3 days ago
Public utility site-holders in Bengaluru get conditional interest waiver of 100%
Bengaluru: To ease the financial burden on institutions holding public utility sites, BDA has announced a 100% waiver on outstanding interest, provided the principal amount is fully paid.
The decision comes as several prestigious institutions, including educational organisations, hospitals, religious institutions, and commercial entities, failed to renew their leases and clear their dues, resulting in financial strain on the authority.
Despite leasing sites for 30 years, many organisations have accumulated arrears ranging from Rs 5 lakh to Rs 50 crore because of failure to pay lease amounts in a timely manner.
According to BDA officials, the total outstanding principal stands at Rs 135 crore, while interest dues have mounted to Rs 207 crore.
A senior BDA official said: "Many institutions sought relief, arguing that the interest burden makes repayment impossible. After careful consideration, we decided that waiving interest for those who pay the principal in full would be the best way forward."
The BDA has set a deadline of 120 days for organisations to renew their leases.
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Failure to do so will lead to interest escalation.
A senior BDA official emphasised the urgency of the situation: "This is the final opportunity for organisations to clear their dues. If they fail to act within the stipulated time frame, the interest will continue to accumulate, and exemptions will no longer be offered."
Under the BDA Act of 1976 and BDA (Public Utility Site Allocation) Rules of 1989, land is leased for public utilities, including hospitals, educational institutions, clubs, petrol pumps, burial grounds, and religious sites.
Leaseholders are required to renew their lease within 90 days after the term ends. However, officials acknowledged enforcement has been challenging. "Although the law allows us to reclaim sites for non-compliance, no lease has been cancelled because of the influence of major institutions.
This has resulted in massive financial losses for BDA and hindered crucial development projects," the senior official disclosed.
With crores of rupees in unpaid dues, BDA has been struggling to fund infrastructure and civic development projects. Officials confirmed that a similar waiver was granted in 2022, which allowed nine institutions to clear their debts, leading to Rs 4.8 crore in interest payments and Rs 7.5 crore in principal lease settlements.
"This move is expected to provide much-needed relief while ensuring BDA recovers its funds," an official said.
"We hope institutions will utilise this final chance to settle their dues and comply with legal requirements."
With over 75 major institutions and approximately 1,500 small and medium-sized organisations failing to comply with lease renewal requirements, BDA officials are urging all defaulters to act swiftly. "If institutions fail to clear their dues within the 120-day window, there will be no reconsideration. BDA will take necessary action to recover outstanding amounts," another official said.
