The Maharashtra government's decision to repeal the Urban Land Ceiling and Regulation Act (ULCRA) in order to obtain funds under the Jawaharlal Nehru Urban Renewal Mission has spelt a bonanza for some of the oldest companies in the city. According to real estate consultancy Knight Frank India in Mumbai alone as much as 17,000 acres of prime land will be released across the city. Others estimate the amount of land to be released at 30,000 acres.
This will mean that a number of companies like Godrej, the Birlas and the Wadhwan group who were apprehensive about their land holdings being taken over by the government can now develop mega townships across the city. The Godrej family and several of their group companies own some of the largest tracts of land in the suburb of Vikhroli measuring more than 3,500 acres.
However, government officials say, a lot of the land is covered by mangroves and comes under the Coastal Regulation Zone restrictions and cannot be developed. However, the total value of the land held by the Godrejs is approximately Rs 53,000 crore.
A total of about 6,000 acres are owned by just four companies, the Godrejs, the Birlas, the Wadias and the Wadhwans. The Birlas own the land via the Century Textiles companies while the Wadhwans' land holdings is via Housing Development and Infrastructure Ltd (HDIL), a company listed in the exchanges.
The Bombay Dyeing company, owned by the Wadias, has already begun efforts to develop the property.
Bombay Dyeing has 50 acres at Prabhadevi in Central Mumbai and 100 acres in Thane on the outskirts of Mumbai. The value of the property has been estimated at Rs 3,900 crore.
Maharashtra government officials state that not all the land will be available for immediate development. 'Many of the plots have been encroached upon or are locked in legal disputes. But all these cases will be resolved in the next three to five years and there will be a construction boom,' said an official in the urban development ministry.
The builders feel that the repeal of ULCRA will allow them to begin the development process more easily. 'Earlier, we had to take no objection certificates from the government on excess land,' says a senior officer at HDIL. This requirement is likely to be expedited, say sources.
A similar story is being repeated across Maharashtra. Thousands of hectares of land has been freed in towns like Nagpur, Pune and Aurangabad, say officials.
In all more than 100,000 acres of land is likely to be freed for development across Maharashtra.
Not surprisingly companies which own huge chunks of land in urban areas are seeing a big jump in their valuations. Godrej Industries, a company listed in the BSE, has seen its shares hit the roof even though the land is owned by Godrej & Boyce, a holding company.
Adi Godrej, chairman of the Godrej group, has also indicated that benefits from the land held by the group would flow to Godrej Properties, a group company. Godrej Properties is expected to hit the markets with an IPO in order to mobilise funds for the project.
Meanwhile, the Maharashtra government has set up a think tank to formulate policies on how to allow development of land freed under the ULCRA.
The think-tank will consult elected representatives and civic bodies across the state to look into details like development control (DC) rules, transfer of developmental rights (TDR), build-operate-transfer (BOT) policy, solid waste management methods, encroachments, land acquisition, etc.
