Land Acquisition and
Re-use for Urban Development
Shubhashis Gangopadhyay
Duke-SNU Urbanization Workshop
Duke University, October 11-12, 2014
Work
(a) Peterson and Thawakar
(b) McIvor
(c) Peterson
(d) Gangopadhyay
2
The Issues
Three main issues:
(a) City infrastructure, requiring land
(b) Reorganization of space in old cities
(c) Acquiring land for new cities
3
City Development
Old cities:
Surplus and unused public lands
Rationalization of public holdings
Acquisition of private land for infrastructure
New cities
Acquisition of rural lands
4
Largest Central Landowners
 Defense
 Indian Railways: 43,000 ha as unnecessary
 AAI: 20,400 ha of high‐value land around airports
 13 Major Port Trusts: 100,000 ha in key urban areas
5
Land Scams
 The Adarsh Cooperative Housing Society
6‐stories; for war veterans and Kargil widows
31-stories; luxury apartments
 12 acres of prime defense land around Srinagar airport
 Kandla Port Trust
6
Managing Surplus Land: Canada - 1
 Canada Lands Company
 One shareholder --- the government
 Operates at arm’s length (from government)
 As a private concern, commercially run
 Each department justifies land ownership, rest is surplus
 Surplus land is either strategic or routine
 CLC buys strategic surplus land, develops and sells
7
Managing Surplus Land: Canada - 2
 What is strategic surplus land?
 Large size could have adverse effects on local land market
 Significant potential for value creation
 PPP could generate large social and economic benefits
 Sensitive policy issues associated with property
8
Managing Surplus Land: Canada - 3
 300 employees (for 3 entities; CLC has < 100 employees)
 Parent company has one employee --- the CEO
 Has an independent board
 Answerable to Parliament through Minister of Public Works and
Government Services Canada
 Must advance (local) government policies on urban development
9
Kandla Port Trust
 Largest Indian port (in land area and volume)
 Leased out salt-pan land
 Law
Rent should be 6 per cent of capital value
2 per cent annual escalation and 8 per cent discount rate
 Of course not followed!
 Why?
Chairman of the Trust had discretion
10
Resolution of Kandla Port Trust Scam
 Centre for Public Interest Litigation --- Delhi High Court
 Court got into the act
 Average rent per acre (pre-ruling)
INR 169
 Average rent per acre (post-ruling) INR 23,249
 Increase of 11,970 per cent
 Total rent bill increased from INR 2.71 million to 218.63 million
 Discretionary clause was taken out
11
Magarpatta
 Mr. Magar owns 40 per cent of 400 acres
 120 families of 800 people
 SPV: Magarpatta Township Development and
Construction Company Ltd.
 Proportion of shares by proportionate value of land
 Centre-piece: Cybercity Magarpatta
 10 towers 4 m ft2 space for a workforce of 40,000
12,500 residential units for 50,000 people
25-acre garden, ICSE school, a 200-bed hospital
2 playgrounds across seven acres
1 million ft2 of commercial space for retail outlets
12
Coordination
Coordination
Coordination
Why No Free Markets?
 Transaction costs
 Social costs of disparate bargaining powers
 Hold-up
16
A Generalization
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