Real estate no longer the driving force for MMRDA?

Mumbai Metropolitan Region Development Authority (MMRDA) is primarily known for being one of the richest state owned organisations.

However, this status of being financially sound is not really what the reality may be. With not even a single land deal in the past three years being cracked, the authority has been forced to think of its real estate management strategy.

MMRDA has been spending about Rs500 crore on average till 2007. This expenditure rose post 2007 when the authority took up a number of infrastructure projects such as the metro and monorail.

However, during the last three years, apart from the iconic tower deal in Wadala, the authority has not been involved in any land auctioning.

While the trends indicate that the authority officials are not in a mood to take risks by going for more auctions (since there have been cases of non-payment by the bid winners- the one involving Jet Airways being prominent), MMRDA metropolitan commissioner Ratnakar Gaikwad felt that the authority's approach has to be a cautious one.

Gaikwad said, "While there was a slump in the reality market which was largely responsible for the authority not risking another auction. Once we can ascertain the expenditure for these projects, only then we can finalise any course of action for land auctions," said Gaikwad.

The authority last year had appointed KPMG as consultants and the idea was to come up with models, which can give the authority a stable and sustainable source of finance over a period.

However, Gaikwad said, "Firstly, we are not in a hurry to generate revenue at this stage. Many of our projects will involve the concessionaire's funds since they will be on Public Private Partnership. Moreover, we also need to keep an eye on the income tax department since our body is not registered as Urban Local Body (ULB) and we have to pay income tax as we are registered as a trust."