SC order on open space puts Bhendi Bazaar project in limbo

Mumbai: The Supreme Court order on retaining mandatory open and recreational spaces around skyscrapers in Mumbai is likely to impact the city's biggest redevelopment project in Bhendi Bazaar. 

    The verdict is a major victory for civic activists and town planners who opposed government policies that allow towers on narrow plots in highdensity areas. But it has hit developers hard. Redevelopment of dilapidated cessed buildings in the island city, slum rehabilitation schemes and redevelopment of housing societies on tiny plots in the suburbs are expected to suffer. The 16.5 acre Bhendi Bazaar project, a major cluster redevelopment scheme, will be one of them. 
    Assisted by senior counsels like Fali Nariman, Haresh Salve and Shyam Divan, a bench headed by Justice H L Gokhale overturned bizarre norms which allowed developers to leave negligible open space (barely 1.5 m) around buildings. The court ordered that there should be a width of at least 6 m on one side within the plot to allow fire engines to manoeuvre in an emergency. 
    A Mumbaikar himself and aware of the haphazard construction in his backyard, Justice Gokhale also struck down a civic policy, which allows the compulsory recreational ground to be placed on the building's podium. The court mandated that the recreational ground must be on the ground itself. 
    But builders said rehabilitating existing tenants and slumdwellers free of cost in new tenements and building apartments to be sold in the open market—all on the same plot—will make such projects unviable now. 
    The spiritual head of the one-million strong Dawoodi Bohra community, Syedna Mohammed Burhanuddin, had launched the Bhendi Bazaar redevelopment project about four years ago. The highly-congested locality houses 3,200 families, mainly Bohras, and 1,200 commercial shops. Its planners are now worried. 
    Abdeali Bhanpurawala, secretary, Saifee Burhani Upliftment Trust, said, "The court order does not take into account ground realities. It will derail most redevelopment projects in the island city, especially in the congested B and C wards where population density is very high. We are discussing the project and have to find a way out." 
    The project's CEO, Abbas Master, said, "It will affect our project. A recreation ground on the podium is safe for children and away from noise. Once it's shifted to the ground level, there will be little space left for parking." 
    The project was at the last stage of approval in the BMC. But after the SC order, the municipal commissioner has stopped granting permissions to all redevelopment projects in the city. 
REDEVPT PLAN 
Bhendi Bazaar project will rehabilitate 3,200 families and 1,200 commercial shops 
17 towers will be built after 250 old low rise buildings are razed 
Of 17 towers, 13 will be exclusively for rehousing existing residents 
The remaining four towers will be sold to buyers at market rate 
Each rehab building will be between 30 & 45 storeys, while the free sale towers will be over 50 floors 
Car parks for rehab component will be 1,400 
Car parks for free sale will be more than 1,000 WHAT THE COURT SAID |Minimum recreational space can't be reduced and must be provided on the ground and not podium alone 
    Reconstruction proposals, even for plots up to 600 sq m, must retain open space of at least 6m on one side at ground level, unless the building abuts two roads of 6 m or more on two sides 
    Govt will appoint a technical panel for highrises to look into grievances about construction

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5 THINGS THE NEXT GOVERNMENT MUST DO

The last few years, characterized by corruption, policy paralysis, economic slowdown and job losses, is something not only the government and the industry but even the common man would like to forget. Given this background, we spoke to some thought leaders and captains of industry across sectors and asked them to identify five things which the next government should do to ensure that growth and development come back on track. Here's a peek into their minds…

ANAND MAHINDRA | CMD, MAHINDRA GROUP Measure social sector outcomes 1 
Articulate "Promise 2019": When companies formulate strategy, they clearly articulate a nearterm 3-5-year vision with clearly defined deliverables, not vague, long-term plans. So should the new government. We need to see a "Promise 2019", with metrics to measure performance versus promise (eg MW of generation capacity added, km of national highways constructed, etc). The government should then publish regular and transparent annual updates against these plans. 2 
Promote tourism as a multiplier and a mirror: At 6.6 million international tourist arrivals annually, India lags abysmally behind countries like South Africa (8.3 m), Taiwan (7.3 m) and Vietnam (6.8 m). A doubling of this number would not only generate an additional $17 billion in foreign exchange, but also have significant multiplier effects on employment. 3 
Measure social sector outcomes, not spend: Our policies today are input-focused, emphasizing 
the money spent in areas like healthcare and education. The emphasis must shift from resource availability to productivity measurement within the social sector. 4 
Kick-start investment cycle through infra push: 
The 12th Five Year Plan envisages investments 
of $1 trillion. Even so, India's investment cycle seems to be in a state of suspended animation. The government must motivate the private sector to act, by reigniting the belief that India can be a manufacturing powerhouse. Two specific examples – can the large land banks that the government has accumulated be put to quick use by setting up plug and play National Investment and Manufacturing Zones already envisaged under the National Manufacturing Policy? Secondly, can landmark projects like the Delhi Mumbai Industrial Corridor and the Bangalore Mumbai Economic Corridor be turbocharged to demonstrate to the world that investment in Indian infrastructure can indeed sow a 'field of dreams'? 
5 
Offer a "New Deal" to 
address India's Red challenge: Internal insurgency and the naxal menace pose the biggest threat to India's territorial integrity. It's essential to put maximum resources behind battling this. At the same time, a "New Deal" should be provided, not a cosmetic solution or a hollow promise but a deal that tackles the core ills besetting these regions — lack of education, healthcare, and infrastructure development.

