The Orissa State Housing Board office. Telegraph picture

Bhubaneswar, Sept. 19: The Orissa State Housing Board (OSHB) has invited proposals from private developers to build two integrated townships on the outskirts of the city. However, developers feel that increasing tie-ups between OSHB and private players will push up land prices.

Though OSHB officials maintain that public-private-partnership (PPP) projects will lead to healthy competition among local builders, private developers said it was because of such projects that land price was skyrocketing in the city.

“A real estate developer in PPP partnership with OSHB is now selling its property for Rs 3,250 per sqft at Ransinghpur. But now we find that real estate price is dipping in the city because of global recession and rising home loan rates. The prices in the Patrapada project (6.58 acres) and Ransinghpur (4.65 acres) may also go down. We also hope that by inviting outside players, we are also getting better building technologies which, in a long-term effect, can inspire better housing projects in the private sector,’’ said Bibhuti Bhusan Rout, project engineer (PPP) of OSHB.

“Studies by the Real Estate Developers’ Association (REDA) and Confederation of Real Estate Developers’ Association (India) (CREDAI) and Bhubaneswar Development Authority (BDA) show that real estate prices are dropping. But with a proposed growth rate of around 1,500 per cent in Khandagiri and beyond,as per the comprehensive development plan prepared by IIT Kharagpur, we hope that PPP projects in those pockets will be helpful in homogeneous growth of the city. The growth in Patia area is now almost stagnating without availability of any government land. Therefore, we hope the people will appreciate OSHB’s move,’’ Rout added.

“But what is being propagated by the housing body never becomes a reality. The housing project which was announced at Ransinghpur earlier this year by OSHB in the self-financing mode was priced much above the market rate. This shows that the board is no longer concerned to make available houses for lower and middle income groups,’’ said Kedar Singh, a state government employee.

On the other hand, the two proposed townships will have minimum 70 per cent built up area for housing and 30 per cent commercial space. But the PPP parties will be asked to ensure 10 per cent houses for economically weaker sections (EWS), 10 per cent for lower income groups (LIG) and 10 per cent for middle income groups (MIG).

It is being assured that if a builder can ensure more houses for weaker sections, it can get permission to have ‘more heights’, which means more flats to sell.

City-based real estate players explained that price-wise per acre rate both in Patrapada and Ransinghpur varied from Rs 3-4 crore per acre. So land price component comes to Rs 300-400 per square foot and construction cost will add up another Rs 1,000 to 1,200 per sqft. Ultimately the property price will vary from Rs 16,00-1,700 per sqft.

Keeping aside marketing and other expenses, even a private builder can sell a property at Rs 2,000 per sqft.

So when the land cost is less for OSHB then with its own construction team or in collaboration with a government agency they can construct townships for the same price. But with PPP partners, the price will be double of the actual cost.

“The OSHB people had received land from the state government at a low price earlier. But being a state-run housing body they should concentrate on their own work and not depend on auctioning out precious land to private players. This, ultimately, creates a higher price benchmarking. This remains out of reach even for the middle class,’’ said Anup Mohapatra, a senior member and former president of REDA.

“The land available for OSHB comes from the state government. As they get land at a cheaper price by providing the same plot to a private builder ensures better return, But the common people for whom housing is still a problem are forced to take the shelters in housing projects beyond city limits. They even go for house in flood-prone areas as they are cheaper,’’ observed CREDAI (Orissa) president D.S. Tripathy.