After handing over prime BKC land for Modi’s bullet train, Shinde govt doubles the bill

In 2018, it was decided that the NHSRCL will pay Rs 3,513.37 crore for the land but citing rise in the quantum of land required, the MMRDA recalculated the amount to Rs 8,889.72 crore.

Construction of the Mumbai-Ahmedabad High Speed Rail Project | Twitter | @RailMinIndia

Mumbai: Within two months of coming to power, the Maharashtra government comprising BJP and the Eknath Shinde faction of Shiv Sena handed over land at Mumbai’s plush Bandra Kurla Complex (BKC) to the Union government for Prime Minister Narendra Modi’s pet project — the Mumbai-Ahmedabad bullet train. However, the handover, which happened in August, has come at a steep cost. 

The Mumbai Metropolitan Region Development Authority (MMRDA), the state government agency which is the special planning authority for BKC, has more than doubled the total amount that the implementing agency of the bullet train project — the National High Speed Rail Corporation Limited (NHSRCL) — needs to pay for the BKC land. 

Back in 2018, it was decided that the NHSRCL will pay Rs 3,513.37 crore for the land — 0.9 hectare above the ground and 3.3 hectares under the ground. However, at a meeting chaired by Chief Minister Eknath Shinde last month, the MMRDA recalculated the amount due from NHSRCL to Rs 8,889.72 crore. Of this, Rs 4,387.98 crore is for an increased land requirement of 1.52 hectares above the ground and 3.32 hectares under the ground, according to the minutes of the meeting. 

Justifying the increase in total cost, the authority has cited a rise in the quantum of land required for the project. It has also cited the loss it will face due to the “reduced development potential” of some of its other plots after the construction of an underground bullet train station in BKC, the minutes of the meeting mentioned.

A senior MMRDA official said, “We wrote to the NHSRCL last month about the total compensation. They are yet to respond. Informally, they said they will need to first discuss this in the railway board meeting.”

The NHSRCL did not respond to ThePrint’s questions on email. 

The 508-km Mumbai-Ahmedabad bullet train will make it possible to travel between the two cities within three hours at a speed of 320 km per hour. The Rs 1.1 lakh crore project, which is being built with financing from the Japan International Cooperation Agency (JICA), will have a total of 12 stations, of which eight will be in Gujarat and four will be in Maharashtra.

Land acquisition for the bullet train project was slow in Maharashtra until the Shinde-led government took over in June this year, as the previous Uddhav Thackeray-led Maha Vikas Aghadi (MVA) government had political reservations about the project. Private land acquisition was, however, underway and has been gathering pace over the last two years. 

While the December 2023 deadline for the bullet train project will be overshot, its cost was already likely to exceed the original estimate, and now even more so with another contributing factor.

Compensation for ‘construction restrictions’

The MMRDA had on paper agreed to hand over the BKC land for the bullet train line’s terminating station in Mumbai in 2018, when BJP’s Devendra Fadnavis was chief minister. The understanding was that the bullet train station will be constructed underground and an International Financial Services Centre (IFSC), for which the MMRDA had set aside 50.31 hectares in 2017, will come up above it.

The MMRDA, however, has been struggling to get the Centre’s SEZ tag for the IFSC. 

The Fadnavis government fell in 2019 and the Uddhav Thackeray-led MVA, comprising the Thackeray-led Shiv Sena, the Nationalist Congress Party (NCP) and the Congress, came to power. The NHSRCL did not get actual possession of land until August this year. 

The revalued compensation also includes rent for 0.8 hectare that the project will need for the duration of construction on a temporary basis, as well as the market value of the potential built-up area that the MMRDA will lose due to restrictions on construction above the ground due to an underground station. 

“Although the bullet train station has been planned keeping an integrated design for an IFSC in mind, the proposed IFSC has not got an SEZ tag yet, and it is possible that in the future the MMRDA may have to use the land above the bullet train station like other land parcels in BKC,” the MMRDA official quoted earlier said. 

“The underground bullet train station will, however, bring restrictions on the construction above the ground and there could be limitations on the built-up area of the land,” he added. 

According to the minutes of the authority meeting, a preliminary study suggested that 12.65 hectares of built-up area may remain unused due to the construction of an underground station. The MMRDA has valued this based on what it says is the current market value of land in BKC at Rs 3.44 lakh per square metre. Accordingly, of the Rs 8,889.72 crore, the MMRDA is demanding Rs 4,357.27 crore as compensation for this potentially unused built-up area.

‘Loss of revenue’

In its revised calculation, the MMRDA has also taken into account land that the NHSRCL will need on a temporary basis for the duration of construction and decided to charge rent on it citing a loss of potential revenue. 

The NHSRCL has asked for 0.81 hectares of land of 3.3 metres width around the construction site for four years. 

“The MMRDA keeps hosting rallies, gatherings, exhibitions on the space, which will not be possible now for the duration of the construction of the project and so it is necessary to levy some charge on the land required for the temporary basis too,” another MMRDA official said. 

According to the minutes of the October meeting, the authority has also assumed that for the 3.32 hectares land that the NHSRCL wants underground for the bullet train station, an equivalent amount of land above the ground will become unusable for the MMRDA for the duration of the station’s construction. 

So, it has decided to charge a rent of Rs 144.46 crore (part of the Rs 8,889.72 crore) for both the land parcels and a security deposit of Rs 43.34 crore, according to the minutes. 

(Edited by Anumeha Saxena)