DEEPAK PAREKH | CHAIRMAN, HDFC Focus on minimizing energy imports, pass crucial bills 
    The year-end always calls for introspection. 2013 has seen fewer wins and more misses. Yet consensus says next year will be better for India. There are many critical pending issues but one must recognize that positive initiatives such as Aadhaar, phased hike in diesel prices and the Project Monitoring Group must continue with the same momentum. Though the 'to-do' list of the incumbent and the future government is immense, some issues listed below are at a tipping point. 
1 
Energy security: Two-thirds of India's power is generated from coal. India 
holds the fourth largest coal reserves, yet faces shortages. Coal India's monopoly must go. The long-term policy focus is to minimize energy imports. If no serious measures are taken now, by 2030 India will cumulatively import energy of $3.6 trillion — twice today's GDP. We 
cannot afford this. 2 
Target FDI: Tapering is inevitable and the freshly garnered FCNR(B) deposits are of 
shorter tenors. We need more long-term equity investors like sovereign and pension funds. Only a friendlier business climate will encourage investors. Start by streamlining approvals with timelines. 
3 
Pass critical legislations: The passage of bills like GST, DTC and insurance is no 
longer an issue of political one-upmanship. They are imperative for the economy. These bills have been sufficiently debated. Those opposing will be viewed as anti-reform. Which political party should risk this? 
4 
Get going on disinvestments: Today, disinvestments are only used to narrow the
fiscal deficit and yet targets are rarely met. Reduce government stake in PSUs to 51%, offer ESOPs and restrict single shareholders' stake to 10%. PSUs will become more efficient and the government will get resources it needs for its financial inclusion agenda and raising its spend on education and healthcare. 
5 
Focus on the urban agenda: 40% of India's population is going to be urban by 2030 — a 
doubling of the current urban population. India needs many new cities with adequate housing, transportation and urban infrastructure. DMIC is India's most promising urban project. It must remain fast-tracked and supported in toto.

1 
Recommit to market reforms: The liberalization has brought economic growth. Yet, of late, there 
are pressures to go back to populism, redistribution of wealth and socialism. No doubt, there have been market failures. But government failures have been even bigger. We should recommit to market reforms. Social and political buy-in requires that corporations ensure that growth be inclusive. Social justice and market forces must work in harmony. 2 
Reinvent higher education: India has a very large young population. Yet, of the total number of 
people who should pursue higher education, only 18% actually do so. We must dramatically upgrade the quality and capacity of higher education through better collaboration between industry and academia; leveraging technology; public-private partnerships; stronger role of state governments in higher education; and others. 
3 
Reimagine healthcare delivery: India's healthcare system is in a major crisis. Infant mortality is seven times that of the United States. India has 63 million diabetics and 2.5 million cancer sufferers, the majority of whom will not get quality treatment. There is a severe shortage of doctors, beds, and medical facilities. We must declare that healthcare is a human right. In order to close India's enormous gap between healthcare supply and demand, there is an urgent need to scale up the practices of those Indian hospital exemplars that provide quality healthcare at ultra-low cost. 
4 
Transform infrastructure: A strong manufacturing sector is required to create jobs that can 
absorb millions of youth. The backbone of manufacturing is infrastructure. We must place very high priority on building the infrastructure that can provide world-class supply chain to fuel growth in manufacturing. 
5 
Embrace reverse innovation: 
Reverse innovation is any innovation first adopted in a poor country like India which subsequently can flow into rich countries. Innovating to solve the problems of the poor represents the biggest opportunity for Indian corporations and should be their number one priority. However, this a l s o presents some of the hardest techn i c a l challenges, where we cannot simply adapt solutions used in wealthy markets. We have to innovate anew. 
Push reforms, make healthcare a right VIJAY GOVINDARAJAN | PROFESSOR, TUCK SCHOOL, DARTMOUTH COLLEGE

N R NARAYANA MURTHY | CHAIRMAN, INFOSYS Parties must field non-political candidates in 2014 
    The year 2013 has been a disappointing one in many ways – low GDP growth rate; no progress in liberalization; very poor handling of a difference of opinion with an important ally; worsening of urban infrastructure; and a judgment by the Supreme Court that puts us back by at least 20 years. I can go on and on. My expectations from the new government are... 
1 
Courageous, visionary leader: 
I hope that the 2014 elections 
will bring a government with a fresh, youthful and confident mindset. If we can at least get a courageous, firm and visionary leader who will enunciate his or her vision to redeem the pledge of the founding fathers through internationally proven ways of reducing poverty, that will be enough. Rahul Gandhi's speech at FICCI and reports of Narendra Modi's track record in Gujarat raise our hopes. 
2 
Create jobs: The only way India can reduce poverty is by 
creation of jobs with decent disposable incomes. No country has solved the problem of poverty only through subsidies. Every country that has reduced poverty has done it by reducing friction for businesses to operate, export, grow and generate productive employment. 
3 
Perform: It is important for the UPA and the NDA to remember that performanceleads to recognition, recognition leads to respect, and respect leads to power. The only way India can become powerful in the eyes of the developed nations is through performance like China has done. 
4 
Field non-political candidates: 
Both UPA and NDA have to 
pick several non-politician candidates who have demonstrated performance in their current or earlier avatars. I know the corporate world a bit and let me name just a few examples – Nandan Nilekani, Deepak Parekh, Vindi Banga, Mohandas Pai, Yogi Deveshwar, Venu Srinivasan and K V Kamath. We have excellent people from other fields too. Ramesh and Swati Ramanathan are probably the best two brains in the country in election reforms and urban governance. 
5 
Integrity: We need our parliamentarians to demonstrate 
integrity of thought in educating themselves well on legislations, and discussing and debating them on their merits. We have waited 67 years for such integrity from our parliamentarians. I am an optimist. Therefore, it is never too late. 
    Happy New Year!

