Mumbai Port Trust hikes its rent rates

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By ME Bureau

In a major announcement Ravi Parmar, Chairman Mumbai Port Trust (MbPT) has said that it has hiked its rent rates by three to eight times for its lease-hold properties at major locations across the city.

He said, “The board of trustees has approved a hike that will be 6% of the ready-reckoner rates. We hope to net Rs 800-1,000 crore as per the new calculation.There are more than 2,500 such properties, including Metro House in Colaba, The Taj Hotel at Gateway of India and a building in Ballard Pier. The new rates will be applicable with retrospective effect from 2012.

Property rents have not been revised since 2006, when MbPT had decided to calculate rent on the basis of 6% of the ready-reckoner rates. Port officials said even though property owners earn a lot by sub-letting premises, they are reluctant to pay rent, which is 10-15 times lower than the market rate. "Despite the proposed revision, the market rate in these areas is higher by two to three times," said one of them.

MbPT first tried to fix the rate as per the market rates based on a survey and valuation by Kirloskar Consultants in 1982. After two decades of litigation, the Supreme Court came out with a compromise formula that allowed rentals to be fixed on principle guidelines and scale of rate to strike a balance between profit and interest of tenants. Many tenants refused to pay even though the rentals were low. Parmar said, "There are properties whose rents are less that the salary paid to maids." According to a board member, the port has a Rs 400 crore lease fee due for recovery from over 2,500 lease-holders and another Rs 700 crore fee is under dispute.

Besides this, Rs 1,100 crore is pending recovery, the calculation based on old lease rates, and another few hundred crores as per new lease rates, are to be recovered. This puts MbPT's total loss of lease rent over the last 99 years to around Rs1,500 crore. The officials pointed out that MbPT had formed more than 12 teams of officials to monitor and assess violations and take action against the lease-holders.

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