With many Metro projects in limbo post rail budget, realtors fear crash

Dipak Sen, 40, a senior executive of a leading software firm in the city, was forced to dump his dream of buying a sprawling, 1,000-square-foot flat off the EM Bypass three years ago.

The reason: the prices of residential projects had shot up by leaps and bounds after the EM Bypass connecting New Garia to Dum Dum airport was announced in 2010.

But, on Wednesday, Sen saw a ray of hope as real estate giants in Kolkata are fearing a slump in real estate prices in the coming days, thanks to railway minister Pawan Kumar Bansal, who drastically slashed budgetary allocations for the proposed Metro Railway projects, thus casting a shadow on the fate of these projects.

“With the railway minister slashing the budgetary allocations for almost all the proposed Metro projects, these are likely to get delayed. This will impact the real estate projects, too,” said Harshvardhan Patodia, president of the Confederation of Real Estate Developers’ Association of India (West Bengal Chapter).

Chief minister Mamata Banerjee had announced at least four Metro Railway projects in 2010 during her tenure as railway minister.

They included those planned from Joka to BBD Bag, Dum Dum to Barasat, Dum Dum to Barrackpore and New Garia to the airport.

If one browsed through the newspapers even on Tuesday, it was not uncommon to see advertisements of real estate firms promoting and marketing their residential projects, saying that they were close to the proposed Metro Railway projects. Claims such as: “5 minutes from the proposed Metro Railway station”, or “Along the proposed Metro Railway route” had prompted the prices of residential properties to almost double – if not triple – from those of three years ago.

“Such statements are marketing strategies of realtors to attract more customers,” Rajesh Somani of Somani Realtors said.

Data from a leading commercial real estate broker, Cushman and Wakefield, revealed that real estate prices had almost doubled over the past three years along the proposed Metro routes.

“The cost of mid-level residential projects off the EM Bypass (along which the New Garia-Dum Dum airport Metro was to run) has shot up to Rs. 4,500 per square feet in 2012 from Rs. 2,800 per square feet in 2009. For high-end projects off the bypass, the rate stood at Rs. 9,500 per square feet in 2012, compared with Rs. 5,700 in 2009,” a Cushman and Wakefield official said.

At Joka, near the proposed Metro station, apartment prices had risen to more than Rs. 3,600 per square feet from Rs. 1,500 per square feet in 2009, sources said.

While the total budgetary allocation for the proposed Metro corridors was about Rs. 4,000 crore in 2012-’13, it was slashed to a meagre Rs. 529 crore by the railway minister on Tuesday.