Land for Namma Railu: Incentivise participation of land-owners

With the Namma Railu project to connect Bengaluru to the surrounding towns moving forward, there is talk of ‘land value capture’ to finance it. I.e, can we find the money for this project (and others like it) by either giving additional FSI at a price to land-owners in the area, or by higher property taxes after the completion of the project?

This is a standard financing technique that is used by many countries. But in Bangalore we have a dubious record on this front. We have arbitrarily increased FSI in some areas (e.g. near Metro stations) in violation of the CDP; we have proposed to use land-banks as a form of viability gap funding (Monorail), and we have totally lost the plot on TDR. Meanwhile, not even one of the town planning schemes that BDA is supposed to carry out in 47 local areas of Bangalore has even started.

In this context, I had recently written to the Directorate of Urban Land Transport, giving my inputs on how Namma Railu should be financed and carried out. Apart from the technical details, also see the last para. (GoK makes all sorts of grand announcements without doing any of the homework needed for those announcements to be true!)

(a) Given the new conditions imposed by the revised Land Acquisition Act and the various challenges with its use in the past in any case, it would be prudent that we do not employ ‘acquistion’ as an instrument of the value capture process in the Namma Railu project. The Karnataka Town and Country Planning Act includes ample provision, tested and upheld in the courts, for the use of ‘reconstitution’ of land among property owners as an effective means of developing new areas with public participation in the financing of the project through their land-holdings. Recently, the Ahmedabad ring road was built this way. Whereas in Karnataka, our own experience with various projects linked to land acquistion has been quite poor.

(b) A ‘town planning scheme’ may be constituted for the project, alongside an autonomous Planning Authority for its zone of influence, similar to the one created for the BMIC project. This scheme – which will develop the project, and reconstitute land – may be carried out within a fixed period of no more than 18 months, during which period the re-allocation of properties is completed, and the lands needed for the new infrastructure are fully secured by the planning authority.

(c) The scheme may control land use as follows. First, building plan approvals in the jurisdiction of the planning authority shall be put on hold for 18 months, becoming automatically revoked upon the completion of the period. This will help keep the project to a disciplined timetable. Second, all unconstructed properties in the zone of influence shall be permitted only a small FSI until the notification of completion of the town planning scheme; this shall then be increased to a higher figure upon completion. This would incentivise participation of land-owners in the scheme.

(d) The scheme may capture value as follows. The extent or lands needed for the new infrastructure, and supporting auxilliary infra in the zone on influence (roads, pipes, drains, etc) shall be determined. In past reconstitution efforts in large projects, this has worked out to be roughly 9-11% of the area of the entire zone of influence.

An additional extent of land, approximately 5%, shall be assigned to the Planning Authority, in particuarly desirable locations within the zone of influence, which may be later sold to recover (partially or fully) the cost of implementing the scheme and the project. The remaining land shall be reconstituted into regularly shaped parcels among existing land-owners in the ratio of their original holdings.

(e) In this, it is particularly important that the master planning of the zone of influence should be very good. Especially key will be the planning of the proposed use of lands retained by the planning authority. If we do this right, we ought to be able to spring-board the development of towns at each of the key stops of the service, and help mitigate the crowding in Bangalore city itself. An ‘architects and urban planners’ group may be constituted by DULT to advise in this aspect.

This project has the potential to dramatically revise the way master planning is carried out in the state, a long-overdue step. With DULT’s stewardship, if we are able to bring in a measure of good urban form and function to the project, it will go a long way towards ensuring that future projects too are carried out similarly. I will be happy to assist in arriving at this outcome.

It will also be necessary to recognise the extreme shortage of qualified personnel in our planning departments to pursue this goal, and therefore an urgent first step must be to shore up the capacity for carrying out this project by hiring a number of planning staff. Indeed, the future personnel needs of the planning authorities would be very different if we adopted reconstitution as the preferred planning route to development, instead of acquisition.

One last thing. It appears that the Railways are of the opinion that there is still paperwork pending from the GoK for formal sanction and launch of the project. It would be extremely advisable to complete all of the necessary preparation for launching Phase I through the proposed SPV in the next 3 months, with the guidance and assistance of the Union Railway minister, before the model code of conduct for the general elections comes into effect, lest we lose further time in getting this much-needed project off the ground.

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About Ashwin Mahesh 17 Articles
Ashwin Mahesh has been involved in public policy for Bengaluru through his work with the Karnataka government. The views expressed here are his own. He is a member of the Lok Satta party. He is also CEO of Mapunity Information Services, and a director at Oorvani Media, publisher of Citizen Matters and India Together. He is also a visiting faculty with the Centre for Public Policy at IIM Bangalore.