CRDA finalises base price for Amaravati's theme cities

By Times Of India on 16 Oct 2017 | read
AMARAVATI: The Capital Region Development Authority (CRDA) has finalised the base price of land per acre in nine thematic cities of Amaravati. The prices will range between Rs 4 to Rs 4.1 crore. According to the standing orders for AP CRDA on land allotment policy , it is necessary to fix the base price and reserve price of land. While the base price per acre of land in the capital area is Rs 4.1 crore, the price varies for the thematic cities.

While the base price in the electronics, justice and knowledge cities has been pegged at Rs 4 crore per acre, the same has been fixed at Rs 4.1 crore per acre in the finance, government, health, media, sports and tourism cities. The CRDA has estimated its land procurement cost at Rs 1.2 crore, Tier-II infrastructure and financing cost at Rs 2.2 crore and Tier-II infrastructure cost at Rs 60 lakh in case of cities where the land cost is Rs 4 crore. The rate of Tier-II infrastructure cost is slightly high at Rs 70 lakh for cities where the base price of land is Rs 4.1 crore.

The base price has been fixed as per `present worth concept'. According to this formula, the price is decided after calculating all previous expenditures incurred and compounded till date, adding the discounted cost of all future works (adjusted for inflation), computing the sum of the total costs of all these, and taking into account the net saleable land. The CRDA will consider the 10% discounting or compounding factor at a later stage.

In addition to this, there will be a reserve price on the land per acre. The standing orders mention that the base price will form the basis of the calculation of reserve price of each city. The guiding principle of the reserve price is the `cost-plus concept' wherever possible.

The reserve price will also be set differently for different types of land use. The standing orders mention that "the reserve price helps in making the city financially sustainable as the surplus from any one area may be used to cover the deficit in other nodes where land may have been allotted at less than the break-even price." The order mentions that both approaches can be adopted in fixing the price.

However, the CRDA can relax the prices based on the institution which approaches it for land allotment depending on the merit of demand and worth of that institution. In such cases, both the base and reserve price can be revised by the urban authority .