Mumbai: In a move that has caused consternation among Mumbai's environmentalists, the state-run National Textile Corporation (NTC) has decided to auction 40 acres of prime land at its four more mills located in Worli and Parel in the heart of the land-starved Mumbai.

The sale of mill lands remains a contentious issue in Mumbai with residents and environmentalists ranged against private developers and the state government as substantial portions of the 600 acre of mill land in the metro was initially meant for public amenities and low-cost housing.

Real estate prices in Mumbai, which are among the highest in the world, began to rise in 2004 and got a further boost when NTC auctioned its first set of five mills in 2005.

The state-run textile company also plans to cash in on the booming real estate and plans to develop the land on its own.

While the three properties that it plans to auction in the Worli district of Central Mumbai are expected to fetch over the current rate of Rs20,000 per sq ft its property in Parel, also in Central Mumbai is likely to net over the going rate of Rs12,000 per sq ft.

NTC's proposed auction of the mills, located in Central Mumbai, is expected to send real estate prices soaring in the metropolis as developers are expected to bid higher than the prevailing market value, as they have done in the past.

The state-run NTC has already raised around Rs2,000 crore from its first phase of sales overturned a Bombay High Court stay against redevelopment of Mills land by private developers in 2005.

NTC now plans to auction its 18-acre Madhusudan Mills — the largest in Mumbai — Poddar Processors and Bharat Textile Mill, and Finlay Mill in Parel after it receives
the government's approval to invite bids from private developers.

Prices had soared even after NTC sold its mills in the first phase. While it received Rs7,000 per sq ft for the sale of the 14-acre Mumbai Mills in Lower Parel that was snapped up by stock markets firm Indiabulls, a months later the textile firm received Rs15,000 per sq ft for the sale of the 4.9-acre-Kohinoor Mills also in Central Mumbai.

Moreover, NTC says it plans to construct a 72-storeyed India International Trade Tower at its 11.96-acre India United Mill No6 at Prabhadevi.

Kohinoor Mills was sold to the Raj Thackeray-Umesh Joshi Kohinoor Constructions, which is building a shopping mall at the site.

While the state-owned undertaking may be readying to laugh its way to the bank, city environmentalists at fuming at the boom, which they say will add to the urban mess of Mumbai and further strain civic amenities like water supply, road and transport congestion and power supply.

They say the mills lands are the last remaining lungs or open green spaces in Mumbai.

Bombay First, a watchdog body, criticises the Maharashtra government's policy on the mill land as being lop-sided, as the city's infrastructure can no longer bear the burden of private development. "There needs to be some regulation in this madness," says an environmentalist.