The authorities displayed amazing alacrity & brusqueness during the past one-year while dealing with the Farm Houses in Delhi, both existing & the fresh supply. Agreed, the Farmhouse policy was christened ‘Country Homes’ and in it’s final avatar, the ‘Low density residential plots (LDRP)’. “The fallacy of policy making being the belief that the mere change in nomenclature can be harmless”.
The question for the landholders as well as the investors is – What’s in it for me & whether my investment into Delhi Farms is safe?
For starters, the readers of this column are as confused today, as the author, and the authorities are no better. Let me share the problems that beset this investment opportunity.
1. Multiplicity of authorities – DDA prepares the master plan, Ministry of Urban development approves 7 notifies them, MCD becomes the implementing agency, tries to get work done through the Chief town planners’ office, who waits for the respective master plan for water by the Delhi Jal board, who wait for electricity point by the private distribution companies, who wait for allotment of land by DDA !!!!!
That ladies & gentlemen, is the perfect example of a vicious circle. How does the short-term investor extricate his expectations of ‘Huge’ profits from this labyrinth of (mis) management?
2. Hastily drawn policies – After the master plan MPD 2021 was notified by DDA in Feb’ 2007, there was little or No progress till the late 2012. Suddenly, there seemed an uncanny haste to push through select portions of the MPD 2021, rather than wait for the review to end, and bring out a more holistic zonal & local area plans. These notifications haven’t been thought through, and the implementing agencies struggle for clarity or whose responsibility is vested where.
3. Existing infrastructure – Except roads, which largely are still private in nature, infrastructure is a mere word in the tony areas of farm houses, which are being sold upwards of 20 crores per dwelling unit. The DDA, MCD & revenue department is not in consonance about the roads & other infra created on private land.
4. New Infrastructure – Social & Physical – It’s Ok to christen certain number of villages as LDRP villages, but no thought seems to have been spared for the infrastructure. When a certain area is being re-densified, provisions for roads, water, sewer, and other trunk infrastructure have to be created. Where would the land for these amenities come from?
5. Town planning norms – There seems to be a general perception that the multiple authorities seek to push the envelope into the others’ domain, and avoid ‘belling the cat’. Ignoring the problem don’t solve them, always, especially on urbanization. Unless consonance is achieved, the layout plans, building sanction plans & other mandatory approvals cannot be achieved in the short run.
6. Impatient investor(s) seeking quick returns – Many a recent investors into the MPD Green belt opportunity have jumped in without expert assistance, and have been promised abnormal returns, within impractical timelines. The fact is, those who are investing today need to be sure on their exit, rather than get swayed by the promised profits.
7. Lack of experts – There aren’t many who can advise on the entire spectrum of services on DelhiFarms, encompassing the various notifications, some contradictory, and assist the investor meet his desired IRRs. Also, the landowners who might be stuck holding onto multi million $ worth of land assets, which can get converted to residential dwelling units, seek experts who can successfully assist in the same.
This post is not a scare, nor ‘throw in of the towel’, but a pragmatic post on the problem as on date. However, with the private sector expertise coming together voluntarily, and assisting the government (if only they can seek on time), this too shall be overcome.
We continue to be motivated by Mark Twain’s advise ~ “Buy Land, they don’t make em’ anymore”