Indore (Madhya Pradesh): Once bitten, twice shy, the Indore Development Authority after having unpleasant experiences from its two nonstarter projects – Nayta Mundla ISBT and ISBT MR 10, has decided that now they will work on Public Private Partnership mode for two of the biggest projects in the state that is Startup Park and Convention Center with 10,000 capacity, to be built at a cost of Rs 1,200 crore and Rs 1,800 crore respectively.
This is the first time that IDA has ventured into the PPP mode for its projects.
These two prominent projects were conceived with a dream of making Indore’s bus connectivity more engaging and advanced but both the projects have proved to be non-starters as no one has come forward to operate the two projects.
IDA officials, on the condition of anonymity, said that in the PPP model the land will belong to IDA but the building will be constructed and operated by a private agency or company that wins the tender.
“It will be a completely safe play for IDA as there will be no loss but a profit for IDA as it will take a yearly a sum of money from the company, which will construct and operate the building. If IDA invests money it takes years to recover the same,” said an official on condition of anonymity.
IDA will take Rs 2 crore on a yearly basis from the company that constructs the Startup Park.
The tenure for construction of the 12 floor Startup Park building will be 48 months and will be built on 6 hectare of land out of 17 acres of land. The ownership of the remaining 11 acres will rest solely with the IDA. There are more such conditions over which the agencies have to agree and proceed for work.
Ownership of building to revert to IDA after 40-45 years
IDA believes the investor of the project will generate enough money in 40-45 years thus the ownership of the land and the building will revert to IDA afterwards, according to one of the clauses in the tender.
