Office Order No. 35 of 2021, Creation of Risk Fund and Firm Price Plot Allotment
SIPCOT Office Order No. 35 of 2021, dated 8 April 2021, amends the plot allotment order and lease deed clauses dealing with later increases in plot cost. For allotments made with effect from 16 March 2021, land is allotted on a firm price basis for enhanced land compensation, although SIPCOT may still recover proportionate expenses for additional development facilities or escalation in development costs.
What the office order changes
SIPCOT Office Order No. 35 of 2021, dated 8 April 2021, implements a Board decision taken on 16 March 2021. The decision creates a Risk Fund to meet financial commitments connected with LAOP and changes how enhanced land compensation is handled in plot pricing.
The Board resolved that 10 per cent of the land cost would be added to the scheme cost proposals of new schemes towards probable enhanced compensation when fixing plot cost. It also resolved that allotments made with effect from 16 March 2021 would be on a firm price basis in relation to enhanced compensation for land.
Changes to allotment orders
The modified allotment condition removes SIPCOT's earlier right to revise the plot amount because SIPCOT had to pay enhanced compensation for acquired land.
The modified condition still provides that:
- SIPCOT may recover expenses arising from additional development facilities.
- SIPCOT may recover escalation in the cost of development works.
- These expenses will be divided among allottees of the Industrial Park on a proportionate basis.
- An allottee must pay the amount within 30 days from the date of SIPCOT's demand notice.
Changes to lease deeds
The modified lease deed clause similarly removes the earlier wording that described the plot cost as tentative and allowed revision for enhanced land compensation.
The replacement clause allows the lessor to divide expenses for additional development facilities or increased development costs among Industrial Park allottees on a proportionate basis. The lessee must pay the claimed share without objection within 30 days from the date of the demand notice.
Who is affected
SIPCOT industrial plot allottees and lessees whose allotments were made with effect from 16 March 2021 are covered by these modifications. Buyers or businesses reviewing such an allotment should check the allotment date, the modified pricing clause and any later demand notices for development expenses.
All other conditions and clauses in the allotment order and lease deed remain unchanged.
This summary is generated from the source document to help you find what is relevant. The PDF above is authoritative. For advice on your own property, use LandLens One or speak to a qualified professional.
Common questions
Can SIPCOT increase my plot cost because it later pays enhanced land compensation?
For allotments made with effect from 16 March 2021, the modified clauses remove enhanced land compensation as a reason for revising the plot price. The land is allotted on a firm price basis in that respect.
Can SIPCOT still demand additional money after allotment?
Yes. SIPCOT may recover an allottee's proportionate share of expenses for additional development facilities or escalation in the cost of development works.
How long do I have to pay a demand for additional development expenses?
The modified allotment order and lease deed clauses require payment within 30 days from the date of the demand notice.
Does the office order change every term in the allotment order or lease deed?
No. SIPCOT Office Order No. 35 of 2021 states that the other conditions and clauses in the allotment order and lease deed remain unchanged.
