EFFECT OF CELL PHONE TOWERS ON VALUATION OF BUILDINGS

EFFECT OF CELL PHONE TOWERS ON VALUATION OF BUILDINGS


(Indian Valuer Oct.2010)

Page No. 1186 To 1188

S.R. Ramamurthy

BE, CE(I), FICA, FIE, FIV

Retd. Engineer-in-Chief

Hyderabad.

1. Erection of Cell Phone Towers:

Erection of cell phone towers is spreading an epidemic in Hyderabad City. For correct numbers one has to guess between 1,300 to 5,000. Initially Govt. permitted vide memo No. 8463/M1/98-1 dt. 16-04-1998, various cellular, tele services and telecom companies to erect their roof top towers, ground based towers, its equipment etc. without obtaining permission from the respective Urban Development Authorities or Municipal Corporations or Municipalities etc. Those orders were extended on 30-03-2001, 10-05-2001, 27-02-2002, 16-06-2004 and 01-08-2006. Those orders were quashed by the Hon. High Court of AP in W.P.No. 23228 of 2007 dated 31-12-2007.

The Govt. therefore, issued order vide G.O. Ms.No.183, MA&UD (M) Dept. dt. 27-02-2008 based on which all cellular companies have to obtain permission from the respective local authorities for the existing as well as proposed installations.

This article deals with those Govt. order’s public complaints and this author’s suggestions for valuation of buildings with cell phone towers.

2. Guidelines for according permission:

Taking into account the AP High Court’s directions, the AP State Govt. formulated the following guidelines to be followed by the local authorities while according permissions to be existing and the proposed land based and roof top installations vide G.O.Ms. No. 183, MA&UD(M) Dept. dt. 27-02-2008

o The applicant to obtain necessary approval of the Air Traffic Controller of the Airport Authority of India.

o The applicant shall take precautions for fire safety and lightning etc.

o The applicant shall furnish a legally valid undertaking that they are solely responsible for any damage to the building and for public safety.

o The applicant shall furnish “ from the surrounding building owners and from the concerned building owner, in case of roof top installations within their jurisdictions and in case any structure is found endangering the building or the lives of the residents, action shall be taken in accordance with law to remove such structure.

o The GO does not specify that the applicant shall enclose the structural stability calculation of the building as well as the tower. The GO is defective, as it had shown importance to legal, environmental and social aspects but omitted technically essential structural safety calculations and certificates.

The Chief Engineer, MCH was stated to have empanelled the engineers from the Osmania University, Jawaharlal Nehru Techonological University, Chiatanya Bharathi Institute of Technology and MJ College Of Engineering to issue structural stability certificates. A fee of Rs. 25,000 per structure was also stated to have been specified as a consultation fee to be paid by the cell phone companies to the engineers.

Similarly the other local authorities may have to empanel their engineers for issuing structural stability calculation and certificates.

It is suggest by this author that the local authorities pay the consultation fees to the empanelled engineers directly as if the structural stability of the building and the tower are jeopardized, the companies may not pay the consultation fees to the engineers. The local authorities may collect the required amount from the companies while receiving the applications.

In spite of the Govt. orders, permissions are the stated to have not been obtained by the companies.

3. Nature of complaints

The complaints are of two types. Certain complaints expressed by the public relate to structural defects of the building over which the tower was installed and other complaints relate to health hazards due to electromagnetic waves from the towers.

In Kapra Municipality, Hyderabad, a 10MT Reliance tower was stated to have caused cracks in a five storeyed building ultimately, on intervention of the Hon. High court of AP, the tower was dismantled during February 2008.

Vodafone cell tower at Ashoknagar, Hydeabad caught fire due to short circuit as a photo at page 5 of Deccan Chronicle, an English daily from Hyderabad city dt: 30-04-2009.

At page 19 of Deccan Chronicle dt: 07-03-2009, it was reported that Hyderabad city doctor had attributed headaches, fatigue and nausea to exposure to electromagnetic wavees. According to Prof. V.M. Pandhari Pande, a Director of Center for Excellence in Micro Waves Engineering, Osmania University, Hyderabad, who has done extensive research on this subject, the dangers are for more serious than we imagine viz. exposure to electromagnetic waves generates heat in the body, affect the enzyme system, cause mutation of DNA, protein structure and cell membranes.

However, according to Telecom Regulatory Commission of India, there was no conclusive study to confirm that health was adversely affected by cell phone radiation. Hon. High Courts of Kerala, Haryana and Punjab were also stated to have dismissed these allegations.

Fire Dept. of AP was stated to have suggested to install towers in open lands.

4. Huge hoardings :

A huge hoarding at Nampally fell on a car and two wheelers as reported in Deccan Chronicle at page 4 on 20-05-2009. Similarly a hoarding on the top of an apartment at Chapel Road, Addagutta, another at Attapur and third at I-max near Necklace Road were reported to have fallen, vide a report at page 3 of Deccan Chronicle dt.21-05-2009.

It was also reported that the Municipal Corporation of Hyderabad (MCH) has no data about hoardings that were structurally stable. According to the report, about 500 unauthorised hoardings were existing in city. The MCH was stated to have framed rules regarding size of the hoardings etc. but they are not being complied with.

Sri S. Krishnamurthy’s article at page 1066 of Sept. 2008 Indian Valuer deals in calculation of rent for erected hoardings, ATMs, and mobile tower in open lands.

Similarly rent can be calculated for hoardings and tower on terraces of buildings based on this author’s article on “Valuation of terraces of buildings by different authors” at page 662 of june, 2008 Indian Valuer.

Hoarding may not affect the valuations of the buildings over which they are erected, but stability aspects require to be considered by the competent authority, while according permissions.

5. Valuation of buildings with cell phone towers:

Recently valuation of a building near Ali Café at Amber pet, Hyderabad was referred to this valuer. On its second floor terrace, a Reliance tower installed at a monthly rent of Rs. 10,000/-. Though in live the valuation report it was mentioned that the installation was without permission from the MCH, without permission from the structural stability verification and without obtaining “No Objection Certificates”(NOCs) from the neighbors, the loan was sanctioned.

As valuers we may not be interested in health hazards due to cell phone towers, but stability and safety of the building and tower may influence the valuations.

Normally the rent from the cell phone towers on the terraces of the buildings should increase its rent capitalization value. But in view of the risks associated with un-stable towers and fire accidents due to short circuits etc. as valuers, we may consider only.

o 50% of building valuation, if permission from the competent authority only is available covering the risk involved due to erection of the towers,

o balance 50% valuation may be released only if insurance for the building is available covering the risk involved due to erection of towers,

o the bank may be advised to treat the valuation as nil, if the erection of the tower is unauthorized.

These are however purely, this author’s suggestions.

In future, the author wants to adopt the above guidelines and advise the banks to seek another property for collateral security, in case the tower is unauthorized and without insurance coverage.

This author further feels that it is high time that an ACT is either enacted by the State or the Centre and rules framed there under for implementation.

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