Real estate developer DLF will soon get around 5000 acres near Greater Noida at less than market rate under the Taj Expressway Industrial Development Authority’s (TEA) scheme. Jaypee group, too, has qualified for allotment of 2,500 acres, while Unitech and Punj Lloyd are in queue for 2,500 acres each.
TEA additional CEO C S Verma said that the authority will complete the process of acquisition of 7500 acres in a quarter, following which it will be allotted to DLF and Jaypee group. He said, “We are negotiating with farmers and should be able to finalize the acquisition rate in the first week of July. Once the rate is finalized, it wouldn’t take us long to acquire the land”.
TEA will transfer the land to realty developers at acquisition cost from the farmers, which is likely to be much cheaper than the market rate developers have been paying privately. The ability to buy large tract of land at a cheaper price without spending much time and energy in the process is what is driving realty players to TEA’s Special Development Zone scheme. As realty sector boomed in the past few years, land prices too surged and farmers became more demanding while negotiating a rate with developers.
Most importantly, with government shifting the onus of land acquisition on to the developers for the special economic zones (SEZ), the hardship in land acquisition increased manifold. Developers needed to acquire contiguous piece of land from farmers at market rate, which shifted the balance in favour of farmers. Therefore, developers had to commit more men, time and money in land acquisition making the entire project more expensive. DLF hasn’t yet been able to acquire the land for its 5000 acres multi-product SEZ in Haryana, according to a company spokesperson.
Unlike SEZ, special development zone does not offer any tax benefit, but offers land at a much cheaper rate and without much loss of time. SDZ scheme requires the developer to allocate 35% of its total land to a core activity, which could range from industrial activity to sport and institutional.
IT/ITeS will form DLF’s core activity, while Jaypee’s will be sport. Jaypee plans to build Formula One race course in its SDZ. Jaypee, which is building Taj Expressway, says its proposed SDZ has a synergy with company’s other projects. Jaypee has other real estate projects in Greater Noida and around the expressway and is also a contender for building the proposed airport at Jewar, 40 kilometer from Greater Noida.