Chennai
As the metro rail chugs along a 45 km stretch across Chennai, it may open up a gold mine for the state government and provide the city a whole new look.
The government chanced upon the financial potential of the metro rail while examining a proposal from Chennai Metro Rail Limited (CMRL) to introduce additional floor space index (FSI is the ratio of land area to the built-up area) within 500 metres of the metro corridor.
The proposal, which came up for discussion at a CMRL committee meeting, headed by chief secretary Debendranath Sarangi on February 14, has been forwarded to the Chennai Metropolitan Development Authority for commissioning a detailed study. “We expect the report to be ready in three months,” said a senior official.
The potential for revenue generation through selling space is staggering. CMDA usually gives FSI of 2.5 for high-rise buildings in the city. If it is increased by 1.5 FSI along the metro corridor, the state can generate up to Rs 2.5 lakh crore in revenues through property tax (by adopting the yardstick of the prevailing premium FSI scheme). If FSI is increased by 2.5, the revenue will go up to Rs 4 lakh crore. Bangalore metro corridor is also working on a higher FSI model.
Potential Gold Mine
The govt may relax building restrictions, allowing for taller constructions within 500 m of the metro corridor The govt may generate at least 2.5 lakh crore if the plan, which has been proposed by Chennai Metro Rail Limited, is put into action.
Extra FSI will up land price
The proposal by CMRL is a transit-oriented development model, adopted in cities like New York, Singapore and Seoul. In the process, the city skyline will be dotted with skyscrapers and vertical villages.It aims to increase population density along the metro corridors and bring passengers within walking distance of stations.On the face of it, CMRL’s gain is optimal use of metro and faster returns on investment.
However, every piece of land along the metro corridor in Chennai will not qualify for such benefits because it will also have to comply with other development control rules of the CMDA.
Small plots will have to be pooled into large parcels to draw maximum potential.Even if 50% of landowners avail additional FSI over a period of time, the state will generate enough funds to write off its entire public debt of 1.18 lakh crore and take up many new infrastructure projects.
On the flip side, land prices will go up wherever additional FSI is available. “However, it won’t lead to increase in apartment prices,” noted P Suresh, a builder.
Many world cities have much higher FSI than Indian cities. New York has 15 FSI for the central business district (CBD), 10 FSI for the rest of the city and 0.5 FSI for suburbs. Singapore has 8 FSI in the CBD, 6 FSI for the rest of the city and 1.5 FSI for suburbs. Seoul has 10 FSI in the CBD, 8 FSI in the rest and 0.5 FSI in the suburbs.
The issue is not just about real estate growth and filling the government coffers.The city planners have to be cautious in comparing Chennai with other world cities, said another official.
“Their infrastructure for utilities (like water supply and sewerage) is capable of catering to the needs of a high population density. Chennai’s infrastructure, on the other hand, is inadequate. CMDA, Chennai Corporation and other service agencies have to upgrade infrastructure like roads, water and power supply to meet the growing demands. The good news is that funds will not be a constraint if we sell virtual space,” said the official.
Being liberal on FSI alone will not facilitate infrastructural growth along transit corridors, said Suresh. “The CMDA has to shed its baggage and take a fresh look at its development control rules, without which more car parks and other support infrastructure cannot be created. The government can also look at preparing a detailed development plan for the entire metro corridor.”
Source: The Times of India, Chennai