ADI GODREJ | CHAIRMAN, GODREJ GROUP 
Introduce GST, boost Saarc ties 1 Take quick and early decisions 2 Control the fiscal deficit, the balance of payments and the $/Re rate 3 Considerably improve ease of doing business in India 4 Introduce GST as early as possible 5 Improve relations with other Saarc countries

SACHIN BANSAL | CO-FOUNDER & CEO, FLIPKART Improve internet infrastructure 
    Being a part of the e-commerce industry, there are a few essential things I would like the new government to focus on: 1 
Uniform tax code: This will go a long way in clearing up a lot of ambiguity that businesses face today and 
help them expand and function to their potential. 2 
Special cells in govt depts: Start special cells within existing government departments that pave the 
way for entrepreneurs and small businesses to set up operations smoothly. These cells could provide assistance in the areas of registrations, payment gateways, infrastructure, etc — areas that are processheavy and require extensive bandwidth that smaller businesses find difficult to spare. 
3 
Focus on improving data centre infrastructure: SEZs for data centre operations, for example, would reduce the cost of running these centres within India. This, in turn, would provide relief to smaller companies who currently need to run their operations from international centres due to cost considerations. 4 
Boost tech infra: At an overall level, the government also needs to pay attention to strengthening the overall internet infrastructure in the country. This includes focusing on the rural broadband strategy, enhancing our mobile internet infrastructure, increasing the reliability, security and speed of the web (and, therefore, networked applications), etc. Steps have already been taken in this direction but there is still scope for a lot of improvement. 5 
Take India-centric view: Most importantly, the Indian government should take a fresh Indiacentric view of the architecture of internet infrastructure in India. They should work towards preserving the independence of the Indian internet users and taking steps to ensure their data security.

MARK MOBIUS | EXECUTIVE CHAIRMAN, TEMPLETON EMERGING MARKETS GROUP Overhaul tax code to reduce litigation 1
Encourage investments: We believe the government must slowly reduce the extent of public 
sector involvement in the economy and allow private enterprise to make investments. This could lead to an increase in productivity, growth rates and the currency should likewise strengthen. It is heartening to note that the government is finally taking steps to liberalize investments. However, that should not be done just to increase inflows, but also to enhance efficiency and productivity. 
2 
Overhaul tax and policy code: India needs to dramatically overhaul the policy/ tax code – which 
has resulted in a lot of litigation. That has undermined business confidence in the country. Though the government has taken some steps; a lot more needs to be done. 3 
Clarity on title rights: Ownership and transferability of assets should not be compromised. 
There should be earnest endeavour to ensure that bonafide land & property titles, mining leases, access to natural resources are not impaired in any manner through executive or judicial intervention. 4 
Greater voice for minority shareholders: The only way to truly revive capital markets is to make 
companies answerable to minority shareholders. The government and Sebi have taken many positive steps in this regard and protection of minority rights would ensure that all investors — retail and institutional — have greater faith in the market. 
5 
Facilitate management change on default: To move forward India should facilitate management and ownership changes in businesses that have willfully defaulted on their debt obligations. Capital is scarce and should be deployed with deserving management teams backing business plans and if that entails a management change, India should be willing to go down that route. The new RBI governor has made his intentions clear in this regard and now is the time for us to see him deliver on the same.

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‘Power, water cut as residents don’t vacate buildings’

Mumbai: The Bombay high court has ruled that civic authorities have no right to snap water and electricity supplies in their bid to hasten evacuation of dangerous buildings. However, BMC officials said that residents continued to live in their dilapidated homes risking their lives despite several notices, forcing them to snap the power and water supplies. 

    "Several buildings have been declared as dilapidated during the pre-monsoon surveys conducted by the BMC. Notices were issued to such buildings, but residents don't want to move out and continue to live in rickety structures risking their lives. Therefore, we cut supplies to such buildings to force the residents to shift to safer places," said a senior civic official. 
    The HC was hearing a case filed by the residents of Manjul Darshan Society in Borivli on Monday, who alleged that the BMC had cut power and water supplies to their building that has been categorized as dangerous. The court said that such action can only be taken at the time of evacuation and "not in advance". 
    The civic body has been resorting to this measure as otherwise residents are reluctant to vacate the buildings, which are structurally weak and can collapse anytime. Officials further said that more than 15 days after the BMC disconnected power and water supplies to a few buildings in Tarwadi in Byculla, a section of residents continued to stay there. 
    BMC's eviction drive has gained momentum after a municipal building in Dockyard Road collapsed a few months ago, which killed 61 people. 
    "The high court has asked us not to cut electricity before the eviction day, but the court has also given us a safeguard by saying that the BMC shouldn't be blamed for any mishap," said another senior civic official. 
    Meanwhile, officials say that in case of the Borivli society, their supplies will be reactivated once the BMC studies and court order properly.

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Builders denied bail for selling flat on illegal floor

Mumbai: The Bombay high court has refused to grant bail to two developers who allegedly cheated a woman by promising her a fifth-floor flat in an under-construction building in Bandra that had permissions only to build up to the third floor. 

    The builders, Sharif Altaf Furniturewala and his uncle Aftab Latif, have been in jail for two months since their arrest on October 19. 
    Their claims that the case was a civil one and their offer to return the sum of Rs 50 lakh they had taken from the complainant, Rubina Ansari, failed to impress the court. 
    One of the two builders, Furniturewalla, was charged earlier this year along with his two brothers after the Aftab Manzil building which they owned in Mahim came crashing down, killing 10 persons, including advocate Rizwan Merchant's mother, wife and son. 
    Merchant, who is Ansari's lawyer in this case, argued it was not a simple case of cheating but part of an "epidemic of illegal constructions in the city", where an attempt was made to put up a building "up to the 7th floor without there being any sanction from local authorities" with a "design to earn huge profits at the cost of lives of flat purchasers". 
    The complaint said Furniturewala and Latif signed an agreement to sell a 600 sq ft flat on the fifth floor of their under-construction seven-storey building Concrete Construction in Bandra to Rubina in 2010. Rubina paid Rs 50 lakh of the total cost of Rs 78 lakh. Bldrs forged BMC docus: Complaint 
    However, she soon came to know the building did not have permissions. When her notice for refund of money went unanswered, she lodged a criminal complaint with the police. 
    Rubina's lawyers, while opposing the bail plea, pointed out that around five documents were forged, including the commencement certificate to show the BMC had given permissions for a seven-storey building. 
    Advocate Merchant said it was an attempt to violate civic rules "for construction of the building which, if it collapses, will cause casualty of human lives—as has happened in the collapse of Aftab Manzil". 
    Justice A R Joshi agreed. "The present matter cannot be viewed as a simple breach of contract and cheating an individual and as such entitling the applicants to bail on their willingness to deposit an amount of Rs 50 lakh." 
    Justice Joshi added that since the matter was still being investigated, it was not proper to release the accused on bail.

