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State budget offers a lifeline for housing board
Source : The Hindu Property Plus Published On : 2009-02-28 City : Kochi

        It will be easier for the board now to take loans for new projects. K.A. MARTIN says the institution is firming up plans to use its property in the three major cities of the State.

        The Kerala State Housing Board (KSHB) has something to cheer about in the State Budget for 2009-10.

        With complaints of neglect in the last two budgets, the new one has offered a lifeline to the institution, established with an eye on making housing market intervention for the economically weaker sections of society.

        This is a positive budget for the housing sector as a whole and for the Housing Board in particular, says Noel Thomas, Housing Commissioner and Secretary of the board.

         Trade unions echo the optimism. The budget offers hope for the board to make a new start, says a spokesman for the Housing Board Employees’ Federation. A spokesman of Housing Board Employees’ Association welcomes the provisions which can give a new lease of life to the Board.

          However, the association’s spokesman says that are points that have to be made clearer.

          The budget says that the board can leverage its assets to generate projects estimated at over Rs.2, 000 crores, starting immediately, with participation from private companies. It assures the Board that Rs.255 crores will be made available immediately to help it meet its interest payment overdue with the Housing and Urban Development Corporation (HUD co). As much as Rs.117 crores due to the board from 40,500 beneficiaries of housing schemes before 1996 will be written off. Together with the infusion of Rs.255 crores, the writing off of the dues from the schemes mentioned above will help the board make its balance sheet look much better. It will be easier for the board now to take loans for new projects. Mr. Noel Thomas says the board has firmed up plans to use the property it has in cities such as Kochi, Kozhikode and Thiruvananthapuram to start housing and commercial complexes with participation from private parties.

           The Board has over 100 acres of land all over Kerala and half of this is in prime locations. This can attract substantial revenue for the board. However, the spokesman of the association says that real property prices are down by about 30 per cent and that using the housing property will reduce the board’s share in the proposed joint ventures and subsequently eat into its profits.

           Mr. Noel Thomas says the board will follow the example of States such as Andhra Pradesh to woo private builders to launch housing and commercial complexes. Each of the Housing Board projects on the private-public participation line can have a special purpose vehicle in which even public sector institutions such as Infrastructures Kerala Ltd. (Inkle) can participate.

One-time settlement

              The board will be able to use prime property such as its holding in Marine Drive to attract substantial private investments. On the subject of the Rs.255 crores being extended to the board, there is an opinion that there should be a one-time settlement with HUD co or the board will not be able to escape the debt trap.

              The spokesman of association says a one-time settlement will be best suited to the board. The money being advanced to the board for settling the dues with HUD co will have to be paid back once the revenue generation from the public-private partnership begins.

              The considered opinion is that with the current bout of economic recession, it is important for the government to increase its spending on infrastructure and housing to generate employment and help money circulation.

             The permission being given to the board to leverage the property it owns should be seen in this light.

              Another long-pending issue that has been addressed is the need for restructuring the board.

              According to some of the trade union leaders, one of the reasons why there were hardly any provisions for the board in the last two budgets was that its administrators were not able to submit any concrete proposals for restructuring and revival.

               As a whole, the Budget will have a great influence on the future functioning of the board; feel the trade union leaders across the political divide.

              However, there is a feeling that the revival package is not sufficient for the board to tide over all its problems.

              From the way the property belonging to the Board will be used to draw private participation to the future of the employees, there are many questions to be answered. The way the EMS housing schemes and housing schemes under the ambitious Jawaharlal Nehru National Urban Renewal Mission are being handed over to local bodies for implementation has been questioned.

              The Housing Board is the best agency in the State to implement these projects, says the spokesman of the association.

              The association asks why the Akkulam habitat project has been almost abandoned. These are issues to be addressed immediately as the board prepares to meet its future with new enthusiasm drawn from the positive aspects of the budget.

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