certificates for construction inside operational buildings from civic bodies. The Centre had earlier exempted it from availing prior approvals for such construction from the civic bodies.