Mumbai: In April 2007, J.N. Patel, a Bombay high court judge, struck a deal with Mumbai-based Hogwood Commercial Developers, the real estate arm of Provogue India Ltd, to sell 44 acres of land owned by his family on the outskirts of Nagpur for Rs crore.
The deal was reported widely, signalling Nagpur’s transformation from a sleepy provincial town to a city alive with commercial promise.
More land deals in and around the zero-mile city, so-called because it’s located in the geographic centre of the subcontinental land mass, took place in quick succession, anticipating that the proposed multinodal international cargo hub at Nagpur (Mihan) would transform the economic landscape of the Vidarbha region, infamous for farmers’ suicides.
But delays in the implementation of the project seem to have put a halt to the rise in property prices.
Sprawling across 4,354 ha (hectares), Mihan envisages an international passenger and cargo hub, a multi-product special economic zone (SEZ) and various industries that will seek to take advantage of commerce that is likely to be generated by a transport centre.
Ahead of the last general elections in 2009, three political leaders sought to take credit for bringing the project to the orange city.
They were then civil aviation minister Praful Patel, Bharatiya Janata Party (BJP) national president Nitin Gadkari and Union minister and member of Parliament (MP) from Nagpur, Vilas Muttemwar, of the Congress party.
Maharashtra’s economic survey for 2010-11 even said that the project would attract $20 billion (around Rs 90,000 crore) investment over the next five years and create 120,000 lakh direct jobs with around 300,000 lakh being employed indirectly.
The project is being developed by Mihan India Pvt. Ltd (Mihan-IPL), a joint venture of the government of India-owned Airport Authority of India (AAI) and Maharashtra government-owned Maharashtra Airport Development Co. Ltd (MADC).
At least 50 companies, including American aircraft manufacturer Boeing Co.’s local unit Boeing India, Mahindra Satyam, HCL Technologies Ltd, DLF Ltd and Tata Consultancy Services Ltd bought 700ha of land in the proposed SEZ. None of the companies has started work at their sites yet. Boeing India president Dinesh Keskar said the MRO facility was on track and would be ready by December with two hangars for repairing planes.
The aircraft manufacturer has committed to investing $100 million to develop the MRO facility for Air India, which is buying 68 planes from Boeing.
“At this juncture, the company won’t (be) able to offer any timeline regarding starting operations at Nagpur,” said an HCL spokesperson.
Growth dreams: A Mihan project hoarding near Nagpur airport. Maharashtra’s economic survey for 2010-11 says the project could attract $20 billion investment over the next five years.
The other companies mentioned above didn’t respond to queries about their plans.
Shapoorji Pallonji and Co. Ltd started building a software park but has stopped work and closed its site office. The company didn’t respond to requests for comment.
Boeing was to set up its maintenance, repair and overhaul (MRO) base to cater to planes of airlines in south and southeast Asia but work has not yet begun at the site.
U.P.S. Madan, MADC vice-chairman and managing director, is optimistic. “The SEZ project did not take off as many companies put their expansion plans on hold following the 2008 crisis but I have met the firms recently and they are still keen on the project,” he said.
The airport project needs 150 acres of land for which Madan is negotiating with farmers.
“We need to invest hugely in the airport project and the lease rental received from companies in the SEZ will come in handy,” he said. “We plan to aggressively market the SEZ.”
Vilas Kale, president of local industry body, the Vidarbha Economic Development Council, has been pushing the state government to market the project. “The government must expedite the process to build the international airport,” he said.
Muttemwar, the local MP, blamed the state government and civil aviation ministry for the delay. “The feasibility report of the project was received by the state government in 2002 and it appointed MADC as a nodal agency but the civil aviation ministry took six years to transfer the Nagpur airport to the joint venture,” he said.
Former aviation minister Patel said the state government was responsible. “The airport was handed over to Mihan-IPL three years ago but the state government did not take any initiative to start it.” He also said that it was his persuasion that led Boeing to locate the MRO facility in Nagpur in order to make the international airport project viable.
As civil aviation minister, Patel would have been in a position to influence Boeing at a time when the US plane maker was negotiating to sell planes to state-run Air India. Mihan isn’t facing much resistance over land acquisition with farmers quite willing to sell provided they are compensated at the market rate. Out of 4354ha. of land required, nearly 3500 ha. is already in Mihan-IPL’s possession.
“We will not give up possession till we are adequately compensated for the project,” said Baba Daware, a farmer from Shivangaon village.
Justice Patel’s family sold the land at Rs 2.38 crore per acre. Daware wants at least half that rate but the government is not willing to offer more than 5%. Elected representatives from Nagpur had initiated a dialogue between farmers and the state government and reached an agreement on the compensation package in 2008 but the government has not implemented it as yet, said local Member of the Legislative Assembly Devendra Fadnvis.
Uncertain future: Shapoorji Pallonji and Co. Ltd, which started building a software park, has stopped work and closed its site office.
With the Mihan project yet to make headway, property prices have stalled after having risen in Nagpur and its neighbourhood.
Stamp duty collections show the trend in transactions over the years. According to the office of the inspector general of stamp duty and registration this amounted to Rs 227.11 crore from 82,437 property transactions in fiscal 2010. In fiscal 2011, Rs 297.47 crore was collected as stamp duty from 94,185 deals. In the quarter to June, Rs 79.62 crore was collected in stamp duty from 24,646 transactions.
Higher government salaries after the implementation of the Sixth Pay Commission’s recommendations and new employment opportunities at the Buttibori industrial estate were responsible for the rise in prices, said Anshuman Sahstrabhojani, a Nagpur-based builder.
The rise in property prices has halted for the time being and many Mumbai and Nagpur-based builders, who bought large land parcels on the outskirts of the city, have put their plans on hold till the Mihan project shows some progress, he said.
The boom has also led to some of the constructions coming under a cloud, according to Anil Wadpalliwar, a social activist.
He’s filed a public interest litigation saying that at least 3,500 unauthorized flats outside Nagpur Municipal Corporation limits have been built with no water supply, sewage disposal system or access roads and should be demolished. The Nagpur bench of the Bombay high court has asked the district collector to conduct an inquiry into the matter and submit a report to the court.
P.R. Sanjai contributed to this story.