Boost to Non-Fare Revenue as State Approves Freehold Transfer of 28 Land Parcels to Maha Metro
Maharashtra Metro Gains Ownership, In a significant move aimed at bolstering its financial sustainability, the Maharashtra government has approved the transfer of ownership of 28 land parcels in Pune and Pimpri-Chinchwad to the Maharashtra Metro Rail Corporation Limited (Maha Metro). This decision converts the status of these plots from leasehold to freehold, granting Maha Metro full ownership and paving the way for commercial development to enhance its non-fare box revenue.
Freehold Status Empowers Maha Metro for Commercial Projects
The urban development department issued a government resolution (GR) last week, formalizing the transfer of 20 land parcels owned by the Pune Municipal Corporation (PMC) and eight by the Pimpri Chinchwad Municipal Corporation (PCMC) to Maha Metro. These plots were initially allocated under a 30-year lease agreement for the first phase of the Pune Metro project.
With this new directive, Maha Metro will now possess complete ownership of these strategically located land parcels. This crucial shift enables the Metro authorities to attract long-term private investment through public-private partnerships (PPP) for the development of substantial commercial establishments.
Overcoming Investor Hesitancy with Long-Term Ownership
Maha Metro officials had previously expressed concerns that the short 30-year lease agreement was deterring potential investors for large-scale commercial projects. Hemant Sonawane, executive director (administration and public relations) at Maha Metro, explained that investors were reluctant to undertake significant construction on land with a limited lease period, as it impacted their potential returns. The agency had requested either a 60-year or perpetual lease to make these ventures more appealing.
“Investors were hesitant to commit to projects on land with only a 30-year lease. Full ownership or a long, perpetual lease was essential to ensure returns on their investment since they will build the whole structure from scratch,” Sonawane stated.
Strategic Commercial Development Planned at Key Metro Stations
Maha Metro intends to develop significant commercial spaces at major Metro stations like Civil Court, Range Hills, and Vanaz. These establishments, planned within the Metro station premises, will be rented out, generating a consistent stream of non-fare revenue. Smaller commercial shops already operational at other stations will continue under short-term agreements.
Cross-Subsidization and Affordable Fares on the Horizon
This strategic move towards commercial development is expected to significantly boost Maha Metro’s non-fare box revenue. This increased income will play a vital role in cross-subsidizing operational costs, ultimately allowing Maha Metro to maintain affordable ticket fares for commuters.
Nagpur Follows Suit with Land Ownership Transfer
The government resolution also includes a similar directive for Nagpur, instructing the Nagpur Municipal Corporation (NMC) and Nagpur Improvement Trust (NIT) to transfer ownership of 20 leased land parcels to Maha Metro. This synchronized approach underscores the state’s commitment to strengthening the financial foundation of both the Pune and Nagpur Metro projects.
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Ensuring Financial Sustainability and Loan Repayment
The urban development department emphasized in the GR that Maha Metro is responsible for repaying loans secured from international banks for the initial phases of both the Pune and Nagpur Metro projects. Facilitating the commercial utilization of these land parcels is therefore deemed critical for ensuring the long-term financial sustainability of the Metro operations and the timely repayment of these loans.
The joint secretary of the UD department has directed the PMC, PCMC, NMC, and NIT to expedite the necessary formalities for the land transfer, highlighting the urgency and importance of this initiative. This move marks a significant step towards enhancing the financial viability and long-term success of the Maharashtra Metro projects in Pune and Nagpur.
