Patna, May 7: The cabinet today cleared the urban development department’s proposal to construct 26,730 residential units in three cities of Patna, Muzaffarpur and Gaya under the public-private partnership (PPP) mode.

“The proposal envisages construction of 26,730 residential flats and commercial complexes in the three cities. The government would float tenders so that the project can be started at the earliest,” secretary, cabinet coordination, Brajesh Mehrotra said.

The three-city project will entail a cost of Rs 9,275 crore, Mehrotra said, adding that the entire cost would be borne by the developer. The government, he said, would not shell out a single paisa.

At least 12,538 residential flats would be constructed in Patna’s Bahadurpur and Lohianagar (Kankerbagh) localities, 12,696 residential flats would be built in Gaya’s Katari and Mustafabad colonies, while another 1,496 residential flats would come up at Damodarpur, Muzaffarpur. (See chart)

Mehrotra, however, could not state how long the project would take to be completed.

Explaining one of the features of the project, he said 70 per cent of the area had been earmarked as open area, which would be used for parks and other recreational facilities while the developer would have to carry out construction — both residential and commercial — on the remaining 30 per cent area.

Asked why a private developer would be interested in the project, Mehrotra explained that the developer would be given 25 to 30 per cent of land for construction of commercial complexes. The developer would have exclusive rights to take a decision for the sale of commercial complexes on their own terms and conditions.

The current allottees would be given the possession of the flat first. The remaining flats would be offered through lottery, he said, adding that the apartments would be given on a 30-year lease, which would be renewed upon payment of 10 per cent of the fees.

These flats would be jointly maintained by the residents’ welfare association and Bihar State Housing Board (BSHB), which would get around Rs 500-600 crore annually as part of maintenance charges.

The residential complexes would have 16-19-storied buildings, which would house two-three-and four-bedrooms units, he said, while emphasising that the rates would be much cheaper than the prevailing prices in Patna. He, however, refused to quantify the rate of the proposed flats under the PPP mode.

The construction of more than 12,500 residential flats besides commercial complexes in the capital would have its impact on the prevailing sky-rocketing price of residential flats.

Welcoming the decision, Nanhe Kumar, former state coordinator of Builder Association of India, said: “The construction of residential flats would have certainly its impact on the current high level of price of residential flats. The government’s move would push the price down of housing projects of private developers in the city.”

Kumar, who attributed the high cost of land as the only reason for the sky-rocketing price of flats in Patna, said the flats constructed under PPP mode would be cheaper as the government would provide land to the developer.