The first big spurt in Apartment prices, happened in March 2006, from Rs.2200/sft to Rs.2600/sft and continued to increase till the rate hit Rs.3500/sft and then went into stagnation mode. That is a 60% increase in price in a year! The infamous GO86, which imposed new restrictions and rules on construction made developers jittery and it virtually caused shutting down of the residential construction industry, throughout Hyderabad.
Whatever be the merits of GO86 and its later revised Avatar, the fact of the matter is that the GOAP has proven itself to be absolutely INEPT. With one silly stroke, it had damaged dreams of lakhs of middle class people, to own a home in Hyderabad. While the hallowed intention was to protect buyers, the Govt. ensured that buyers pay double the cost for a home! Paying double the price, for having half a meter grass patch, around the apartment?! Inept work indeed! (The annual historic price increase from year 2000 can be viewed at http://www.exclventures.com/
HUDA (Hyderabad Urban Development Agency)
HUDA is definitely one of the better Urban Development agencies in India. If we were to base our study on the recent actions related to auction of lands by HUDA, the examples they have set, are certainly NOT what we would want private developers, to follow!
The high profile Golden Mile Campaign virtually fooled everyone. The buyers had obviously bid high, with big plans for going into construction early and converting investments into swift cash flows. With no clarity on when they would get possession of land, HUDA has made it a miserable wait for them. The message is clear. HUDA is undependable, as far as land that it hawks. Is it not important that Land is first got clear of LITIGATION before trying to sell to public? What then is the big difference between HUDA and petty, fly-by-night operators?
The Kokapet auction was followed by auction of parcels of land in various places. In the most bizarre instance, the bidders of land near Hitex at Izzatnagar opposite to Hitec City, were told on bidding day, that land was in fact Assigned to Scheduled Tribes. News is flying around since last few days, about Tellapur land sold to ICICI/Tishman Consortium.
The whole thing boils down to the fact that HUDA has failed and is failing, in ensuring that land it sells, is free of any encumbrances. The reputation has been dented. Already we have seen lack of confidence by bidders. For example, Tellapur Auction saw just one Bidder. Against floor price of 4 Crore the bid price was 4.21 Crore. At Golden Mile, Floor price was 4.5 Crore per acre and Average bid price was a whopping 10 Crore per acre. If HUDA had not messed up Golden Mile, Tellapur also would have seen bidding war and HUDA might have got at least Rs. 8.5 Crore per Acre. In effect, the state has LOST ~1600 Crore due HUDA's credibility loss.
APIIC (Andhra Pradesh Industrial Infrastructure Corporation)
A bit low profile unlike the other two. As part of the industrial development policy, APIIC was entrusted the task of developing Industrial and IT Parks all over the state of AP. They have been doing some good work. Several interesting Projects are being handled by them like Financial District, SEZs etc.
APIIC would allocate or sometimes auction large plots in IT and Industrial parks to companies quietly. I am sure no one heard about them auctioning land, even in the prime Hardware Park! It was all quiet! However, HUDA's success of fooling companies and taking huge advances at Kokapet, seemed to have stirred up this sleeping giant! "If HUDA can impress political bosses, why can't we? We are no less!"
And that is what they set out to do! Over the last few months they have worked hard to find a piece of litigated land to thrust down the throat of, unwary buyers. And they found two pieces of 30 acres each in Raidurg and pegged it at fancy at Rs.16 Crore an acre!
Fortunately, potential buyers had got wind of the sinister plan and stayed away not once, but on both occasions that APIIC begged them, to come and bid. Only one company from Bangalore seem to have put in a bid for 30 Acers. Nothing has been heard of it, since then! The land was under litigation when it was offered to be sold. APIIC later claimed that the Courts had not stayed Auction! (sic). They tried their best to blame Financial Year-end as the cause for buyer disinterest!
If such a reputed agency like APIIC is led into following HUDA, no wonder if developers bring up 100 layouts, on disputed land and sell them vigorously to hapless public! Lets hope APIIC would progress on the good work that it had done in the past rather than trying to emulate HUDA, in auctioning litigated land.
The unedited news can be viewed at: http://www.exclventures.com/
