KOCHI: Kerala has invited consultants for land bonds which will be issued to property owners when the government acquires their land for infrastructure projects. The consultants will counsel the state on the structuring of land bonds.
T Balakrishnan, principal advisor of Inkel Ltd, which called for applications from prospective consultants, said the selection process will be completed in around three months. The selected consultant will help the government to draw up a detailed project report (DPR) on the structuring of land bonds.
Land bonds are financial instruments to give non-cash compensation or deferred cash compensation to landowners whose land holdings are acquired by governments for building roads, bridges, ports, airports etc.
Balakrishnan said state government is building roads, high-speed railway and port project, which requires the acquisition of land from private individuals. “Our plan is to issue certificates to landowners in return for the land acquired from them. These bonds will be traded in the secondary markets, helping the original landowners get much-needed liquidity when they are in need of cash,” he said.
The Inkel principal adviser said land bonds for land acquisition is a first in the country. If things proceed as per plan, Kerala will be the first state to use land bonds for infrastructure development projects. “Globally also, not many countries have come up with land bonds,” he said.
Land bonds were tried out successfully for the first time by the Irish Government in 1925 under a specially enacted Land Bond Act 1925. Subsequently, countries such as Brazil, Guyana and Jamaica used it as an effective tool for compensation against land acquisition.
Balakrishnan said after the consultant submits the report, the land bonds will require the Cabinet’s approval. “We hope to come out with the land bonds by the first quarter of 2020 calendar,” he said.
Inkel has called for consultants for Capital Region Development Project-II (CRDP-II), which is an ambitious programme of the Kerala Government. The project is meant to “facilitate systematic and planned upgradation of public infrastructure in Thiruvananthapuram,” said a concept note on land bonds.
Under the Capital Region Development Project-II, several new projects are at the conceptualisation and development stage. These projects, include Outer Ring Road for the capital city, creation of public parking plaza at important nodal points in the city, market redevelopment, conservation and renovation of water bodies and widening to decongest city roads.