State government to fast-track outer-ring road project

Key component of Capital Region Development Project

Faced with mounting pressure over the alleged neglect meted out to the State capital in the Budget, the government is toying with various ideas to expedite the development of the proposed outer-ring road, a key component of the ambitious Capital Region Development Project (CRDP).

With the National Highways Authority of India (NHAI) approving the ₹8,136-crore project, the onus is on the State government to undertake the acquisition of the required land.

In order to circumvent the limitations posed by the prevailing fiscal crisis, the possibilities of either issuing land bonds or introducing a land pool scheme are being actively pursued. Realising any one or both of the options would enable the government to fast-track land acquisition without creating an additional burden of roughly ₹3,000 crore, the estimated cost of the purpose, on the State exchequer, official sources said.

Planned as part of the second phase of the CRDP, the 79-km outer ring road from Vizhinjam to Navaikulam will require nearly 1,500 acres of acquired land. .

Fixed interest rate

For this, land bonds could be issued to owners in return for the land ceded for the project.

The financial instrument, which will carry a fixed rate of interest, will enable long-term repayments. Besides, those in need of cash immediately will be able to find prospective buyers in the bond market that has been witnessing increasing popularity in the country. “If all goes to plan, Kerala will become the first State to issue land bonds for infrastructure development projects,” the official said.

Another option is the introduction of a land-pooling scheme, similar to the one that has been successfully implemented in various parts of the country.

While the government will not be required to pay land acquisition costs, the landowners stand to benefit from the increased land value from parcels of unused land that are transferred back to them in proportion to their original property.

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Printable version | Mar 29, 2020 2:56:34 AM |

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