Syndicate-free bidding yields huge rent for small shop

150 sq.ft. fetches a revenue of ₹1.11 lakh to Ponnampatti panchayat

According to the 2011 census, the population of Ponnampatti town panchayat, located about 60 km from here, is 12,166.

The floating population is low when compared to other town panchayats such as Mannachallur, Musiri, Thottiam and Lalgudi in Tiruchi district.

But the panchayat has sprung a surprise by auctioning a 150 sq.ft. shop for a huge rent at Thuvarankurichi, one of the villages in the town panchayat.

The shop fetches a revenue of ₹1.11 lakh to the town panchayat a month, said to be the highest rent for such shops in town panchayats in the State.

Moreover, it is reportedly several times higher than the rent being collected for the same kind of space in leading cities and towns such as Tiruchi, Thanjavur, Pudukottai and Perambalur.

Until recently, the local body was getting ₹20,500 per month by renting out about 390 sq.ft. of commercial space. The shop was in possession of a person for about nine years.

Claiming that the tenant had flouted terms and conditions, the civic body served notice to him to vacate the shop. However, he took the matter to court. After a successful legal battle, the civic body took the shop under its possession and conducted an open auction a few months ago by dividing it into two.

The auction saw the participation of a record number of bidders, thanks to the introduction of riders that ultimately scuttled the syndicate in fixing the rent. Finally, the 150 sq.ft. shop was auctioned for a rent of ₹1.11 lakh per month. The successful bidder runs a bakery in the shop. The other portion, measuring 240 sq.ft., was auctioned for ₹86,000.

S. Sakul Ameed, Executive Officer, Ponnampatti town panchayat, told The Hindu that the transparent auction process prevented syndicates and saw a 15-fold increase in the bids. The new tenants were paying rent regularly. Moreover, they deposited the rent in advance as per the terms and conditions.

Mr. Ameed said the town panchayat had 29 shops at Thuvarankurichi bus stand. They fetched a total of about ₹73 lakhs per year. It was just ₹32 lakh in 2015-16.

The town panchayat recently bagged the best town panchayat award from the State government for implementing the best solid waste management practices. It was also awarded for 100% tax collection for three years consecutively from the Tiruchi Collector.

Source:http://www.thehindu.com/news/cities/Tiruchirapalli/syndicate-free-bidding-yields-huge-rent-for-small-shop/article19550848.ece