VIJAYAWADA: Decks have been cleared for a mega shopping mall and multiplex to come up on the 3,248 square yards of vacant land at APIIC Colony and an apartment complex on 1,800 square yards of land at Brindavan Colony.

The Vijayawada Municipal Corporation has selected bidders for the two projects to be taken up in the Public Private Partnership (PPP) mode. Indo-African Industries, a consortium of companies, will execute the shopping mall-cum-multiplex, while Vinayagar Constructions will take up the apartment complex.

The two companies have been selected on the basis of some rigorous criterion adopted under the expert advice of APITCO Limited, based on the response received for the notification issued in April.

The highlight of the shopping mall-cum-multiplex project, according to VMC Commissioner Natarajan Gulzar, is that the shopping mall will be of a total carpet area of 70,000 square feet, spreading over ground floor and two floors. The multiplex will come up from the third floor to sixth floor. There will be two levels of parking, one in the cellar and another in the sub-cellar. The entire project will cost Rs. 10.5 crores.

Best deal

Mr. Gulzar describes it as the best deal that the corporation could ever strike, as the VMC will make Rs.16.75 crores during the total lease period of 33 years from the deal.

Even if calculated at 10 per cent inflation, the net present value of the deal will be Rs. 3.41 crores. "Even if we sell away the land, we can at the most get Rs. 2 crores to Rs. 2.5 crores," he says. The immediate cash flow will be in the form an upfront fee of Rs. 10.5 lakhs, which is 1 per cent of the project cost.

There will be an Additional Development Premium (ADP), which will start flowing to the corporation from the fourth year of the grounding of the project, so as to give 18 months of time for construction and another 18 months for stabilisation.

The first instalment of ADP, i.e. Rs. 11 lakhs, will accrue to the corporation in the fourth year and it will go up to Rs. 53.45 lakhs by 33rd year. This will total to Rs. 7.87 crores.

The lease amount will start coming in from the first year itself, beginning at Rs. 10.96 lakhs and going up to Rs.52.24 lakhs. This will total to Rs.8.77 crores.

Printer friendly page  
Send this article to Friends by E-Mail