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A SHOT IN THE ARM FOR MUMBAI'S REALTY

RAVI SINHA gets the real estate fraternity's views on steps that can provide an even greater impetus, to the coveted real estate market of Mumbai

    Mumbai has remained one of the most popular property markets in the world. Nevertheless, there are certain bottlenecks that affect this market. If these issues are addressed promptly, the city's realty market will witness a strong recovery. As the financial capital of the country, Mumbai continues to attract new businesses and residents. Other sectors, such as retail and entertainment, also fuel demand for realty in the city. Mumbai has continued to expand with real estate developments in defunct mill areas across the city, as well as planned developments in the peripheral regions, such as Panvel, Thane and Navi Mumbai. These regions have huge potential for growth and absorption, owing to their overall development, connectivity and excellent living environment. 
    Besides creating additional central business districts (CBDs), it is crucial to strengthen existing infrastructure by introducing airports, sea-links, metros, ring roads, etc., for Mumbai to become an ideal investment destination, says a spokesperson from Kalpataru. Areas like Thane and Panvel have become preferred destinations for investment and expansion. "Although infrastructure bottlenecks are a big hindrance, the state government has undertaken numerous initiatives to improve the situation. It is important for the city to grow in sync with the rapid transformation, by reinventing itself. Public-private partnerships and single window clearances should be given priority," says the spokesperson. The potential to develop road, rail and sea-based transport infrastructure is one of the biggest advantages that Mumbai has over other cities. It is vital that the development of new mediums of transportation do not get stuck in bureaucratic approval processes, adds the spokesperson. 
    Manju Yagnik, vice-chairperson of the Nahar Group, points out that the availability of land for development is a major issue in Mumbai, as the city is surrounded by the Arabian Sea. Within the city, land for development can be unlocked only through redevelopment of dilapidated buildings and slum redevelopment. Opportunities also exist in the relatively new areas of the Mumbai metropolitan region (MMR), such as Panvel, Virar, Dombivli, Ambarnath, and Badlapur. Yagnik insists that the city's realty market has not yet reached saturation. 
    Relaxing certain policies and simplifying the process of obtaining approvals will surely boost the market, she feels. "Issues, such as coastal regulation zone (CRZ), clearances for highrise buildings and approval from the Ministry of Environment and Forests (MoEF) are crucial, as far as new projects or redevelopment is concerned. The permissible floor space Index (FSI) in Mumbai needs to be increased, considering the space crunch in the city," says Yagnik. In Tokyo, Hong Kong and Shanghai, the FSI limits range between 10 and 15. However, in Mumbai, the FSI ranges between 2.5 and 4 for redevelopment projects and between 1.33 and 4 for non-redevelopment projects. 
    Pranay Vakil, chairman of Praron Consultancy, maintains that the focus needs to change from 'location' to 'connectivity'. Earlier, property prices in Chembur were one-sixth of those in South Mumbai. However, a single flyover has changed the profile of Chembur and prices in this suburb have gone up. Similarly, the trans-harbour bridge will open up areas that are largely unoccupied and put them within 20 minutes of Mumbai, he feels. People, as well as industries may relocate to these untapped regions, he predicts. 
    Santosh Naik, CMD of Disha Direct, agrees that factories will eventually shift out of the main city, as the value of land will prove to be higher than their production for the next 10 years. He highlights a trend where there are no factories in New York or Manhattan because of the high land prices. There are only offices; even the residences are in the peripheral areas, like New Jersey. Mumbai will also reflect a similar pattern, he feels. "The biggest land bank is with the government. While individuals cannot have more than 50 acres of agriculture land, corporates hold thousand acres of urban land. As a land owner, my interest is not to provide green cover but to see how much money I can make out of the land that I have," says Naik, emphasising that clear guidelines need to be framed visà-vis green cover. 
    (The writer 
    is CEO, Track2Realty)

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No tower near HPCL refinery: SC to developer

Mumbai: Taking serious note of security concerns expressed by HPCL, the Supreme Court has ruled against a developer who had submitted plans to construct a tower very close to a refinery of the oil major in a central suburb of Mumbai.      In a majority two-to-one verdict on December 10, the SC dismissed an appeal filed by Oswal Agro Mills Ltd against an order passed in April 2012 by the Bombay high court. The HC had ruled in favour of HPCL and allowed its petition, which sought the quashing of permissions given by the BMC for change of user and development permission for residential and commercial complex on land less than 500 metre away from the HPCL installations in Mahul, Chembur.      The SC bench of Justices Hemant Gokhale and Ranjana Desai said there were serious security concerns expressed by the police since HPCL is a sensitive installation set up in 1952 and construction permissions were rightly refused by the HC, which had asked BMC to take into account security and health concerns. In his dissenting judgment, the recently retired Justice G S Singhvi, however,set aside the HC order and sent the matter  back for its reconsideration.      The dispute essentially was over proposed construction of the residential-cumcommercial complex by Oswal on its property. The project envisages four commercial buildings, one office building, eight residential buildings to accommodate 3,000 flats. In 2006, he had obtained permission to change the land use from industrial to residential.      Apart from the refinery, HPCL has about 117 storage tanks on the property which store, at any given point of time, oil and petroleum products of over 11 crore kilo litre.      HPCL had lodged their primary concerns over health, fire and security hazards the construction posed. "Municipal authorities were required to consider these objections but refused to do so," the SC said.      What weighed with the two judges, apart from security risks HPCL faced as a terror target, was also the "importance of healthy environment". "Where human habitation is permitted in proximity to hazardous plants, there is an immediate, as well as long term danger of exposure. The planning authority cannot ignore these aspects," the two judges said. "Public interest cannot be sacrificed at the altar of commercial interests," they added.

