Standing committee approves proposal of mortgaging land to HUDCO to authenticate earlier loan.
The Ahmedabad Municipal Corporation (AMC) has mortgaged land belonging to Sabarmati Riverfront Development Corporation Ltd (SRFDCL) to obtain a loan from Housing and Urban Development Corporation Ltd (HUDCO).
The civic body's standing committee passed a proposal on Thursday to mortgage around 92,000 square metres of land against a Rs350 crore loan sanctioned by HUDCO in November 2009. Taking into account 20% of the land as earmarked for roads from this mortgage parcel, the price for the remaining land comes to around Rs60,000 per square metre.
SRFDCL had already obtained the Rs350-crore loan from HUDCO in November 2009, and needed to mortgage property valued at Rs435 crore for the same. "This is a part of the due diligence as HUDCO authorities wanted proper authentication of mortgage. So the standing committee passed a resolution to this effect on Thursday," said Guruprasad Mohapatra, municipal commissioner of the city.
The civic body has mortgaged the land parcel located between Ellisbridge and Sardar Bridge on the eastern bank of the Sabarmati.
"Only some parcels have been mortgaged, not the whole belt between the two bridges. Moreover, land for roads will also be deducted from these parcels so the effective saleable area would be even lower," said an official of SRFDCL.
Taking into consideration around 20% land earmarked for roads in SRFDCL planning, the actual saleable area would come down to nearly 74,000. As a result, the value of the property comes close to Rs60,000 per square metre.
Of the total sanctioned loan of Rs500 crore from HUDCO, SRFDCL had availed of a loan of Rs200 crore in 2005-06 by mortgaging various properties including AMC's west zone office at Usmanpura and other open land parcels valued at Rs250 crore.
SRFDCL had not availed of the other Rs300 crore sanctioned under the same loan. It returned the amount and took a fresh loan of Rs350 crore from HUDCO. While the interest rate was fixed at 13% for the earlier loan, the company negotiated afresh and secured the new loan at 9.75% implemented from April 2009. The move to seek a fresh loan of Rs350 crore was aimed to take advantage of the lower interest rate, a senior official of SRFDCL had said earlier.
Meanwhile, as SRFDCL was negotiating a fresh loan deal, AMC had provided an interim loan of Rs180 crore to the body to continue work on the riverfront. After availing of the fresh loan from HUDCO, SRFDCL would be able to partially pay back the interim loan to AMC.
Auctioning of reclaimed land would also help SRFDCL pay back the entire amount it borrowed from the civic body and HUDCO.
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