UT contemplates hike in conversion fee | chandigarh | Hindustan Times
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UT contemplates hike in conversion fee

chandigarh Updated: Nov 28, 2013 13:00 IST

The conversion policy of the UT administration is all set to raise hackles for the industrial plot owners with the authorities contemplating manifold increase in conversion fee.

A committee headed by Chandigarh Housing Board (CHB) chairman Satya Gopal, during a meeting held last week, reached a consensus to increase the conversion fee to around Rs 45,000 per sq yard, which at present is Rs 29,713 per sq yard. The move would certainly raise hackles for around 100 industrial plot holders, who opted for the policy.

The administration had constituted the committee in the wake of an objection raised by the Comptroller Auditor General of India (CAG), pointing wrong calculation of the conversion fee, which left the administration poorer by Rs 166 crore.

According to senior officials, at the time of formulation of the conversion policy in 2005, the auction branch of the estate office did not take into account two auctions that of a hotel site near IT Park and another of a commercial site in Industrial Area.

The UT administration has earned over Rs 1,000 crore as conversion fee till date.

What CAG said

The CAG report last year had pointed out that the estate office charged fee at the rate of Rs 29,713 per sq yard against the actual conversion fee which came to `50,413 per sq yard, thus causing loss to the tune of Rs 166 crore.

What conversion entails?

The administration had introduced ‘Chandigarh conversion of land use of industrial sites into commercial activity or services in industrial area Phases 1 and 2’ scheme vide notification issued on September 19, 2005. The scheme was initially floated for two years, but later extended for six months. The policy was withdrawn on March 18, 2008.

The administration initially charged Rs 20,000 per square yard as conversion fee, which was enhanced to Rs 29,713 per square yard for applicant whose applications were received on or after December 18, 2007. Before that, around 75 industrialists had availed of the scheme on old rate by paying 10% earnest money and balance in form of post-dated cheques.

The administration had worked the rate of Rs 29,713 per square yard after taking into consideration the price fetched in the last three auctions. Unhappy with the decision, the affected industrialist appealed to the administration, urging it not to charge higher conversion rate. After failing to get a favourable response, the industrialist moved the high court to challenge the UT administration’s decision on higher conversion fee.