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DEVELOPERS 'GOODWILL CONNECTS WELL IN REDEVELOPMENT

Considering that redevelopment is the only way to sustain the growing needs of the population, its perception is slowly but surely changing positively.      A look at the changing face of the redevelopment segment in Mumbai suggests that it is the developers' goodwill that connects better in this segment rather than any clout whatsoever. Analysts maintain that redevelopment is an inevitable reality in the city's development and its perception is definitely seeing considerable improvement. People have also started realising that it is the only efficient method to transform the city's graph. Planned redevelopment enables the maintenance of asset values in a land-starved city. The integrated master plan development and dynamic urban governance will help to resolve issues to a large extent.      Developers are taking continuous initiatives to make redevelopment a success by implementing long-term thinking, collaborative planning and flexibility, effective execution and systematic innovation. However, the old-timers recall that things were not the same in the 1980s and the developers have really worked hard to earn the brand value and respectability in this space. During the days when slum redevelopment first started, a perception gained ground that this is the realty space meant for only those who have immense resources at the political level and also muscle power.      This is not so any more. According to Nimish Ajmera, director, Ajmera Realty & Infra Pvt Ltd, there is definitely no need for muscle power if the developer ensures that the best quality product is delivered to tenants looking forward to redevelopment. However, at times, it is difficult to handle certain tenants as they are driven by unprecedented greed and this also affects a large number of members who have agreed, as it leads to delay in redeveloping the project. "Redevelopment in itself is a crucial task to undertake as it includes innumerable approvals from the various government departments and authority. A lack of clarity in government regulations has made matters even more difficult. Long-term policies are not materialising. Speedy approvals and a single window clearance can help developers to take initiatives which would benefit city dwellers at large," he adds.      Rajesh Vardhan, managing director, Vardhman Group, opines that developers have not been successful in changing the poor perception about redevelopment and there is still a long way to go for changing the perception; only good and fast work by developers will be able to achieve this. "It is not necessary at all for the developers to have muscle power. However, it is a must to have all the resources required for redevelopment and the goodwill of the developers, which will play an important role to get the redevelopment work done. Only in slums, the phenomenon of muscle power is seen for obtaining the consent of the slum dwellers. However, redevelopment projects ultimately do not materialise and hence, only 13 per cent of the proposals have been able to achieve the goal," explains Vardhan.      Asit Koticha, promoter, Pashmina Developers, blames it on vested interests when he says that the developers have, by and large, been successful in changing the perception, yet, when it comes to redevelopment of slums, it is difficult to convince vested interests, political and otherwise. According to him, the policy per se is very good but the local issues in slum redevelopment have snowballed to such a level that most of the good work done in this segment gets negated. "In slums, it has not changed dramatically even though there is a lot more clarity in this space with the new DCR and the possibility of corporates entering this segment. However, I don't think muscle power can get everyone on board. The laws are so simplified now that political clout is not required. Yet, local issues are so gigantic that even if majority of the people are willing, developers face many problems in this space," adds Koticha.      Diipesh Bhagtani, executive director, Jaycee Homes, on the contrary, admits that muscle power is required for self-protection as developers deal with various people with different temperaments and attitudes. According to him, the resources of the developer are very important in the redevelopment process, as it requires a large capital investment at the initial stages itself. To kick start the entire project, depending on the size of the projects, a developer needs to put in all the resources for successful acquisition and completion.      "There are also anti-social elements involved for achieving their own vested interest. Housing is a very sensitive matter and has different emotions attached to it. Also, it is possible for a developer to keep the residents happy monetarily but to keep everyone emotionally happy is not possible, as it is sometimes unreasonable. Hence, a developer needs some protection for himself. People in slums do not understand the policy guidelines as a majority of them are uneducated. A developer first has to educate the benefits of redevelopment to the people residing in these slums and then start the process. Also, there are multiple claimants for a single unit. So, despite facilities and policies, slum redevelopment projects are a big challenge," says a candid Bhagtani.      Redevelopment has always been challenging and there has been protest regularly, especially in slums. Major protests in any type of redevelopment project is for gains and benefits only and hence, the policy framed for slum redevelopment needs a major revamp to achieve its objective. Challenges in redevelopment and slum redevelopment threaten to be a brand dampener for companies involved in the segment. Yet, with land being scarce, this is the only way forward.      In general, there are around 16000-17000 declared dilapidated buildings, though the unreported and overall figure is even larger. Hence, amidst the challenges, redevelopment is the only way ahead for such buildings. Beyond slums, people have now started realising the importance and benefits of redevelopment. Redevelopment is not only happening for small buildings but also for large societies and cluster of buildings. This has changed the perception of redevelopment and the confidence level has gone up. So, redevelopment today does not have a poor perception but has become a means for a better and richer way of life.      (The writer is CEO, Track2Realty)  QUICK  BYTES  SPEEDY APPROVALS AND A SINGLE WINDOW CLEARANCE CAN HELP DEVELOPERS TO TAKE INITIATIVES WHICH WOULD BENEFIT CITY DWELLERS AT LARGE.  IT IS NOT NECESSARY AT ALL FOR THE DEVELOPERS TO HAVE MUSCLE POWER. HOWEVER, IT IS A MUST TO HAVE ALL THE RESOURCES REQUIRED FOR REDEVELOPMENT AND THE GOODWILL OF THE DEVELOPERS, WHICH WILL PLAY AN IMPORTANT ROLE TO GET THE REDEVELOPMENT WORK DONE.

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Raise FSI near stations: Ajit

Mumbai: Deputy chief minister Ajit Pawar wants higher floor space index (FSI) around the city's railway stations. 

