MC finds auction the way out of financial crisis | punjab | Hindustan Times
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MC finds auction the way out of financial crisis

punjab Updated: Jan 07, 2013 23:20 IST
Arjun Sharma

The cash-strapped municipal corporation of Ludhiana has found public auctions as an effective way to fill its coffers, including putting under the hammer property like land and shop-cum-offices (SCOs). The civic body has so far earned nearly Rs 60 crore from these auctions.

Due to fund scarcity, several MC projects of public importance were at a standstill for the past long time. The MC did not even have funds to pay contractors, who in turn stopped work on these projects.

However, municipal commissioner Rakesh Kumar Verma held a series of discussion with senior officials and arrived at the conclusion that the auction of MC property was the only way to bring the civic body out of the financial crisis. And he has been proved right in view of the money rake in by the MC through auctions.

Meanwhile, the MC would hold auction of 16 more SCOs near Keys hotel in Shaheed Bhagat Singh Nagar on January 22. The reserve price of each SCO plot has been pegged at Rs 1.5 lakh per square yard. Each SCO has a covered area of 100 sq yard.

On November 26, when the MC auctioned 21 SCOs, the highest bid was Rs 1.78 lakh per sq yard. On the other hand, the auction of nine SCOs on December 26 fetched the highest bid of Rs 1.96 lakh per sq yard.

The bidders are supposed to deposit 10% of the final bid within 24 hours. Another 15% have to be given within 30 days and the remaining 75% in six instalments.

A senior MC official involved in these auctions said that the move was the most innovative measure to gather much-needed funds for developmental works of the MC. "These auctions will continue even in future so that the MC can generate funds," said the official.

Auction revenue in past
On November 26, the auction of 21 of the 30 SCOs were sold for Rs 32 crore.
On December 26, nine more SCOs were sold for Rs 15 crore.
On December 24, residential 9,820 sq yard was sold for Rs 10,700 per sq yard which was situated on Hambran road near dairy complex.