Levy likely on land near Kochi metro corridor

KOCHI: The people having assets on either side of the metro corridor will have to shell out a portion of the increase in the asset value of the said properties to the government in future. The new metro rail policy approved by the Union Government has made it mandatory that a portion of the increase in the asset value will be charged as ‘betterment levy’ by the government. An official release issued by the Ministry of Urban Development in connection with approval of the policy has stated,  “states need to adopt innovative mechanisms like value capturing financial tools to mobilize resources for financing metro projects by capturing a share of increase in the asset value through betterment levy”.

A deconstruction of the contrived language of the official release plainly means that asset owners along the metro corridors will have to share a portion of the increase in the value of the assets with the authorities concerned. The statement remained silent on mechanism to determine the share and to assess the increase in the value of the asset.  A spokesperson of the Kochi Metro Rail Ltd (KMRL) told this newspaper that the idea of levying a charge for the increase in the asset value was in vogue in connection with the transit oriented development (TOD) associated with a mass transit projects. “KMRL has not taken any steps in this direction but I believe Bangalore Metro is levying a congestion fee using TOD paradigm”, the official said.

The new metro policy also called for clear idea on potential for non-fare revenue generation from the metro in the project report itself.  The focus areas identified are commercial/property development at stations, urban land owned by metro authorities, revenue generation through advertisements and lease of space. The policy also stipulates that the non-fare revenue streams should be backed by statutory support with state’s being asked to accord all required permissions and approvals in this regard. The new policy also asked states to enable low cost debt capital through issuance of corporate bonds for metro projects.