    The senior NCP politician made the suggestion on Friday. "Such a move will reduce congestion and pollution. Why can't we think along these lines when we have started building new Metro rail stations?" he said. 
    "Many foreign countries have used FSI up to 15 by upgrading the resources needed for urban settlements," he added. When asked about the issue of regularizing illegal constructions under the cluster policy in Mumbai and other cities, he said, "It was not possible as strengthening civic amenities and public safety were key priorities for the government". Ajit supported doling out concessions to promote affordable housing. To a query regarding seat sharing for the general election, Ajit said NCP chief Sharad Pawar and Congress president Sonia Gandhi would decide on the distribution. —Chittaranjan Tembhekar

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Loan default: Four lenders to auction Hirco’s 1,000 crore Panvel township

Mumbai: Lenders to real estate firm Hirco have put 588 acres of land and even buildings the debt-laden firm owns in Panvel, up for sale. About 380 flats have been sold in the project, which is worth about Rs 1,000 crore. 

    On October 18, TOI had reported that Hirco had defaulted on payments to LIC Housing Finance Ltd, Punjab National Bank (PNB), UCO and Andhra Bank, which had given a loan of over Rs 360 crore to Sunny Vista Realtors, an unit of Hirco. 
    The notice for the electronic auction of land on January 16, 2014, was issued by PNB after the three banks, led by PNB, initiated action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. A reserve price of Rs 805 crore has been fixed. 
    The notice, a copy of which is with the TOI, says that the banks had accepted Hirco's request for the sale of the flats in Hiranandani Palace Gardens and granted a no-objection certificate on the grounds that the entire sale money would be put in an escrow account to be maintained by the banks. The company had failed to do this. 
    A spokesperson for Hiranandani Constructions said managing director Niranjan Hiranandani had dissociated with Hirco three years ago. "As the overseas investors have refused to recapitalize the project firms with the capital needed, the banks have taken this action to protect themselves and their customers. The buyers are protected in Panvel as is clear in the notice." The notice says that any claims on the flats will be settled by the auction purchaser. PNB officials refused to comment. 
    A Hiranandani Constructions spokesperson asserted that the notice has no bearing on the finances of the Hiranandani Group, though it has rung alarm bells in real estate circles. "If the oldest realty firm, Hiranandani, irrespective to its disclaimer about Hirco, is facing financial crisis, it's a sign that correction is inevitable," said a leading banker. 
    Work on Hirco's township projects in Panvel and Chennai, spread across 66 million sq ft, has been stalled for the past few months. HDFC, which had lent about Rs 500 crore to the Chennai project, had earlier warned of attaching the property. 
    Early this year, Tata Finance Capital Services had dragged Hirco to court for defaulting on a Rs 76-crore term loan and demanded its liquidation. A senior executive, who recently resigned from the company, had earlier told TOI that thefirm is mismanaged. "A 1.75-million sq ft commercial building in the Panvel township is 75% complete. It could easily fetch Rs 500 crore," said the executive. Hirco, which is listed on the London Stock Exchange's Alternative Investment Market, was set up in 2006 to invest in residential and commercial complexes. 
    On June 27, chairman David Burton said in the company's half-yearly statement that progress on the developments appeared somewhat subdued with only moderate progress over the last six months. The firm had said in its annual financial statement in September 2012, that the completion of both the Chennai and Panvel projects remained at least a decade away.

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State to unveil city’s cluster redevpt policy on Monday

Nagpur: Chief minister Prithviraj Chavan has ruled out regularizing illegal constructions under the cluster development policy. The guidelines to rebuild the city's old constructions in the form of clusters will be announced on Monday.      Replying to the demand by the saffron combine for a cluster policy in Thane and other cities, Chavan said the policy for other cities will come up within a month. "In Mumbai, there has been a huge response to single-plot redevelopment but unfortunately there were few takers for the cluster policy and only two schemes are being taken up in the entire city," he said.  Sahay death: Probe on      Months after the death of additional DGPRKSahay, the state government is yet to conclude whether the cop died in an accident or committed suicide. "A committee of doctors has been set up," said home minister R R Patil.  '557 prisoners at large'      During the last five years 693 inmates fled from prisons in Maharashtra and only 136 could be arrested again, said home minister R R Patil.  13K died in mishaps: RR      In 2012, nearly 13,333 people died in 66,316 road mishaps in the state. Home minister R R Patil said around 24,323 were seriously injured last year.  Toll exemption for ST buses      Chief minister Prithviraj Chavan announced that the state transport (ST) buses will be exempt from paying toll in future road projects.  'Fraudsters' list to grow'      State home minister R R Patil said the list of fraudsters involved in the Rs 5600-crore National Spot Exchange Ltd scam could grow. "Investigators will need time to unearth more details," he added. "The issue was mostly related to the CBI and the Centre's Forward Markets Commission," Patil said.  36% patrol boats under repair: Patil H ome minister R R Patil announced in the House that the city's policemen will soon get 5,000 bulletproof jackets. "Twelve out of the 33 coastal patrol boats are undergoing repair and tenders to instal CCTV cameras have been floated again," Patil said. Necco Defense Systems, a firm based in Nagpur, was will be supplying the vests, he added. TNN

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Only 7% unsafe bldgs conducted audit: CM

Nagpur:Chief minister Prithviraj Chavan said on Tuesday in the House that out of the six thousand buildings identified for structural audits in Mumbai only 415 had complied with the order.      The BMC had found around 39,534 buildings that were built more than 30 years ago. Of these buildings around 6,242 buildings have been issued notices asking them to conduct structural audits," said Chavan.      In a written reply, Chavan stated that the developers of nearly 421 housing projects approved under the slum rehabilitation scheme had been issued notices for not starting the work within the deadline. "In many cases, it has been found that the work had not been started despite the scheme getting approval for construction, overall development plan and land ownership. It has been found that developers are involved in more than one SRA scheme and indulge in irregularities," Chavan mentioned in his reply. According to him several Slum Rehabilitation Authority (SRA) schemes in the eastern and western suburbs were stuck due to disputes over land reservation and other issues. To another query, CM denied that the Maharashtra Housing Area Development Authority had suffered losses in its Goregaon redevelopment project although an audit revealed a Rs 260-crore loss. —Chittaranjan Tembhekar Mazgaon collapse: 'BMC officials sounded alarm'C hief Minister Prithviraj Chavan revealed that BMC staffers had underlined the need for major structural repairs for a Mazgaon building that collapsed in September and killed 61 people. The recommendation was forwarded to theBMC's planning department and endorsed by the consultants. TNN

