Delhi may have to wait for world-class parking lots and flyovers as meltdown-hit contractors back out

The wait for plush, automated multi-level car parks may get longer. Contractors engaged to construct such parking lots on BOT (build-operate-transfer) basis are demanding financial stimulus from the MCD and Delhi government to complete projects as they are finding it difficult to raise funds from the market.

They have threatened to back out if the government fails to inject liquidity. There are about 15 such projects underway in different parts of the city.

Such fully automatic parking lots were planned in the wake of the Commonwealth Games, 2010. Also, parking has been a major problem in the city where people have to park their cars on road in residential colonies as well as around commercial buildings.

While construction work on the first BOT parking project at Kamla Nagar is underway, 15 other such projects at Lajpat Nagar, Rani Bagh, Greater Kailash-I, Defence Colony, Karol Bagh, South Extension, Mori Gate, Greater Kailash-II, Qutub Road and Rajouri Garden are at different stages of tendering.

According to official sources, the private players are finding it difficult to raise funds from financial institutions.
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"Rentals have fallen in parking projects due to global financial crisis and banks are not investing in such projects. Secondly, the banks are treating the BOT projects as real estate for which the developer has to pay higher rates of interest. This increases the investment on part of the developer," said a senior MCD official, requesting anonymity.

"The machinery for a number of such projects has to be imported by the developers for which they will have to shell out more than their estimate," he added.

The internal rate of return of the projects, as estimated when the economy was stable, has now been dropped and developers are apprehending huge losses.u00a0u00a0

The developer of the Kamla Nagar project, SMS Infrastructure Ltd, in December, approached the MCD to grant a relief package of Rs 60 crore in the Rs 125-crore project. The MCD, initially, denied extending any relief. However, as the deadline for the Commonwealth Games is nearing, the civic body is looking at different options to bail out the developer.

Though Mayor Arti Mehra was not available for comments, it is learned that she has decided to approach the Delhi government, Lieutenant Governor Tejendra Khanna andu00a0 Prime Minister Manmohan Singh to pursue the issue.

The mayor has a reason to cheer that the otherwise vociferous Opposition led by its leader Jai Kishen Sharma is also backing her.

The MCD is asking the Urban Development Ministry to direct different agencies to "extend all possible help to the developers who are undertaking Commonwealth Games'u00a0 projects," highly-placed sources said.