In MCD-Metro war, casualty is 75 acres of prime Delhi land

This is part of the land that the Delhi Metro Railway Corporation got from the government — to build the Metro — on concessional rates. Whatever was surplus, like these 15 plots, the DMRC was allowed to develop. So beginning September 2003, it auctioned leases of these plots to four developers for both commercial and residential use. The last auction was in March this year.

But no work can begin as the MCD is refusing to clear developers’ building plans and layouts unless the DMRC coughs up the tax.

MCD argues that DMRC got prime property at throwaway prices and is making money by leasing it out, indulging in “heavy commercial development” at its stations.

DMRC, in turn, quotes the Delhi Metro Railways (Operation and Maintenance) Act 2002 to say it’s not required to pay property tax to MCD. It also cites the Indian Railways Act, 1989 which has the same provision. Both face off in the Delhi High Court tomorrow.

As for the builders, they are caught in between. “We have submitted all our plans for approval but due to absence of clarity between DMRC and MCD, we are all stuck,” says an MGF spokesperson not wishing to be named.

Similar is the plight of Uppal Housing. In September 2003, the same time that MGF got its Khyber Pass plot, Uppal bought a 21,954-square m plot near the Dwarka Mor Metro station for a group housing residential complex. Four years down the line, it is waiting for MCD clearance to start construction.

The price of this MCD vs DMRC war is rising. “This is all Grade A land which is generally not available in this city anymore,” says Jayant Verma, executive director (north) with Knight Frank (India) Private Limited. “The location is prime and a lot is riding on the development of these plots. It will impact the commercial value of these areas. The longer the delay, the more it will push up construction cost. The real question is how much delay.” The answer to this question is still not clear. In one of its string of letters to DMRC and MCD, Uppal Housing said: “Refusal of MCD (town planning department) to approve/sanction our building plans and layout…question(s) the vesting of legal title by the DMRC. All these have resulted in huge financial losses to us and our business reputation and goodwill is at very high stake.”

The MCD disagreed. At a meeting in January 2007, it rejected Uppal’s request saying the auction itself violated the terms on which land was allotted to DMRC. All other plans are being similarly rejected. For Parsvnath Builders, which bought seven plots for commercial development — it also has the contract for the Games village and the Akshardham Metro station — this has been a big blow. “All our plans for Delhi are on hold,” says a company official. “It all depends now on what happens to the MCD-DMRC battle.”

DMRC is aware of what the developers are going through but claims it can’t do much. “It’s for developers to approach local authorities to sort out whatever issues are holding their projects. DMRC won’t like to say anything else since the matter is sub judice,” says Anuj Dayal, DMRC spokesperson. Ask Delhi CM and she says just the opposite .

But wasn’t her government that gave land to DMRC in the first place and isn’t the MCD now standing in the way? “Our tax structure is streamlined, the issue needs to be sorted out between DMRC and the builders. I have not yet received any representation but I would definitely want to resolve any problem that hampers development.”

(Part Two: MCD vs DMRC: behind the battlelines)