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REDEVELOPING THE CITY

Slum rehabilitation is a long process. However, some steps by the government can ease the process considerably.      Slums occupy around 30 per cent of the available land in Mumbai, while being home to almost 60 per cent of the city's population. Any slum rehabilitation project, starts with 70 per cent or more of the eligible hutment dwellers in a slum pocket, having to show their willingness to join the Slum Rehabilitation Scheme (SRS) and come together to form a cooperative housing society through a resolution to that effect.      "The resolution should be adopted for electing a chief promoter, officer bearers and the members of the proposed society. They should collect the information of the proposed members/slum dwellers and fill the Annexure II, prescribed by the Slum Rehabilitation Authority (SRA), along with a request to the SRA/collector-town planning division, for survey/measurement of the plot, showing slum structures therein, with the help of surveyors attached to the office of the additional collector (Enc) of the zone," says Amit Thacker, head, SD Corporation Pvt Ltd.      The next step is to search for a competent developer. The chosen developer also has to appoint an architect, in consultation with the proposed cooperative housing society of slum dwellers, to prepare the development plans of the slum area, as per DCR 33 (10). The next critical milestone of the SRS project is to get the Annexure II issued by the additional collector (Enc), which confirms the eligibility of the slum dwellers and reasons for non-eligibility. This is based on various documents submitted by the slum dwellers prior to January 1, 1995 which is the cut-off date for eligibility. All non-eligible slum dwellers have an alternative to appeal before the secretary SRA, for adjudication of their eligibility.      "There is no central body that maintains uniform records of the slum dwellers. As things stand now, their status needs to be verified by diverse and invariably conflicting records, presented by ration cards, electricity bills, shop licenses, voter ID card and property tax records. It is therefore, difficult to establish the exact time since when many of them reside in the area," points out Ashutosh Limaye, head-research and REIS, Jones Lang LaSalle India.      Meanwhile, the developer also applies to the SRA for the Letter of Intent (LOI). The LOI mentions details regarding the plot area, sanctioned FSI, permissible FSI, number of slum dwellers to be accommodated, reservations and other conditions, to be complied before asking for the Intent of Approval (IOA). After compliance with certain conditions of the LOI, the IOA can be issued and the process of relocation of slum dwellers can be initiated. The residents are usually moved to a rental/transit accommodation.      It is difficult to ascertain the exact time frame for exercising the SRA development in view of involvement of multiple stakeholders in the process. Approval processes for any SRA projects, are more complex as compared to the normal approvals of any residential projects. Hence, many a times, the approvals are delayed and cannot be defined in a certain period. "In SRA projects, the number of tenants required to be resettled are much larger than any otherredevelopment projects. Also, since they are not that aware of the legalities, they need to be handled more patiently, as they demand the world. They see this as a money making opportunity rather than looking at a good life ahead. The entire process therefore, takes much longer than any other normalredevelopment project," explains Diipesh Bhagtani, executive director, Jaycee Homes.      According to Fali Poncha, director-land agency, west, Knight Frank (India) Pvt Ltd, the time to execute an SRA project varies, depending on the plot size, number of slum tenements to be rehabilitated, phasing of the construction of rehab and free sale buildings and receipt of timely permissions from the SRA and the municipal corporation of greater Mumbai. A small project of around 1-2 lakh sq ft can be completed in 3-4 years, whereas, a large project of 10-15 lakh sq ft could take 7-10 years towards completion.      Kaushik More, director, Omkar Realtors and Developers Pvt Ltd, explains how "The key challenge in this segment remains the trust deficit between developers and slum dwellers. This gap can be bridged to a notable extent by a developer's track record and the vision to provide the best quality free housing in Mumbai. Strategies like partnering with the best company in the construction space, etc., can raise the bar in the SRA space." Some challenges faced by developers undertaking slum rehabilitation schemes include additional illegal slum tenements (not counted in the census) claiming the right of rehabilitation, illegal commercial users (shops, small industrial galas, etc.) claiming resettlement rights, dealing with extortionist demands of slum lords, delay in approvals and constraints on construction plans arising from site conditions.      "Each project brings up a different challenge based on the number of tenants, area of the plot, available FSI, zone in which the land for redevelopment is and many more. All these are resolved by analysing the requirement of the project. We cannot have the same yardstick for all projects," adds Bhagtani.      The SRA is one organisation, created by the government, which is a single window for all issues that developers face during the entire redevelopment process. The organisation has been aiding developers, as it has been granted the powers to work out solutions to all problems. "However, in a city like Mumbai, there are many slums near the shoreline, in the Coastal Regulation Zone (CRZ) space. The government must look at better policies for redevelopment of slums in this area, which will aid in the creation of better spaces for slum dwellers and boost the supply of homes in the city," informs Thacker. More further clarifies that the eligibility norms for transfer of structures, need to be detailed out by the state government, in order to put SRS on the fast track. The government is also required to encourage Public Private Partnership (PPP) models in the SRA to bring more transparency in the system. Bhagtani seconds this point "The government should involve real estate developers in a PPP model to eradicate slums." The commercial aspect of the SRA is in the form of cross-subsidisation, where the developer can cover the cost of rehabilitation by selling the free sale component of the SRA project. "However, it is true that footpath dwellers present a problem as there are no clearly defined land parcels attached. Footpath dwellers have to be rehabilitated somewhere and there needs to be a free sale component to make it interesting for developers," concludes Limaye.  QUICK  BYTE      THE TIME TO EXECUTE AN SRA PROJECT VARIES, DEPENDING ON THE PLOT SIZE, NUMBER OF SLUM TENEMENTS TO BE REHABILITATED, PHASING OF THE CONSTRUCTION OF REHAB AND FREE SALE BUILDINGS, AND RECEIPT OF TIMELY PERMISSIONS FROM THE SRA AND THE MUNICIPAL CORPORATION OF GREATER MUMBAI.

