Commercial use of plots is BEST shot at revival in Mumbai: Report

The firm suggested that 30%-50% commercially use of its plots could earn BEST a revenue

The global financial consulting firm PricewaterhouseCoopers (PWC) recently submitted a report to Brihanmumbai Electric Supply and Transport (BEST) undertaking on commercial exploitation of its bus depots, stations and staff quarters. It suggested that transit-oriented development (TOD) be done at 23 plots of the undertaking, including the Deonar bus depot in eastern suburbs.

Mumbai - 21st may 2013 - 84 best bus at Mayor Bangalow, Photo by Prodip Guha (Hindustan Times)

The firm suggested that 30%-50% commercially use of its plots could earn BEST a revenue of Rs1,800 crore- Rs2,200 crore or Rs2,770 crore to Rs3,360 crore. In both the cases, the construction cost of BEST facilities would be around Rs1,600 crore to Rs1,800 crore, but with waiver of FSI/TDR, sale of FSI is estimated to enhance the revenue to Rs5,170 crore to Rs6,160 crore. The BEST’s losses are in the range of Rs2,000 crore.

Facing the worst ever financial crisis, BEST had appointed PWC and Aakar Architects and Consultants (AAC) for commercial exploitation of its properties last year asking them to submit a report within eight months. The BEST had also asked PWC to advice if it should adopt public-private partnership (PPP) or self-financed development (SFD) while monetising the assets.

The report suggested to opt for combination of PPP and SFD initially, though SFD is financially attractive but capacity building will take some time. “Built internal capability in parallel, while financial strengthening enables debt-rising capability,” states the report, which also suggests that PPP projects can be structured as annual lease or revenue share or space share for better value capture.

In the report, PWC has suggested TOD, integrated transit system, which will enable multimodal transport integration, increase public/semi-public transport users, besides development of local area and decongestion as well.

The TOD sites would be at three levels— city, area and local. According to sources, under TOD, 23 locations will be connected with other modes of public transport like suburban trains, Metro, Monorail and buses. PWC also suggested the city level TOD to cater to inter-city and intra-city transport integration. The area-level TOD, where new public transport infrastructure will be created for emerging urban localities, are planned at Parel and Kandivli staff quarters.

The local-level TOD, which will be multi-modal transport integration hubs, have been suggested at nine locations including Malad depot, Bandra depot and Oshiwara bus stations.

Ravi Raja, a senior BEST panel member and opposition leader in the BMC, welcomed the report saying that commercial development will give Rs10,000 core in the next five year. “If the state and BMC are not able to help BEST, commercially using assets is the best option,” he said.