Kolkata: Infrastructure development through so-called public-private partnerships, or PPPs, has ground to a halt in West Bengal as the economic downturn forces cash-strapped private developers to stay on the sidelines and prompting civic bodies such as Kolkata Metropolitan Development Authority (KMDA) and Kolkata Improvement Trust (KIT) to stall or abort several projects.
One casualty has been the planned revamp of Bow Barracks, a run-down residential complex in central Kolkata, a former British garrison. KIT, which owns the property, is no longer sure developers will be interested.
“It is pointless to float a tender now. Auctions are drawing a blank… We would wait and launch these projects at an appropriate time,” said Asok Bhattacharya, West Bengal’s minister for urban development. To be sure, the situation isn’t peculiar to Kolkata or West Bengal. Across India, projects have stalled amid a credit crunch and uncertainty about returns on investment in capital-intensive public works.
The postponement came after KIT stopped taking rent from the 130-odd families living there.
The buildings, spread over an acre, were declared unsafe as far back as 1980. KIT wants residents of Bow Barracks to move so that the buildings could be demolished for new homes.
A blueprint for the proposed redevelopment of Bow Barracks had been prepared. Half the plot was to be given to a developer for commercial use. On the other half, a residential complex was to be built for the 1,500 residents of Bow Barracks, mostly Anglo-Indians living there for generations. KIT had obtained the consent of a large section of the residents, before the downturn caused the project to be stalled.
Another stalled project is a 100-acre business park for financial companies planned by KMDA on the eastern fringes of Kolkata. A January launch has been postponed because of lack of interest from private developers. “This was to be a prestigious project for KMDA, so (it) couldn’t afford a bad start,” said Bhattacharya.
Smaller projects such as shopping malls and multiplexes aren’t selling either, according to a KMDA official, who didn’t want to be identified, including a shopping mall and multiplex on a two-acre property in the suburbs of Kolkata that received no bids.
Companies such as Simplex Infrastructures Ltd and Ambuja Realty Development Ltd, which are partners with the state government in several projects, say they aren’t sure about returns from PPP projects in the present scenario.
“There’s hardly any support from financial institutions, plus the returns expected from these projects aren’t exciting,” said B. D. Mundhra, chairman and managing director of Simplex.
Harshavardhan Neotia, chairman of Ambuja Realty Group, said work on the PPP projects awarded to his company were going on as planned. “But in hindsight, we feel fortunate for having lost out on some PPP projects, for which people had bid very aggressively. Many of these projects are perhaps not viable anymore,” added Neotia.
Aveek Datta contributed to the story.