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State govt offers double FSI to power urbanization around city

Real Estate Prices May Ease In City And Thane

    More urban setups like Navi Mumbai are expected to spring up from the rural parts and the small towns around the city over the next few decades, powered by a state government move this week to extend to non-corporation areas the same construction potential as available in big cities. 
    The move to apply the development control regulations (DCR) beyond places with a municipal corporation will bring benefits such as double FSI to an area that is collectively three times that of the city in the Mumbai Metropolitan Region, while also promising to bring down the real estate demand and overheated prices in highly urbanized places such as the city, Thane, Mira-Bhayander and Navi Mumbai. 
    The move will fast-track urbanization in the metropolitan region as it will bring in a large stock of cheaper land and housing options together with the promise of better infrastructure. Officials say such development will take the load off the city and Thane. 
    The cheaper land stock is in the jurisdiction of nine municipal councils and nearly 200 nagar panchayats in around 1,000 villages in the metropolitan region. 
    A major fallout of the government decision is the doubling of FSI in these areas from .75 to 1.5 and the offer of various FSI incentives for essential urban needs like housing, institutions, guest houses, IT parks, semigovernment offices, public undertakings, biotech parks, religious buildings, police buildings, public libraries, Mhada schemes and redevelopment projects. 
    The government decision came with chief minister Prithviraj Chavan approving the government resolution named 'Standardized Development Control and Promotion Regulations for Regional Plan Areas in State' four days ago. 
    The decision will be applicable to municipal councils and panchayats across the state. 
    Town planning expert V K Phatak said only increased FSI and FSI incentives would not be enough to attract development and developers, but amenities will also be needed. 
    "Potential and demand will go up only if the government brings in better transportation facilities and civic services in these areas to make them future magnets," he said. "Mere FSI hike can't create demand and will only be able to take care of the supply side and pricing in case of high demand." 
    Other experts said that with the state government move, under-utilization of land in the metropolitan region would go away as available land stock would be optimally used. They said it would slow down the pace of conversion of agricultural land into urban land in these areas as the developable land would be enough to cater to the demand because of the new FSI regime. 
    Officials close to the development said the move also offered FSI incentives against road widening. 
    "The more the width of the road to be widened, the more will be the FSI against the acquired land and road space which can then be utilized for housing and commercial development," an official said. 
    A source in Mantralay said those with houses beside wider roads will get more FSI. 
    "Now that the FSI of the road will be used for housing, the owners will get up to 90% FSI for construction instead of the existing 75% FSI," the source said. "The road width criteria has also been enhanced so that residents get more FSI and better TDR [transfer of development rights] against road widening to make urbanization more attractive for even the residents." 
    TDR is the making available of a certain amount of additional built-up area in lieu of the area relinquished or surrendered by the owner of the land to the government for public projects. 
    Besides taking away height restrictions in building construction, a fungible FSI of .20% has been granted for the buildings to avoid illegalities in constructing balconies, galleries and corridors in the new townships. 
    "In these areas developers will be able to develop terraces on alternate floors in the housing schemes to make the housing more attractive for buyers," a source said. "The land owner will be able to develop the plots reserved by the state for schools and hospitals instead of the state taking these for the same purpose."

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96-cr loan due, realty major loses 3 properties

Mumbai: Three properties owned by Orbit Corporation, a developer listed on the Bombay Stock Exchange, were attached by Life Insurance Corporation Housing Finance Ltd for nonrepayment of Rs 96- crore loan under the Securitisation Act.      Through a public notice on Wednesday, LIC Housing Finance said that it took physical possession of one of the three properties, Orbit Residency Park, which is spread over 1.7 lakh sq ft in Andheri. Orbit's liabilities of Rs 96 crore include repayment of loan availed and the interest on the amount. The orders to attach and take physical possession of the three properties measuring roughly 2.5 lakh sq ft—26,000 sq ft at Orbit Corporation's Lower Parel project Orbit Grand, 1.7 lakh sq ft at Orbit Residency Park in Andheri and 45,600 sq ft space at Orbit Midtown at Lalbaug—were recently passed by chief metropolitan magistrate M B Bage following an application filed by LIC Housing Finance. The attachment order may create problems for the 171 people flat buyers at the three properties.      LIC Housing Finance had sanctioned a loan of Rs 325 crore to Orbit. The three properties were mortgaged for securing the loan along with hypothecated receivables from seven of its luxury projects. Orbit had secured loans from LIC Housing Finance through personal guarantees executed by its directors Ravikiran Aggarwal and Pujit Aggarwal.      Of the Rs 325 crore, Orbit claimed to avail a loan of only Rs 260 crore. A sum of Rs 164 crore from the Rs 260 crore was repaid in 2010. But as the developer failed to repay the balance loan of Rs 96 crore, the housing finance company took action.      In August, LIC Housing Finance had classified Orbit's account as a non-performing asset and served a recovery notice to the developer known for its premium south and central Mumbai developments.      An email query to LIC Housing Finance did not elicit any response.      "We have repaid Rs 164 crore by 2010-end. Only Rs 96 crore was left unpaid. Following the notice, we met with senior LIC Housing Finance officials and reached an understanding for repaying the loan. I suppose this order is part of the legal process they have to follow," said Pujit Aggarwal, MD of Orbit. "No flat buyers will get affected as the order excludes almost 75% of the development. We hope to clear the loan at the earliest."      "The delay in repayment was because the two projects (Orbit Grand and Orbit Residency Park) for which the term loan secured were stuck in regulatory deadlock since 2011. The deadlock stalled construction as well as sales and cash flow," he added. The firm had got regulatory approvals for the two projects in May. Orbit Residency Park in Andheri

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