MMRDA decisions to benefit RIL

Mumbai: Mukesh Ambani's Reliance Industries Limited (RIL) might turn out to be the biggest beneficiary of certain decisions taken by the chief minister Prithviraj Chavan-led Mumbai Metropolitan Region Development Authority (MMRDA) on Monday. 

    On the basis of RIL's request, the authority agreed to grant the firm an additional two years to complete the construction of a multi-level underground car park on a 37,252 sq m recreation ground in G block at the Bandra-Kurla Complex (BKC). 
    Under lease conditions, construction work on the plot, allotted to RIL in 2007, was to be completed by July 17, 2011. The MMRDA had collected from RIL a Rs 50-crore bank guarantee, which was to be encashed for breach of the four-year norm. 
    RIL would be required to furnish a fresh guarantee to continue work in that event. 
    On July 15, 2011, RIL requested the MMRDA to extend the bank guarantee and give it time till July, 2014 to finish work. It said a court matter relating to an adjoining 75,000 sq m plot, also leased to it for a convention centre and exhibition centre and commercial complex (CEC), impacted work on both the plots. On Monday, the MMRDA granted RIL's request. A decision to relax norms for the level and the size of underground car parks could also benefit RIL, sources said. On the basis of demand from the BKC property owners' association, the MMRDA decided to do away with the restriction that a car park could extend to a maximum of two levels and that premium (5% lease rent) is to be paid for construction beyond two times the plinth area. Asthana said this would encourage creation of more car parks. 
    Meanwhile, RIL, along with 12 to 13 other lease holders, may not require to pay the penalty in the form of additional premium for delayed CEC construction with the MMRDA relaxing the norm for completion of construction work from four to six years. 
    RIL is yet to acquire a commencement certificate (CC) for the work and is into its third year. As per the existing condition, it would have had to pay a penalty of 120 crore for each delayed year. 
    "The FSI in BKC was increased which led to increase in size of construction. Delays in environmental and high rise clearance also hit work for a number of plots," Asthana said. The new norm will be applicable for all existing leases where the four-year period is yet to be completed and for new leases. "Penalty will be collected in cases where the fouryear period has elapsed," Asthana said. The authority also decided to initiate the process for allotment of surplus 54,000 sq m area in the "E" block to existing lease holders.