Building block: Over 2000 redevelopment projects stuck
The real estate market in Mumbai may still be one of the hottest in the country, but the powerful builder’s lobby is not happy. One major reason: nearly 2,000 redevelopment projects, worth a staggering Rs 35,000-40,000 crore are stuck in the pipeline.
Many such buildings that should undergo redevelopment are stuck in red tape. File Photo
Speaking to sunday mid-day, Anand Gupta, treasurer of the Builders Association of India, said, “The number of redevelopment projects that are stuck in red tape is nearly 2,000. Those stuck under Development Control Rules 33 (7) alone number more than 700. Many Slum Rehabilitation Authority (SRA) and Maharashtra Housing and Development Authority (MHADA) projects are stuck too.”
According to Gupta a new directive from Supreme Court that instructs builders to keep six metres space between two buildings while constructing any property, is another reason why many redevelopment projects are caught in red tape. Gupta claims this new rule leaves builders with little scope for redevelopment as most old buildings were built very close to each other, and leaving six metres space is a loss builders are unable to make up.
Rajesh Vardhan, managing director of Vardhaman Group said, “I think the amount would be well above R35,000 crore. Expenses for construction have gone up considerably. We have to pay extra for the FSI now, thus escalating the prices. Also we have to reserve homes for the economically weaker sections in many redevelopment projects.”
According to the Builders Association, at least 400 files are stuck at the BMC for approvals. Vardhan agrees that the space that has to be left between two buildings has seriously affected redevelopment plans of nearly 16,000 buildings located in South Mumbai alone.
The number of stalled redevelopment projects in Colaba, Worli, Byculla and other areas of south Mumbai are a serious cause for concern, according to a senior builder. Vardhan added that builders are not expecting much change in 2014 because after the Lok Sabha elections, the state would go for assembly elections in October.
While, builders claim that the government is mostly responsible for the redevelopment projects being stuck, Dr Sanjay Chaturvedi, editor, Accommodation Times, claims that it is the market forces that are responsible for the slow work. “There’s a liquidity crunch in the market, and builders are shying away from taking up projects. This is the prime reason why redevelopment is stuck,” he added.
>> Stuck projects worth Rs 35,000-40,000 crore
>> 16,000 projects in South Mumbai alone
>> Builders do not expect files to be cleared this year