Builder's kin turn paupers for FSI

Apr 06, 2012, 17:14 IST | Varun Singh

Builder of India's first slum redevelopment project inserts names of relatives, office bearers to fluff up numbers to get extra FSI; confronted by complaints, MIDC, whose land is to be redeveloped, simply erases the names and moves on

Builder of India's first slum redevelopment project inserts names of relatives, office bearers to fluff up numbers to get extra FSI; confronted by complaints, MIDC, whose land is to be redeveloped, simply erases the names and moves on

In a city crunched for space and now the most crowded, builders can engineer the most calculating and manipulative schemes to squeeze out the tiniest bit of room to pile on the profits. Including trying to pass off spouses and brethren as slum dwellers on the land to be redeveloped. MiD DAY's probes into the country's first slum redevelopment project reveal as much.

The contentious project: The rehabilitation buildings constructed by
Ackruti City builders in 2006 to accommodate slum dwellers. As per
MIDC officials, 30 per cent of the redevelopment project is pending.

The builder, Ackruti City, that undertook India's maiden redevelopment project on slum-encroached MIDC (Maharashtra Industrial Development Corporation) land in Andheri (East) allegedly doctored documents to show some 92 people, related to the builder in a personal or professional capacity, as residing in the slums.
Activists allege it was to claim extra FSI on the saleable component of the land, which spans an area of 1.5-2 lakh sq m, is valued at Rs 6,000 crore.

Further, MIDC, the government agency to commission the redevelopment, curiously remained unsuspicious and passive to the "glitch", even though it received complaints about the anomalies. However, it removed the contentious names from the list of slum dwellers and buried the matter. While some realty experts claim such builders should be blacklisted, others demand action against MIDC officials in on the scam. Activists explain away the whole deal with one word: illegal.

Scam origins
In the year 1993, MIDC decided to get rid of 4,600 shanties on its massive chunk of land in Andheri (East). It floated a global tender, and in 1995-96, Ackruti City's bid was accepted to redevelop an area of 1.31 lakh sq m.
Of this, the builder had to hand over 22.5 per cent of land, free of any encroachments, back to MIDC. On the remainder, he was to construct buildings for slum dwellers and make profits from the saleable component.

Density pays dividends: Experts say that the more the concentration of
slum dwellers in a pocket, the more is the FSI allotted to the builder
during redevelopment. representation pic

According to the tender, the rehabilitation, the construction and the final transfer was to be completed by 2005. Incidentally, even with 2012 around the corner, the project is mired in controversy, and the deadline to finish the project has been extended to 2013.

Things sailed smoothly for Ackruti and the MIDC for 13 long years, and then filtered in the first hint of wrongdoing. In 2006, MIDC received complaints from certain slum dwellers, claiming that family members and even office bearers of the promoter of Ackruti City Limited, Vimal aka Vyomesh Shah, had been named as slum dwellers.

After MIDC received the letters, it deleted the names of the 92 "slum dwellers" from Annexure II (a document detailing the names of slum dwellers in a redevelopment project, see box) in November the same year.

Some of the names were of Rajendra Kantilal Shah, Hemant Dhanki, Falguni Shah, Hemant Parekh, Nutan Dhanki, Rajendra Kantilal Shah, Alpa Shah, S Mayur, E C Paulose, Nancy Periera and Rajeevan Paramban. All these persons are either related to Vimal Shah or work in his firm.

More the merrier
According to RTI activist Amit Maru, these names matched the ones in the documents submitted by Ackruti to Bombay Stock Exchange in 2009; the documents stated their actual association with Shah. Having procured the information through RTI, Maru wrote to MIDC in October, citing how out of the nine pockets, numbered 1-9, in the overall land the builder is redeveloping, the builder's kin have been shown to be residing.

