Cash-strapped NDMC to rent out part of civic centre

The cash-strapped North Delhi Municipal Corporation is all set to lease one of its buildings in the iconic Dr Shyama Prasad Mukherjee Civic Centre in the coming days. The currently unused C-block of the Civic Centre is expected to generate revenue of over Rs 1,000 crores. Official sources said several ministries and agencies of the Central government were willing to shift to the Civic Centre given its convenient location and the large space it was offering.

The NDMC is looking forward to commercially exploit the C-block by leasing it out to a single entity for the office purpose. Earlier it had planned to rent it out to smaller commercial units like food joints, banks, ATMs and use the two spacious auditoriums for holding conferences and seminars.

But while the NDMC prepares to generate revenue to overcome financial crisis, the South Delhi Municipal Corporation (SDMC) is all set to claim its share in the revenue that the civic body will earn from the Civic Centre. Well placed sources said the SDMC officials will be writing to NDMC commissioner seeking a share of 38 per cent in the total revenue.

South Delhi Mayor Subhash Arya told Mail Today: "The C block was built as the property of MCD and not NDMC. Therefore, SDMC has a share in the revenue generated from the building."

NDMC will lease out the seven-storied building for 30 years which has an office space, auditorium with 950 seats and car space. The minimum reserve price of Rs 1,022 crore has been fixed on the basis of space available to be rented out.

While the plan to make the commercial use of the building was planned long ago, it is for the first time that the civic agency will invite bids and implement the plan. At the time of the execution of the agreement the lease premium that would be paid by the party would be Rs 234.33 crore. The annual least rent payable to NDMC would be Rs 36.338 crore for the first year and would be increased at 5 per cent per annum for the subsequent years.

"The bids will be invited soon. The last date for sending the application is August 25. The highest bidder shall be given the building for commercial purpose," said an MCD official. While the minimum price is fixed at Rs 1,022 crore, officials expect the amount to go up during the bids. The highest bidder will be given the contract.

The MCD officials added that although the project would lead to revenue generation, it would not really make a difference in its financial condition. The revenue expected to be generated by NDMC during the financial year 2015-16 is Rs 4,404.11 crore.