Bengal Ambuja's unique PPP model for housing
Bengal Ambuja Housing Development Ltd is a shining example of a successful public-private partnership model in the housing sector which is in a way unique to West Bengal. The West Bengal government initiated the move to rope in private sector companies to provide housing for all more than a decade ago and so far Bengal Ambuja has completed over three large and medium sized housing projects providing homes in the LIG, MIG and HIG segments.
"Government wanted to develop social housing, but didn't have the infrastructure to do it and the private parties by themselves could not take up large projects because of the land ceiling act in West Bengal. Therefore, this joint venture with the government proved to be the best route to provide affordable housing for all," an official at Bengal Ambuja says. All the joint venture companies in housing are provided land at a subsidised rate for development. This initiative has helped people from lower and middle income groups to own a house of their own at a price as low as Rs 2.5 lakh and Rs 6 lakh respectively.
Bengal Ambuja Housing Development Ltd is a joint venture between Gujarat Ambuja Cements Ltd (49.99 per cent) and the West Bengal Housing Board (49.99 per cent). Apart from the state housing board the company has also developed projects in association with other agencies. Urvashi, a project spread over 94 acres in Durgapur, was carried out in association with the Asansol Durgapur Development Authority. It joined hands with Bardhaman Zilla Parishad to create a mini township called Ulhas.
Currently, Bengal Ambuja is executing a 400-acre township called Uttorayan at Siliguri at a cost of over Rs 500 crore, and a residential condominium of about 5 lakh sq. ft at an investment of about Rs 80 crore in New Town Kolkata. Upoban, a residential condominium on nine acres with a total built-up area of about 1.5 lakh sq. ft, is coming up at Shantiniketan at an investment of about 19 crore. Shyamolima Phase-II at Raichak, Kolkata, has an investment outlay of about Rs 12 crore.
"Our focus is essentially on housing, but we see retail, leisure and IT as key drivers in future and we are equally keen in doing our bit in these areas. Kolkata is changing and so is the lifestyle of the people," says the official. Its retail project is City Centre, New Town, Kolkata, an integrated shopping mall spread across five acres with built-up area of five lakh sq. ft at a cost of Rs 150 crore.
West Bengal has attracted a large number of investors resulting in good economic growth and income levels have touched an all-time high. According to Ambuja, all this points to sustained demand for housing. Also, the retail boom has just touched Kolkata and a lot of national and international brands which don't have any significant presence in Kolkata and other major cities of West Bengal are expected to enter the state. Expectations are that the need to accommodate these brands will push up demand for retail space.
There has been a steady average increase of 10 per cent in land prices in Kolkata in the last two to three years. "But, there is quite a difference in the price rise compared with other metros. Kolkata is far behind in this race but it is fast catching up," says the Ambuja official.
[23 January 2006]