In this letter we show that the dynamic optimal PCID allocation problem in LTE systems is NP-complete. Subsequently we provide a near-optimal solution using SON which models the problem using new merge operations and explores the search space using a suitable randomized algorithmic approach. Two feasible options for dynamic auto-configuration of the system are also discussed. Simulation results point out that the approach provides near-optimal auto-configuration of PCIDs in computationally feasible time.