Screwed by the Government

This is an interesting story of a prime property in Hyderabad city, which has seen many a twist and turn.

During the famous rule of Sri YS Rajasekara Reddy as CM, then government of AP decided to auction various properties of Hyderabad and it's surroundings by public auction for development into various categories. Only issue, as realised much later by the successful bidders, with these auctions was the lack of clarity on the background of these properties and or no clear vision on the likely impediments for the planned development.

LANCO hills has the issue of WAKF land sitting around its neck, where politician after politician using the blackmailing tactics on the developer irrespective of the fact it was a government auctioned site, which is supposed to be a clean sale. Similarly the land that was auctioned in Kokapet by the government, which got later embroiled in litigation on ownership, the buyers are not even able to get their monies back from the government for the reasons best known to all of us 'Speed money demand'.

I am more keen to discuss the famous triangular plot in the heart of the city. Here lies a plot measuring about 6 acres abutting the famous green corridor KBR park and positioned in the 'Çheck post' junction of Jubilee Hills.

The plot was put up for auction on 21^st Feb 2006 with offers from bidders having stopped at Rs.1,35 lakh per Sq. Mtr, they opened the sealed bids which surprisingly had a bid for Rs.1.42 lakh per Sq. Mtr (Which roughly translates to Rs. 1.18 lakh per Sq. Yard), which was the highest transaction value in those days in the given area.

Government having got a sale value of Rs.333.70 crores from this sale, was quite happy. The successful bidders were told they can do any kind of development in that place. Bidding consortium being Nagarjuna Construction Company, Maytas, ICICI. The consortium then started working on the project and wished to build a high rise commercial complex.

Problem 1: Being a prime piece of land that was auctioned with a 'Áll Go' statement by the government, the bidders went without a worry and offered the highest price. Once they firmed up their plans and sent the plan for approval to the competent authorities, they were told they cannot have a building higher than 3 or 4 floors, this being in the funnel of the air traffic of Begumpet airport, the then primary airport of the city.

Problem 2: One of the consortium partner Maytas went into a huge turmoil after its associate company Satyam founder chairman B Ramalinga Raju, confessed to accounting malpractices in Jan 2009 in a letter t the SEBI.

Google Earth Images of the said property from 2005 to 2015

The Begumpet airport became only a VIP and Air force airport from March 2008 after the opening of the Rajiv Gandhi International Airport in Shamshabad. However considering the 'Funnel' route there was no improvement in the plan sanction. Meanwhile Maytas started going into further problems with its accounts being seized and assets being attached etc. Maytas was taken over by IL & FS and named as IL&FS Engineering company.

Finally Mantri Developers of Bangalore walked into the consortium as a developer in December 2011 and decided to change the plan to a high end residential complex and targeted a price of 13 to 15 k per sq. Ft of constructed area. Building height was reduced to the statutory needs and construction work started in right earnest. Other builders / developers were waiting for the success of this project as it would have created a new benchmark for pricing in the heart of the Hyderabad city, the much wanted improvement in a city which went through the separate state agitation and suffered in brand image.

Luckily the pace of work picked up in 2014 as the new Telangana state was formed and the new government was in place. Here started the travails for the consortium. The new government had its own vision for the city and the new state. In the process the CM of the state Sri K Chandrasekar Rao wanted to make the city of Hyderabad a no signal city by building flyovers across the city where today there is congestion.

Jubilee hills near the Check post^th of May 2015 asking for stoppage of work at all projects where (Including the ones where plan approvals are in place) these flyover projects are proposed to come up.

junction happens to be one such place where government wants a new flyover. They issued a fresh GO on the 30

Now this project is one of those affected by this GO, for the consortium as they are licking their wounds of 2006 this bolt from the blue, is a bigger threat, as until government decides on the design of the flyovers, they cannot progress on their plans. Even some of the luxury apartments they managed to sell will get delayed.

Would you call this triangular plot a 'Jinxed' plot or something else and would you not categorise it under the 'Government f**ks me' category as far as the developers are concerned. They could be big and might be able to manage their way, but the interim delay cannot be compensated by anyone.

(This article is based on inputs from industry players)