Land prices in Siddharthanagar Munici-pality in Rupandehi district have jumped sevenfold in two years following the construction of inner city roads and drainage systems.

Apart from improved urban infrastructure, the ongoing construction of Gautam Buddha International Airport and the government’s plan to promote Lumbini as a pilgrimage destination has also pushed up land prices, officials and locals said. 

“Siddharthanagar Munici-pality where Bhairahawa is located has become an attractive investment destination for real estate brokers as land prices have been soaring by the day because of the ongoing development works,” said Bishnu Dutta Gautam, chief and executive officer of the municipality. “The price of land has increased sevenfold in major areas and more than twofold in other areas after the construction of inner city roads and drainage.”

Shailendra Prasad Shrestha, senior engineer of planning at the municipality, said, “Two years ago, a five-anna plot cost Rs100,000. Today, the same amount of land goes for Rs700,000. The number of applications for building permits has also jumped.”

Three years ago, the municipality used to receive 100-200 applications for construction permits annually, according to officials. The figure has gone up several fold to 600 during this fiscal year.

“Revenue collection from housing permits has crossed Rs10 million this fiscal,” said Shrestha. “That is the highest amount collected from issuing building permits.”

The Bhairahawa-Lumbini-Butwal corridor is a crucial economic zone because of its factories and proximity to the Indian border and Lumbini heritage site. In view of that, the Asian Development Bank (ADB) has accorded priority to the development of the region as a highly economically active corridor under its Integrated Urban Development Project (IUDP).

The construction of inner city infrastructures under the project started in 2012 and is expected to be completed in 2017. Funding amounting to $17.18 million has been allocated under loans and grants for the overall infrastructural development of the area.

The construction of 32 km of primary drainage and 10.5 km of inner city roads has been termed as a major achievement by stakeholders.

“Siddharthanagar used to be flood-prone zone and every year whole swathes of land would be inundated making commuting difficult,” said Bishnu Maya Rokka, a local senior citizen. “After the construction of drainage systems, the flooding problem has been eliminated and house construction has increased.”

Laxmi Sharma, senior project officer at the ADB, said that apart from infrastructure development, there is a need for long-term vision to optimally utilise the economic potential of the area. “The government should give priority to swift implementation of the Greater Lumbini Master Plan in line with the ongoing construction of an international airport to ensure that the intended outcome is achieved.”

More than 70 percent of the drainage has been finished and 10.5 km of inner city roads have been built, municipality officials said. “We have finished the first phase of the construction project and the flooding issue has been resolved, opening the way real estate development,” said Shrestha. “In the second phase, we will construct another 25 km of roads and improve the drainage.”

As per municipality officials, the development of infrastructure in the area has prompted investors to open five-star hotels. One hotel is under construction at Buddha Chok while another group has finished the building plan and is due to file an application with the municipality.

Land plotting has also increased in recent times as real estate brokers are trying to tap the growing business opportunities in the area. Five of the 13 wards in the municipality are seeing an increase in land plotting. However, some residents feel left out and have criticised the rapid land plotting going on there. “Eight years ago, no one would inquire about the land available for sale in our area,” said Mohan Kumar Saru, a local factory worker from Chamar village.

“Earlier, crops used to grow on these lands, now buildings will be cultivated.”

According to Saru, locals have been blinded by short-term profits and are abandoning their traditional occupation of farming.