BMC cracks down on redevelopment project delays

Warns Of Fines, Even Proposal Cancellation

Mumbai: Continuing its crackdown on sloppy work, the BMC has outlined a policy limiting the maximum redevelopment project time for its properties to four years and slapping penalties on developers unable to meet deadlines. 
    In a circular on Monday, the estates department listed out seven steps to be taken against developers if they slip up, including cancellation of proposals for delays in the planning stage and fines if construction is not completed on time. 
    Last week, the BMC, in an unprecedented action, had slapped penalties over Rs 90 lakh on sub-engineers of its road department for not filling up potholes promptly this monsoon. 
    Among the steps listed on Monday (see box), the BMC has revised its charges for a developer from Rs 1,000 to Rs 5 lakh every year for revalidation of the letter of intent (LOI) if he fails to get a commencement certificate (CC) within a year. For further delay, a showcause notice will be issued for cancellation of the project. It will be implemented with retrospective effect from 2010. 
    The BMC has taken a lenient view on delays resulting from litigation, but ordered a stiff 18% interest levy on the remaining capitalized value (the amount the developer has to pay for the sale component in a redevelopment project) and an additional Rs 1 lakh per month for any extension a builder might seek in a smoothly progressing project. 
    The new policy also links a project's deadline to the plot area. Redevelopment on a plot up to 4,000 sq m has to be completed within three years and those that must in four years. 
    "The delay in completion of projects embarrasses the BMC as rehabilitation of tenants cannot be done on time. Moreover, as time passes, the value of the flats in the sale component of the project increases for the builder, but leads to delay in paying up the capitalized value that he owes to the BMC. This policy will ensure that the capitalized value is paid on time and as per schedule," said acivic official. 
THE ACTION PLAN 1 If a builder/society submits a redevelopment plan without the principal tenants' consent, 45 days will be given to do so 
    Failure will mean closure of proposal 2 After the BMC lists eligibility oftenants, the developer/society must give details of the plot area and developer's financial status within 
15 days 
    Assistant commissioner (estates) will close proposal in case of failure 3Once the letter of intent (LOI) is issued, the society/ developer has to obtain intimation of disapproval (IOD) and commencement certificate (CC) within a year 
    Inability will mean the redevelopers have to cough up Rs 5 lakh for revalidation every year 
    If CC is still not taken within a year, a showcause notice will be issued for cancellation of the project 4 If a project is not completed within deadline, a showcause notice will be issued to the developer/society for recovery of the capitalized value (the value of the project's sale component) 
    For two-three year projects, 10% of the value has to be paid before LOI and 90% before occupancy 5 If a project goes without litigation and yet the developer seeks extension, an 18% interest on the capitalized value will be charged with an additional Rs 1 lakh per month for the extended period 6 To ensure handover of the rehabilitation component on time, the BMC proposes to take a bank security deposit and forfeit it in case of delay 7 Any developer who has abandoned 3 projects in the past will be blacklisted BMC PROPERTIES IN ISLAND CITY 
The BMC owns 4,176 
leased plots spread over 551 hectares. It has more than 5,000 structures with over 40,000 tenants 
REDEVPT PROJECTS 
110 municipal tenanted properties 
are in various stages 
of redevelopment in 
the island city STATUS OF SOME PROJECTS 
Work on Lalbaugcha Raja Cooperative Housing Society, Bavlawadi near Ambedkar hospital in Byculla and BIT chawl on Princess Street began in 2004. After 8 years, they are nearing 
completion 
Construction at BIT chawl, Agripada, BIT chawl, Matunga, Vakil chawl in Parel, two projects near Nair hospital, Janta Nagar and Kranti Nagar projects near Grant Road station took off in 2007. Nowhere near completion after 5 years 
REASONS FOR DELAY 
    Litigation/ non-cooperation by tenants 
    Demolition of existing structures on site 
    Materialization of pending transfer cases 
    Split-up tenancies 
    Developer's inability to process proposals for IOD or CC on time after receiving LOI

Redevelopment work on at the BIT chawl in Agripada