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Tuesday, January 25, 2022

Rajkot civic body leases 698 affordable rental flats

RAY was launched by the UPA government with an aim of making cities free of slums by constructing pucca houses where the slums were located.

Written by Gopal B Kateshiya | Rajkot |
Updated: December 30, 2021 11:04:58 am
RMC houses in Rajkot which will be available on rent (RMC)

THE RAJKOT Municipal Corporation (RMC) has decided to convert 698 houses constructed under the Jawaharlal Nehru National Urban Renewal Mission (JnnURM), the flagship urban development scheme of the UPA government, into rental housing complex for urban migrant labourers, factory workers, students etc under the NDA government’s Pradhan Mantri Awas Yojana-Urban (PUAY-U) after these houses meant originally for slum-dwellers found no takers.

The standing committee of the RMC on Tuesday approved a proposal to lease these 698 flats of one-bedroom-hall-kitchen (1BHK) type to a private firm which will rent them to labourers, workers, technicians, students etc at a maximum monthly rent of Rs 3,000 per unit. These flats located on Sadhu Vasvani Kunj Road in Popatpara, have been identified by the RMC as affordable rental housing complex (ARHC) as per requirement of the PMAY-U, the flagship urban housing scheme of the current NDA government in the centre.

Interestingly, these 698 flats are part of the total 1224 flats constructed by the RMC under the basis services to the urban poor (BSUP) component of the JnnURM as well as under the Rajiv Awas Yojana (RAY) for residents of Raiyadhar, Kubaliyapara and Rukhadiyapara slum pockets in the city. The RMC constructed 336 flats in Raiyadhar slum and allotted them to beneficiaries. However, dwellers of Kubaliyapara and Rukhadiyapara pockets refused to vacate their slums and to make land available for construction pucca houses, civic officers say. Therefore, the RMC constructed 888 dwelling units (DUs) in Popatpara, with plans to relocate the slum-dwellers of Kubaliyapara and Rukhadiyapara there once the flats were ready. But the slumdwellers didn’t vacate their huts even after the 1BHK flats in Popatpara became available in 2017-18 and 2018-19, civic officers say.

RAY was launched by the UPA government with an aim of making cities free of slums by constructing pucca houses where the slums were located and thus rehabilitate the slum-dwellers in-situ. RMC officers say that the flats constructed in Popatpara had cost Rs3 lakh per DU. The Central government provided 50 percent funding per DU, the state government contributed 25 percent and the RMC 15 percent. The rest 10 percent, or Rs30,000 was to be borne by the beneficiary.

RMC had first floated tenders inviting bids for taking these flats on lease in February this year and IHPL was the only firm that evinced interest.

But as the slum-dwellers didn’t move to these new houses, the RMC, later on allotted 180 of these flats to BPL families. Even after that 698 remained unoccupied. In the meantime, the NDA government launched ARHCs as a sub-scheme under the PMAY-U last year as a response to large scale migration of the poor from the cities to their home states and districts in the wake of lockdown imposed to contain spread of Covid-19.

At its meeting held on Tuesday, the standing committee gave green signal to a proposal of the housing schemes department of the RMC to lease these 698 flats to Bengaluru-headquartered Irina Hospitality Private Limited (IHPL) for 25 years.

While standing committee chairman Pushkar Patel could not be reached for a comment, Rajkot municipal commissioner Amit Arora said the scheme would be make cheap rental housing available to the poor. “Reasons whatever but vacant houses that are unallotted or vacant will be refurbished and put into rental housing. There are a number of categories which are allowed to be put under rental housing scheme. At least, this will provide cheap rental housing and the investment which is required for refurbishment and making those houses liveable that will come from a private party,” said Arora.

Alpana Mitra, special city engineer (housing schemes) said that all due clearances had been obtained for repurposing these 698 flats as rental premises. “As these flats were constructed for beneficiaries of a specific class, we wrote to the Central government as well as to the state government and secured their permission to repurpose them as rental premises. The urban poor will get easy access to rented accommodation and the RMC will get some revenue from houses which were otherwise unoccupied,” said Mitra.

With this, Rajkot becomes third city of Gujarat where such rental accommodation will be available. Surat Municipal Corporation, Vadodara Municipal Corporation and Surat Urban Development Authority have already launched such schemes.

RMC had first floated tenders inviting bids for taking these flats on lease in February this year and IHPL was the only firm that evinced interest.

The private firm had offered Rs 17.95 crore lease rent to the RMC over a 25-year-long period. However, at its meeting held in July this year, the standing committee of the RMC had rejected that offer and decided to invite tenders afresh.

Accordingly, tenders were floated in September and IHPL was the only agency that showed interest in the second attempt also. However, the company increased the lease rent offer to Rs18.08 crore this time round.

The proposal forwarded by the housing schemes department of the RMC to the standing committee noted that the latest offer by the IHPL amounted to a monthly rent of Rs 863.71 per flat and recommended that the company be awarded the flats on lease for 25 years.

According to the proposal, the IHPL will be authorised to charge a maximum of Rs 3,000 rent per month to tenants. The private agency will have the liberty to increase the rent by up to eight percent every two years but the aggregate of such hikes should not exceed 20 percent in a five-year period.

As per the proposal, the IHPL will pay RMC Rs 25.63 lakh annual rent in the first year and the annual rent payment to the civic body will keep increasing every second year. It will increase to Rs 1.02 crore in the 19th year and the civic body will get Rs 1.31 crore in the 25th year.

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