"In Annexure II, Falguni Shah was shown as a slum dweller in pocket number four of the redevelopment, whereas the letter to BSE clearly states her as the wife of Vimal Shah. Nancy Pereira was shown as a slum dweller in pocket six whereas the person is the chief accounts officer in Ackruti. Rajendra Kantilal Shah shown to be dwelling in pocket four holds the post of chief finance officer in the firm. Hemant Dhanki is the brother-in-law of the Shah and was shown to be residing in pocket four. E C Paulose is the chief civil engineer, but was shown as a slum dweller in pocket six, and so on," said Maru, adding, "This amounts to cheating and falsification of documents." Explaining how the profits from the glitch may have accrued to the builder, Maru said, "The higher the density of the slum dwellers, the more FSI the builder gets." Thereby, giving him more to sell and more to earn.

All documents corroborating Maru's claims are in MiD DAY's possession, along with the letter that confirms that Ackruti and MIDC officials jointly conducted the survey to identify the slum dwellers. Maru's biggest contention is how the names of the illegal slum dwellers reached Annexure II, a document that has the names of eligible slum dwellers. In his complaint to the MIDC, he has asked for the entire project to be declared as illegal as the builder has seemingly forged documents.

Annexure II
Annexure II is a document bearing the names of eligible slum dwellers. It is prepared after the slum dwellers furbish documents substantiating that they have been staying in that particular slum before 1995 and own a shanty there. Only after the documents are verified to be correct and legitimate, are the names of the slum dwellers entered in Annexure II.

The other side
On October 20, this reporter sent a mail to the PR agency for Ackruti City Limited, and on October 31, met with its office staff. However, they didn't respond to any of our queries about how the names of Ackruti's office bearers and its promoter's family members appeared as slum dwellers.
The reporter then contacted the CEO of MIDC, K Shivaji, who directed him to Chief Engineer R V Sonje, who along with his deputy and other engineers, answered some queries.
Asked how MIDC came to know of the presence of the illegal names, an MIDC official said, "We received complaints and we immediately acted on the letter and asked the builder to remove the names of the 92 illegal slum dwellers."
The MIDC denied taking action against the builder or its own officers responsible for preparing the faulty list of slum dwellers. "In the tender, there are no rules pertaining to any action against the builder. We just deleted the names of the 92 ineligible slum dwellers, and added other eligible ones from the waiting list," said the official.

Pocketing the gains
The 92 persons who were termed as ineligible slum dwellers were shown in Annexure II to be residing in different parts of the MIDC land which has nine pockets in all:

Pocket     No of ineligible
Number    slum dwellers

5              32
4              23
9              15
6              22

'Blacklist the builder'
Sanjay Chaturvedi, executive editor of fortnightly newspaper Accommodation Times, said, "The moment the authority realised that there is a goof-up in Annexure II bearing the names of slum dwellers, it should have initiated action against the builder and blacklisted him from doing any work for any government agency."

Advocate Vinod Sampat, president, Cooperative Societies Residents, Users and Welfare Association,
said, "In such cases, the agency should first take action against its own men responsible for the preparation of the list, and also against the builder or whosoever is responsible for the goof-up."

Money matters: Rs 6k cr property
Assessing the current real estate value of the project, MiD DAY came up with the following findings.
According to a senior MIDC official, 1.31 lakh sq m of land is to be redeveloped of which 22.5 per cent is to be returned to MIDC, free of slum encroachments.

Thus the builder is left with nearly 1.05 lakh sq m. In this, he has to accommodate 4,600 slum dwellers in houses of 225 sq ft each (rehab component). Any remainder is his to build upon and sell (saleable component). For both the rehab and saleable components, he gets an average FSI of 2.5, and in some locations, depending on the density of the slum dwellers, he gets an FSI of 3. As such, with an FSI or 2.5-3, the area goes up to 2.5-3 lakh sq m.

As per calculations, nearly 1 lakh sq m would be used up rehabilitating slum dwellers. So the builder is now left with 1.5-2 lakh sq m as his saleable component, which he can exploit commercially or residentially. If one calculates the value of the total saleable area in terms of commercial rates -- around Rs 3 lakh per sq m in the area today -- it works out to be around Rs 6,000 crore.

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