State suffers setback of ₹253 cr from Turf Club’s 91-acre lease of racecourse

Mumbai: The Royal Western India Turf Club’s (RWITC) “good gesture” of handing over the 120-acre land parcel of Mahalaxmi Racecourse to Brihanmumbai Municipal Corporation (BMC), for constructing a park along the lines of London’s Hyde Park and New York’s Central Park, has been rewarded by the ruling Mahayuti. The state government okayed the renewal of the club’s lease of 91 acres of the property in June, but at a cost to the exchequer -- it has given a ₹133-crore concession for 30 years in lease rent to the club and also waived off its dues of the past seven years amounting nearly ₹120-crore.

This translates into a setback of ₹253 crore for the state and BMC; and what’s more, the state cabinet passed the proposal despite an objection by the finance department. HT is in possession of documents related to the proposal presented before the cabinet.

After many deliberations with the state government, RWITC decided to hand over 120-acre of the 211-acre racecourse land to BMC, but when it came to the renewal of its lease of 91 acres RWITC wrote to BMC with a request to fix the annual lease rent at ₹1 crore, adding that the annual increment not exceed ₹3 lakh. It also requested the government to waive off the arrears of ₹119.99 crore that was pending in lease rent.

The proposal by urban development department (UDD) before the cabinet quoted a letter by municipal commissioner which said, “According to the government resolutions the lease rent for year 2024-25 to be paid by M/s RWITC works out to ₹5,46,34,705 and the arrears from January 1, 2017 to December 31, 2023, works out to ₹119,98,04,039. Representation received from M/S. RWITC is forwarded for taking appropriate decision.” On June 20 BMC commissioner again wrote to state government stating the “GR dated March 14 may be made applicable towards the existing built up area occupied by club be recommended for separate concessional rates.”

This did not stand the finance department’s scrutiny, as this was its response: “As per UDD’s GR the lease rent for ‘Class A’ gymkhana works out as ₹5.46 crore per year with the rate of ₹1,09,590 per square meter for total 374840.09 square meter (approximately 91 acres) of racecourse land. If the lease rent is reduced to ₹1 crore, the state government and BMC will lose ₹133.8 crores in next 30 years. So the finance department does not agree with the proposal and such demands could be raised by others in future.”

The UDD’s response which was presented to the cabinet was: “RWITC has shown “good gesture” in transferring the 120-acre of land for ‘Central Park’. That will help to complete this ambitious project in time. So it is proposed that the cabinet waive off arrears for 2017 to 2023, to apply the rate of 1% of 10% of ready reckoner rate on constructed area and apply concessional rate of lease rent for the open racecourse land, with an annual increase not above 3%.”

When HT contacted Niranjan Singh, secretary RWITC, he did not respond to calls or messages.