The Hindu   08.08.2012

VMC eyes commercial complexes to augment revenues

The cash-strapped Vijayawada Municipal Corporation (VMC) has set its eyes on commercial complexes owned by it to improve income. The corporation is contemplating augmenting its revenues through its commercial complexes and shops in the city.

The VMC has more than 60 complexes/buildings in the city that generate revenue of more than Rs.56 lakh per month.

In a way, the lease amounts of the shops would be hiked if proposals were to be implemented.The corporation leased out 3,000 shops situated in these complexes and buildings. The lease period of 12-years for many of these shops is nearing completion.

Feasibility

Municipal Commissioner Md. Abdul Azeem has asked the officials to study the feasibility of constructing a few more floors on the existing commercial complexes.

The revenue wing has been asked to assess the present revenue through the complexes and exploring the other avenues to augment the revenues. The engineering wing officials would have to assess the structural stability and feasibility of constructing additional floors. Complexes like Kaleswara Rao Market are in existence for more than two-decades.

More than ambitious plans, a big question before the officials is whether they could go for additional constructions as the Corporation had mortgaged some of its prime and most revenue-generating properties.

The VMC had mortgaged Vastralatha, I.V. Palace and K.B.N. Shopping Complex to avail itself of the HUDCO loan of Rs.100 crore.The Vastralatha, a shopping complex near K R Market in One Town, is valued at Rs.70 crore. It is the hub for textile business in the city.

The Municipal Corporation offered assets like the Ajitsinghnagar Sewage Treatment Plant and the Makineni Basavapunnaiah Municipal Corporation Stadium as collateral, but the banks wanted something with some real estate value and remunerative. So, these properties were mortgaged to avail itself of the loan facility.