CM clears FSI premium plan, builders see red

Mumbai: In perhaps his quickest decision till date, chief minister Prithviraj Chavan is believed to have given the go-ahead to the new building approval guidelines prepared by BMC commissioner Subodh Kumar in a move that could meet with strong resistance from builders. 

    A 100% premium is proposed to be levied on developers who utilize over 25% of the sanctioned FSI (the ratio of permissible builtup area vis-a-vis the plot size) for a residential project. The plan could earn the civic administration about Rs 3,000 crore a year. 
    Mantralaya sources told TOI on Wednesday that the state government would issue a formal notification in a "day or two" inviting suggestions/objections from the public. Activists, NGOs, urban planners, architects and, more importantly, builders are expected to participate in the public hearing that will be held over 30 days. After the process is over, the government will formalize the policy. 
    Builders across the city, who spoke to this newspaper in private, said approaching the courts was a "very strong option". "Why the hurry to push through a proposal which will affect the entire industry and increase property prices?" said one of them.FSI PREMIUM PLAN Developers plot legal battle 
Mumbai: BMC commissioner Subodh Kumar's new building approval policy seeks to charge builders 100% premium on certain areas of a residential building that are currently available virtually free of cost to developers. But many builders sell these areas at market rate to flat buyers. 
    As the chief minister seems to have agreed to the plan, builders are eyeing a legal battle. A developer said once the issue lands in court, it will delay the policy's implementation for a "long time". "Hopefully by then the commissioner would have retired," he said. 
    Many developers who paid astronomical sums for land but are still awaiting construction approvals will be the worst-hit when the commissioner's guidelines are approved. In the past one year, some builders outbid competitors by quoting a few thousand crores for prime plots in Mumbai. Their valuation was based on buildingconcessions they hoped to procure from the BMC and build way beyond permissible limits and earn windfall profits. Kumar's proposal plans to restrict this additional construction—flowerbeds, pocket terraces, decks, voids—to just 25% of the total builtup area and charge builders 100% premium for it.Currently, these areas are not counted in the building's FSI. Builders sell these areas at market price and tell buyers to amalgamate them illegally into their living room or bedroom to make them more spacious. In the island city, some developers have converted entire refuge floors into party halls. 
    The non-profit Urban Design Research Institute, comprising eminent Mumbaikars including leading architects and urban planners, said Kumar's policy, among other things, will reduce speculation. "Though in the short term builders and developers will retaliate by increasing prices to show their dissent, in the long term there will be a price adjustment that will bring down the average price per square foot and reduce speculation and overcharging," said UDRI executive director Pankaj Joshi. 
    Builders operating in the Bandra to Juhu belt are equally worried because the maximum misuse of building concessions granted by past municipal commissioners was noticed in these areas. 
    Utsal Karani of NGO Janhit Manch said the BMC should carry out a survey of all new buildings where occupation certificates were issued in the last 2-3 years to find out possible violations, irregularities in building bye-laws and use of excess FSI. 
    "All under-construction projects must be placed under special scrutiny, including physical verification of the layouts, areas of such projects and further scrutiny after two years of occupation certificates being granted," he said, adding that civic officials who cleared such a building proposal be prosecuted.