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Friday, January 16, 2015

City developers don't need MoEF's approval

State Authority Will Now Give Environment Clearances
Developers of big building projects will no longer have to go to New Delhi for environmental clearances (EC). In a notification issued late last month, the ministry of environment and forests (MoEF) has said all general conditions of the Environment Notification 2006 will not apply for all constructions above two lakh sq feet.

The general conditions of the Environment Impact Assessment Notification 2006 applied to areas classified as ecosensitive areas, critically polluted areas, inter-state boundaries and international boundaries.

Eco-sensitive areas are a buffer zone spread 10 km around national parks, wildlife sanctuaries and protected areas. For instance, the Sanjay Gandhi National Park is a protected area and on December 3, the MoEF issued a notification that all proposed projects within a 10 km radius of such areas will need the National Wildlife Board's nod. Sources said now even for the wildlife board's clearance, developers will not have to go to Delhi. Instead, project proposals have to be submitted to the State Environment Appraisal Committee-2 (SEAC-2) that scrutinises all projects in the Mumbai Metropolitan Region. If it feels a clearance from the NWLB is necessary , it will forward the same to the Board. It will then be sent to the State Environment Impact Assessment Authority . The notification is a relief for projects in Dahisar, Borivli, Kandivli, Malad, Gore gaon, Bhandup, Mulund and Thane. The notification exempted schools, colleges, hostels for educational purposes and industrial sheds from seeking an EC even from the state authority .

However, the MoEF is yet to re-constitute SEAC-2. The previous committee's tenure ended in June. "In the absence of SEAC-2, all projects need to be submitted to the MoEF . So it will be sometime before the effects are seen here," sources said.


Wednesday, January 14, 2015

Will proposed TDR rules hamper redevelopment?

Mumbai: Upcoming realty projects will become more expensive if the Maharashtra government passes a proposal to change the rules about usage of Transfer of Development Right (TDR). Besides, the government's decision will adversely impact the redevelopment of 89,000 old and dilapidated buildings in Mumbai.

The Devendra Fadnavis government proposes to link the usage of the Transfer of Development Right (TDR) to the width of the roads adjoining to the project.

According to the state government's draft circular, the developers will not be able to use TDR in projects which are next to a road narrower than 9 metres. Interestingly, in Mumbai, 80% roads are narrower than 9m. Only a few roads are wider than 30m, including SV Road and Link Road.

TDR is virtual space, given in lieu of reserved space, by the state government. A plot-owner gets TDR if his plot is reserved for a specific purpose (like a school or a playground) and cannot be built upon. In exchange for giving up that land, the plot-owner gets virtual space (TDR) which he can sell in the open market.

Developers buy TDR to add more floors to their buildings. A week ago, TDR was sold at Rs3,500 per sq ft, and the rate has now shot up to Rs5,000 per sq ft. It is because of the linking of the TDR to the width of the road.

"Developers are in a hurry to buy the TDR and complete the projects before this new uniform TDR policy comes into force. The TDR lobby has increased rates and is making money over this circular," said Sunil Mantri, president of NAREDCO, the developers' umbrella body.

At present, the developers are allowed to use one TDR irrespective of the width of the roads.

The government's draft circular, however, says, "Now, higher the width of the road, more the TDR to be used by the developers along with the available floor space index (FSI) of 1 for his project. If the road width is between 12m to 18m, then 0.75 TDR will be used. For the road width between 18m to 24m, one TDR will be uploaded. For road width between 24m-to-30m, 1.25 TDR can be uploaded. If the road width is more than 30m, the developer can use 1.50 TDR."

Mantri said that the government is changing TDR rules without adequate contemplation.

"Because of this proposed decision, redevelopment of 89,000 buildings will come to a grinding halt. Redevelopment will become financially unfeasible for developers. Besides, these buildings need urgent reconstruction because most of them are crumbling. The state government should review its proposed decision in the larger interest of the city and end users," Mantri said.

Senior architect Milind Samel requested the state government for one year's waiver of the new rules in which developers could complete existing projects.

The draft circular, however, leaves a loophole for Mumbai itself. The circular is applicable to all municipal bodies formed under the Bombay Provisional Municipal Corporation (BPMC) Act 1949 or Municipality Act. But the BMC, formed in 1888, has its own Act and policies. A developer said, "We are really confused whether this circular will be applicable to Mumbai or not. Mumbai has always got different policies and norms than the rest of the state. The state government should clarify this point, otherwise the TDR lobby will exploit the developers by raising TDR rates."


Tuesday, January 13, 2015

Bldrs jittery as TDR linked to road width

A new transfer of development rights (TDR) policy cleared by chief minister Devendra Fadnavis has unnerved Mumbai's builders because it will restrict the height of buildings on narrow roads in the suburbs.

