Crores riding on CM’s ruling on additional FSI

TDR WORTH NEARLY . 400 CR AT STAKE

Mumbai: While chief minister Prithviraj Chavan weighs whether or not he should grant additional floor space index (FSI) for construction activity in the suburbs, state officials claim there is a lot riding on his decision.
    At stake is a transfer of development rights (TDR) worth nearly Rs 400 crore. The decision is also likely to impact 326 building proposals which have already been sent to the Brihanmumbai Municipal Corporation (BMC) for additional FSI.
    FSI is the ratio of buildable area to the total area of the plot.
Presently, a basic FSI of 1 is permitted for construction in the suburbs. Besides this, developers are also allowed to use TDR equivalent to another 1 FSI, bringing the overall cap on the permissible FSI to 2 ( two times the plot area).
    Chavan's office is examining a proposal to hike the basic FSI to 1.33, while retaining the overall cap of 2. The state urban development (UD) department, which had initiated the proposal for additional FSI in April, 2008, changed its stand on the issue recently. A note submitted by department principal secretary TC Benjamin advised Chavan against sanctioning the grant of additional FSI. It also arned that extra FSI would radically impact the city's development plan (DP) and burden infrastructure.
    Earlier, in a Bombay high court case regarding the proposal, the UD department filed an affidavit stating that the move would not adversely impact infrastructure and the DP. Following the UD department's change of heart, Chavan sought the view of the municipal commissioner Subodh Kumar on the issue. In his report, Kumar countered the UD department's objection. using projections of construction activity, use of FSI and TDR in the suburbs for the next ten years. He concluded that "there would be no significant change in the DP owing to consumption of extra FSI." Stating that the move would boost the BMC's income and help control TDR rates, Kumar asked Chavan to sanction the proposal.
    Officials said if Chavan favours the BMC, it would result in a drop in prices of TDR, which are currently hovering around the Rs 2,500 mark. Additional FSI would mean reduced dependence on TDR (instead of 1 TDR, only 0.67 would be needed), which is to be bought from the open market. This would ultimately reduce dependence on builders for construction. Civic officials said two real estate firms, HDIL and DB Realty, which generate TDR through their inherent business model, hold a lion's share of the TDR (1.20 lakh sq m).
    However, if Chavan sides with the UD department, it would instantly impact the 326 proposals which have already applied for extra FSI and are waiting for the sanction. The BMC has already collected a premium from many of these in lieu of the additional FSI grant. Civic officials said that such a decision would also impact redevelopment activity in the suburbs in the long run.