A real estate development project of 572 apartments worth over Rs.1,000 crore on the Bolgatty island off Marine Drive is awaiting final environmental clearances. This is part of a Rs.380-crore investment deal to build a convention centre and a hotel. But the real owner of the land, the Cochin Port Trust (CPT), gets just Rs.71 crore for handing over the land on a renewable 30-year lease.
The private developer proposes to build 572 “service apartments” on 10.9 hectares (a hectare is 2.47 acres) of the leased land. Serviced apartments normally mean fully furnished apartments with cleaning, laundry and other services on long-term rent to regular or occasional clients. Here, the lease agreement between the CPT and the developer refers to the possibilities of “assignment, transfer or sublease” of the land or the buildings to be constructed by the developer.
The agreement merely talks of an unspecified sub-lease levy to be paid to the CPT for the land and buildings, which the developer is allowed to sub-lease or transfer. And it is silent on whether the developer can do outright sale of these “serviced apartments’’. While renewal of the land lease is written into the agreement, it does not mention profit-sharing by the developer with CPT or any share of the cost of apartments to be “transferred or sub-leased”. The CPT refused to respond to The Hindu’s queries.
A new three-bed room apartment in upcoming projects at Marine Drive costs between Rs.1.5 crore to Rs.2 crore. So, the 572 apartments will be worth over Rs.1,000 crore as they are coming up on land reclaimed from Vembanad Lake, an ecologically fragile wetland (Ramsar site).
While justifying the reclamation during 2004-05, the CPT had contended that no Coastal Regulation Zone (CRZ) clearance was required as the total project cost was less than Rs.5 crore. Now, the developer is investing Rs.380 crore to build a 217-room hotel, a 3,400-seat convention centre, a 1,046-seat restaurant and a health club, apart from 572 apartments.
Market price for land
The CPT had initially sought clearance for the reclamation of land from Vembanad Lake. And permission was given only for port-related activities.
But the CPT is now handing over 26 acres of waterfront land on the Bolgatty island for Rs.71 crore and an annual lease rent of Rs.1.05 lakh with a 30 per cent rent hike every five years. Land can be bought at Bolgatty in the open market only for Rs.20 lakh a cent (one-hundredth of an acre), which will put the market price for the land at Rs.20 crore an acre and thus the total land cost for the project at about Rs.500 crore.
The Kerala State Coastal Zone Management Authority had issued CRZ clearance to the project even while its subcommittee had listed out the CRZ violations.
Jacob Thomas, the former CPT chairman, had placed a proposal before the Board of Trustees for the year 2004-05 for dredging and filling of land for port area at Bolgatty as “more land had to be provided to the Dubai Ports International for ICTT at Vallarpadam than earlier contemplated at the time of the preparation of the Port-based Special Economic Zone.”
Land reclamation was required “to provide additional land area adjacent to Vallarpadam for the future development plans of CPT,’’ Mr. Thomas wrote.
Later, in 2009, N. Ramachandran, the then CPT chairman sought permission from the Union Ministry of Shipping “for long-term leasing of certain plots of land which are not useful for port-related activities.” He had listed seven sites owned by the port and not required for port-related activities. Some of these plots of land were situated away from the port and the Wellingdon Island.
In response to CPT chairman’s letter for “leasing out certain tracts of land, which are far away from the Port for a period of 90 years so that Cochin may not need budgetary support for capital dredging for deepening and widening of the approach channel and berth basin of the ICTT,” R. Srinivasa Naik, Director (Ports Operations) gave permission to lease out these plots for 30 years.
But what was leased out was the land reclaimed solely to expand the port.