Credit crunch takes toll on WB infra projects
Infrastructure development through so-called public-private partnerships (PPPs) has ground to a halt in West Bengal as the economic downturn forces cash-strapped private developers to stay on the sidelines and prompting civic bodies such as Kolkata Metropolitan Development Authority (KMDA) and Kolkata Improvement Trust (KIT) to stall or abort several projects.
One casualty has been the planned revamp of Bow Barracks, a run-down residential complex in central Kolkata, a former British garrison. KIT, which owns the property, is no longer sure developers will be interested.
The situation isn’t peculiar to Kolkata or West Bengal. Across India, projects have stalled amid a credit crunch and uncertainty about returns on investment in capital-intensive public works.
A blueprint for the proposed redevelopment of Bow Barracks had been prepared. Half the plot was to be given to a developer for commercial use. On the other half, a residential complex was to be built for the 1,500 residents of Bow Barracks living there for generations. KIT had obtained the consent of a large section of the residents, before the downturn caused the project to be stalled.
Another stalled project is a 100-acre business park for financial companies planned by KMDA on the eastern fringes of Kolkata. Smaller projects such as shopping malls and multiplexes aren’t selling either including a shopping mall and multiplex on a two-acre property in the suburbs of Kolkata that received no bids.
Companies such as Simplex Infrastructures Ltd and Ambuja Realty Development Ltd, which are partners with the state government in several projects, say they aren’t sure about returns from PPP projects in the present scenario.