The policy, aimed at reducing the burden on civic infrastructure, links all construction to the width of the road on which a plot stands. In a nutshell, narrower the road, lesser will be the floor space index (FSI); wider the road, bigger the construction right given to a developer through TDR. Developers complained the new rules will make most redevelopment projects unviable. "If the modification is implemented in Mumbai, all redevelopment projects will be affected. More than 500 buildings are currently in process," said architect Manoj Daisaria.

Others say the step can curb unabated construction of tall buildings on narrow roads that pressure the crumbling civic infrastructure. Town planners and activists have for years complained about towers on narrow roads, especially in areas like Bandra, Khar and Santa Cruz because of TDR. The state government is expected to issue a notification soon, inviting objections and suggestions.

TDR is a vital tool for builders because it allows them construction rights over and above the normal FSI currently permitted when they construct or redevelop buildings in suburban Mumbai. TDR is generated when the developerowner surrenders land to the state and agrees to re-house slumdwellers or project-affected persons free of cost. In turn, a TDR certificate gives him additional construction rights in the suburbs, but only to the north of the surrendered plot.

On Monday , the construction industry was still uncer tain on whether the proposed policy applied to Mumbai or not. When contacted, the government's new urban development department secretary Nitin Kareer said: "I will have to check."

Government documents made available show that the FSI of 2 available to building projects on roads 9.15m wide could be reduced to 1.5. For instance, on a 1,000sq m Bandra plot, a developer is today entitled to build 2,000sq m (FSI 2).Now the same plot can consume only 1,500sq m (FSI 1.5).

On a 13.4m road, the FSI has been cut from 2 to 1.75. It means the total built-up area reduces from 2,000sq m to 1,750sq m on a 1,000sq m plot.

However, for redevelopment projects on roads 30m across or more, the FSI has been increased from 2 to 2.5.

Experts say about 40-45% of Mumbai's road are between 9.15m and 13.4m wide. "This will make redevelopment projects either unviable or slash builders' profit margins,'' said a builder. More than 60% of plots in Bandra, Khar, Santa Cruz, and in town-planning schemes are next to roads of such width.

Industry sources said a builder executing a redevelopment project today can retain 3540% of the total built-up area for free sale with FSI 2. With the new proposal, the sale component will fall by 25-30%."This is not adequate to cover the cost of construction, cost of buying TDR from the market and other incidental costs. Today , the thumb rule is 60% goes to existing occupants and 40% for free sale," one source said.

The plan to increase FSI for roads 30m wide or more will benefit projects abutting roads like LBS Marg, SV Road, JVLR, SCLR and E Moses Road. For example, a builder redeveloping a 1,000sq m plot currently can avail of 2,000sq m to build with FSI 2. Under the new rule, he will get 2,500sq m to build. But activists fear this will add more traffic on such roads and defeat the government's move to reduce congestion.

The government also wants to make TDR utilization universal in the suburbs. Today , TDR generated can be used only north of that plot.Now it is proposed to be used anywhere in the suburbs by charging a premium based on the ready reckoner rate.


Saturday, January 10, 2015

TOI EXCLUSIVE - Nine landowners control a fifth of city's habitable area

Godrejs Have Biggest Chunk, With 3,401 Acres
Who owns Mumbai, a city where land is scarce and where every square foot of space fetches a huge premium?
A preliminary survey carried out by the Slum Rehabilitation Authority (SRA) last month stumbled upon interesting figures--just nine private land owners and private trusts control around 6,600 acres in Greater Mumbai, whose limits stretch from Colaba to Dahisar in the western suburbs and up to Mulund in the eastern subur bs. The city itself covers an area of approximately 1.07 lakh acres, of which the habitable area is roughly 34,000 acres. So the nine entities own 19.4%-or almost a fifth--of Mumbai's total habitable area.

The SRA, which collated land-holding data from three tehsils in the city--Borivli, Kurla and Andheri--found that roughly 3,000 of these 6,600 acres have been completely encroached upon and occupied by slum dwellers. The survey was done after the state government warned Mumbai's five biggest land owners that it would acquire their encroached land if they failed to redevelop it under the slum rehab scheme. Under this scheme, plot owners developers must relocate slum dwellers free of cost on a portion of the land. In Mumbai, where land is at a premium, just nine private land owners and private trusts control around a fifth of the total habitable area, a survey done by the Slum Rehabilitation Authority (SRA) has found. The survey was done after the state government warned Mumbai's five biggest land owners to redevelop their encroached land under the slum rehab scheme and said in return, the owner will receive additional construction rights to utilize the remaining land portion to build luxury housing to be sold in the open market.

The records show Mumbai's biggest land owners are Godrej & Boyce, the Byramjee Jeejeebhoy Group, A H Wadia Trust, F E Dinshaw Trust, Sir Mohammed Yusuf Khot Trust, Hirjibhai Dinshaw Billimoria, Jeejeebhoy Ardeshir, and the families of V K Lal and Pratapsingh Surji Vallabhdas Khot. Their lands are spread across Kurla, Bhandup, Vikhroli, Deonar, Malad and Goregaon.

