BMC cuts developer slack to 'save money', activists feel otherwise

Nov 27, 2018, 08:27 IST | Sanjeev Shivadekar

Going back on its earlier plan to recover charges from the developer for 'inferior quality housing units', civic body proposes letting builder construct the new ones himself

BMC cuts developer slack to 'save money', activists feel otherwise
The plot in Gomata Nagar, Lower Parel, where the steel PAP units were built and later demolished. Pic/Ashish Raje

It seems all's not well with the civic body — it had proposed to recover Rs 70.66 core from Skylark Buildcon for handing over housing units of inferior quality to relocate project-affected people (PAP), but the administration has now decided to settle the issue with the developer by asking him to construct new housing units for the PAP and hand them over to the Brihanmumbai Municipal Corporation (BMC).

What happened
The PAP are those found living next to a nullah near the Shree Sai Sunder Nagar slum rehabilitation project in Worli. Twelve to 15 years back, the developer constructed ground-plus-seven storey structures having 608 flats of 225 square feet each for them free of cost on a vacant plot in Lower Parel provided by the BMC. The developer, in exchange, got transfer of development rights (TDR).

Under the DCR (Development Control Rules) 33 (10), developers are given TDR for building permanent accommodation to cross-subsidise the scheme. But when the estate department inspected the properties, it claimed that instead of constructing RCC (reinforced cement concrete) structures, the firm had erected steel ones. A couple of years back, these were pulled down on the ground that they were in a bad condition and not fit for habitation.

In 2016, BMC asked the developer to pay Rs 70.66 crore for flouting contract norms. "A letter mentioning Rs 70.66 crore as charges was even forwarded to the Slum Rehabilitation Authority," the BMC proposal stated. The developer, however, contested the civic administration's claims, and the BMC, it appears, has meekly accepted his arguments. The proposal is now on the improvement committee's agenda. The meeting was scheduled on November 20 but had to be adjourned after the death of Union minister Ananth Kumar on November 12.

Developer's defence
Skylark Buildcon Private is owned by Sudhakar Shetty and his family members. Shetty is known for his good equations with political leaders across party lines. Speaking to mid-day, Shetty refuted all charges. "The structure was made of steel. It cannot get damaged. It is the families on the premises who damaged it," he said, further claiming that even BMC's calculation to arrive at Rs 70.66 crore was wrong. "I explained that to civic officials and they agreed with me. Hence, we have now been asked to construct new housing units of 300 square feet each."

According to Shetty, new units will be ground-plus-15 storey structures. "The new structures will be made from RCC; if maintained properly, these will last for at least 40 years, if not more. The buildings will be ready in two to three years, and till then, our firm will pay an annual rent of nearly Rs 1.25 crore," he added.

An eyewash?
Housing activists are not buying it though. They see the whole transaction as something to bail the developer out. "The construction cost of new housing units is much less than the charges BMC had planned to recover from the developer. It could have easily saved a few crores had it gone ahead with the recovery, and later, constructed new houses on its own. By not doing this, BMC is trying to help the developer," an activist said.

However, like Shetty, civic officials, too, see nothing wrong in the proposal. A senior civic official said there is no loss to the BMC. "Those who don't understand the dynamics of the construction industry may feel that BMC is losing revenue or helping the developer, but that's not the case. SRA believes it would have cost BMC a lot to construct these units. Hence, on its suggestion, the developer was offered the alternative," the official added.

Another official said, "BMC had to demolish the PAP units as they were dilapidated. It had planned to recover the cost it would have incurred on new units, but the developer is ready to build the same himself. Ultimately, what the corporation wants is housing units for the displaced, not money."

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