Give details of Rs 1K cr spent on IT Park, Chandigarh Administrator Banwarilal Purohit tells CHB

Tribune News Service

Dushyant Singh Pundir

Chandigarh, August 23

Expressing concern, UT Administrator Banwarilal Purohit has directed the Chandigarh Housing Board (CHB) to provide details of the substantial expenditure of Rs 1,000 crore on the IT Park project since 2005.

The Parsvnath controversy

• 2005: CHB is picked by the UT Administrator as the nodal agency to develop IT Habitat project
• 2006: UT allots 123.79 acres to CHB; Parsvnath wins bid & pays Rs 516.53 cr to CHB, gets the possession for development
• 2008: UT directs CHB to keep bid amount and revenue share received by it in joint account to be utilised for flats and other projects
• 2015: Parsvnath wins arbitration after IT Habitat project fails to take off; CHB pays Rs 572 cr, takes back possession of the land

The development came after the then CHB Chief Executive Officer, Yashpal Garg, wrote a letter in April this year, urging the UT Administration to take back the land and reimburse Rs 1,000 crore invested in the project over the past 18 years.

With the National Board for Wildlife (NBW) denying approval to two proposed housing projects at the IT Park in October last year, the CHB, in April this year, had offered to return nearly 123 acres to the UT Administration and also sought Rs 1,000 crore in compensation for expenses incurred on the projects.

Expenses incurred, as per board’s claim

• Rs 572 cr arbitration award to Parsvnath
• Rs 18.50 cr paid to UT Admn to acquire 123.79 acres
• Rs 1.11 cr conveyance deed, stamp duty
• Rs 21.69 cr spent on shifting high-tension cables

(The remaining amount spent on development, as claimed by CHB)

After approval by the UT Administrator in 2017, the CHB had planned to build 728 flats in three categories in seven-storey towers on plot Nos. 1 and 2, spread over 16.6 acres, at the IT Park for general public. Besides, it was to construct flats for MLAs and officers of Punjab and Haryana on plot No. 7.

However, the NBW in October last year rejected the CHB’s proposal to grant approval to its two proposed projects — General Housing Scheme on plot Nos. 1 and 2 and Government Housing Scheme on plot No. 7 — at the IT Park. Turning down the proposal, the NBW observed the development of high-rise buildings near the Sukhna Wildlife Sanctuary would lead to disturbance in the migratory paths of the birds.

In a letter to the Secretary Estate, UT, the former CEO had stated the chances of getting wildlife clearance are bleak and it was requested the possession of the land may be taken back and the CHB be compensated for the expenses to the tune of nearly Rs 1,000 crore it has invested on the project.

The letter further stated the CHB had also taken up development works in the IT Habitat, i.e. construction of roads, underground RCC cable trench (service duct), central green, sewer, storm and waterline, etc.

Going back to the allotment of the land, on December 1, 2005, the then UT Administrator designated the CHB as the nodal agency for the development of the IT Habitat project.

The land measuring 123.79 acres was allotted to the CHB on a freehold basis on August 24, 2006, for an amount of Rs 18.50 crore. Further, the CHB made a deed of conveyance and paid stamp duty of Rs 1.11 crore and also paid Rs 21.69 crore towards shifting of high-tension lines hindering the project.

The CHB selected Parsvnath Developers Limited (PDL) through competitive bidding as the developer of IT Habitat project on public private partnership (PPP) model with the highest bid of Rs 821.21 crore. Additionally, the PDL was to pay 30% of the share received from the sale of residential units as development fee. On October 6, 2006, the possession of 123.79 acres was given to the PDL.

In 2008, the then UT Finance Secretary directed the entire bid amount and revenue share received by the CHB belonged to the UT Administration and was to be kept in a separate joint account of the CHB and the administration. It was to be utilised for the multi-storey small flats and other specifically identified projects of the UT.

The PDL paid Rs 516.53 crore against the bid of Rs 821.21 crore. The CHB spent part of the funds on various UT projects, deposited Rs 278.56 crore to the Consolidated Fund of India and Rs 91.36 crore as income tax on account of payment received from PDL. A sum of Rs 139.81 crore was withheld owing to litigation with the Income Tax Department on account of disallowing of losses of the PDL, which failed to develop the project.

As the project could not take off due to various reasons, the PDL entered into arbitration and won the award on January 9, 2015. A revocation deed was signed on February 4, 2015.

On the recommendation of the committee comprising the Finance Secretary, UT, the CHB Chairman and the CHB CEO on January 28, 2015, approval was made by the UT Administrator on February 2, 2015, for making payment of the award to the PDL. Further, the Administrator approved that as the CHB had been acting on behalf of the administration, it had to be duly compensated for loss of interest on account of foreclosure of fixed deposits or interest on loans required to be raised for payment of the amount to the PDL in cash or by giving the CHB an opportunity to develop the land to recover its investments/losses, if any. Accordingly, the CHB made payment of Rs 572 crore to the PDL on February 4, 2015, and took possession of land at IT Park on February 8, 2015.

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