The state government had earlier estimated total encroached land of the five biggest land owners to be about 2,000 acres (equivalent to around 80 Azad Maidans). However, the SRA survey found the figure to be much higher, at around 3,000 acres.

The five owners that the government had named were the F E Dinshaw Trust (controlled by Nusli Wadia), A H Wadia Trust (whose managing trustee is Muncher Cama of Mumbai Samachar), the Byramjee Jeejeebhoy family , the V K Lal family and the Mohammed Yusuf Khot Trust.

But the subsequent SRA report showed that Godrej & Boyce holds the largest parcel of land in the city , with 3,401 acres in its control. Although a large chunk of this land is a well-protected mangrove sprawl in Vikhroli, the slum authority estimates that at least 300 acres near Vikhroli station have been encroached upon. The industrialist Godrej family acquired its land in the eastern suburbs sometime in the early 1940s from the Bombay high court receiver.This land was originally given by the East India Company to Parsi merchant Framjee Banaji in the 1830s and came up for sale in 1941-42.After acquiring this land, the Godrejs started buying adjoining plots by negotiat ing with 200 plot owners. In the past decade, the Godrej Group has become one of the leading real estate players in Mumbai because of its sprawling land holdings.

Another big land owner is the family of the late Pratap Singh Surji Vallabhdas, which SRA record shows controls 647 acres in Bhandup. Vallabhdas was a 20th century land owner with properties in Hariyalli village, Ghatkopar and Vile Parle. He was also chairman of the Arya Samaj Committee. The Vallabhdas family is currently redeveloping a 60-acre slum sprawl in Vikhroli in a joint venture with HCC.

Records show that the Sir Mohammad Yusuf Khot Trust holds 249 acres in what is called the Kanjur Khot in the eastern suburbs.Khot was an early 20th century educationist and philanthropist and owner of the Bombay Steam Navigation Company . Most of the trust's land in Powai has been leased to private firms like L&T. The trust land in Bhandup and Kanjur has been fully encroached upon by slum dwellers.

The slum authority survey also lists the Nusli Wadia-controlled F E Dinshaw Trust holding 683 acres in MaladKanheri area in the western suburbs. F E Dinshaw was a Parsi solicitor-financer and also a big land owner, who died in 1936. Two decades ago, the trust entered into an agreement with the Rahejas, one of Mumbai's oldest develop ers, to develop trust property in Malad, Dindoshi and Kandivli. The Mindspace IT park in Malad, spread over 110 acres, is part of this sprawl. In the 1970s, the trust controlled about 1,500 acres but subsequently a large chunk of it was acquired by the government under the Urban Land Ceiling Act. About 800 acres was taken by the forest depart ment and another 65 acres acquired by Mhada for lowcost public housing. The Goregaon sports club and the BMC's Malad reservoir are located on land that once belonged to this trust.

The Ardeshir Hormusji Wadia Trust control 361 acres in Kurla, according to the SRA survey . "We cannot speculate on our land holding unless we take an audit," said one of the trustees, who did not wish to be identified."A lot of our land was acquired by the government decades ago, but it was returned to us completely encroached," he said.

The trustee added that many builders had approached the trust since the last month, offering to rehabilitate slum dwellers and redevelop the land. In the early 20th century , the Cama family of Mumbai Samachar, which manages the trust, owned 13rd of the land in Chembur.

In the early part of the 19th century , Ardeshir Hormusji Wadia was given the lease for Kurla, which comprised the six villages of Mohili, Kole Kalyan, Marol, Sahar, Asalphe and Parjapur, for a yearly rent of Rs 3,587.Most of the trust's Kurla land is now completely en croached.

The Byramjee Jeejeebhoy Group is shown to own 269 acres in Majas, Mogra and Oshiwara in the western suburbs. But a company spokesperson debunked this figure and said it had sold its land parcels years ago. "The ownership changed hands a long ago, yet the government comes up with these ridiculous land-holding figures from time to time," he said.

Sir Byramjee Jeejeebhoy was a 19th century Parsi philanthropist. The East India Company gave him seven villages between Jogeshwari and Borivli in 1830, totalling 12,000 acres. He also owned Bandra Land's End where the Taj Hotel is now located. Thakur Complex in Kandivli and Lokhandwala Complex in Oshiwara came up on land belonging to the Jeejeebhoys.

Another big land owner is the Agboatwala family , which owned 3,200 acres in Dahisar in the late 19th century . In the 1930s, about 800 acres was given by the government to the local tillers in Dahisar. In 1966, a family dispute led to the court receiver selling another 644 acres to businessman V K Lal in a public auction. Another 700 to 800 acres was acquired for the national park."We are in the process of resolving a lot of old litigation wherein these lands were alienated to wrongful occupants. We hope to get justice from the courts," said Ateeq A Agboatwala, a descendant of the original landlord, Hajee Alimohammed Agboatwala. The SRA estimates that about 70 to 100 acres held by V K Lal Properties in Kandivli has been encroached upon.


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