October 20, 2020

BMC to allow private parties to redevelop 674 plots in Mumbai

MUMBAI: The cash-strapped BMC is to allow private parties to redevelop 674 of its plots across the city. These plots were given on tenancy decades ago. The civic administration’s finances hit badly because of the pandemic, so now they want to monetize its real estate.
Now developers have to pay 62.5 % of the land cost for residential building construction. However, for commercial buildings, they will have to pay 125 % and that’s how they can use the plot’s entire development potential for their profit. The civic body has also decided to allow conversion of these ‘tenancy plots’ to ‘lease-hold plots’ for 60 years, thereby giving the leaseholder virtual ownership of the plots.
The BMC general body cleared the policy in March 2019 and recently, the administration has introduced the guidelines.

According to the sources BMC could earn “thousands of crores” as a one-time premium through these plots. The BMC has also warned tenancy holders to come forward and get this benefit. If they don’t do so their tenancy rights and auction the plots will be canceled.

These plots were vacant since 1937 when given on a tenancy. The corporation charged very less rent from the occupant, and no development was allowed without the civic authority’s permission.

The guidelines further say that the corporation will charge a one-time premium to the tenancy holder to hand over the plot to them for their use on a 30-year lease. It can further be extended for another 30-year period.

“We are allowing utilization of construction potential of these plots after charging a one-time premium,” said Deputy municipal commissioner Ramesh Pawar.

Illegal construction was made on many of these plots over the years. The BMC could not take them back as tenants are protected under the Rent Act. The tenants of these plots can’t develop them without BMC permission. “The new policy is a win-win situation for both. Most of these plots are in Island city,” said civic officials.

Architect and former president of Practicing Engineers, Architects and Town Planner Association, Shirish Sukhatme said, “BMC is virtually selling these plots by charging a huge one-time premium after giving all development rights to the leaseholder. It’s like a win-win situation for both. Many such plots which saw illegal construction over the years due to negligence of BMC officials and the civic authority are not earning anything from these structures.”

He further said, “It will generate good revenue for the BMC. But to make it more popular, instead of charging a one- time premium of the ready reckoner rate of the entire plot, the BMC should charge it according to the available balance FSI on the plot, as the developer needs to accommodate the existing tenants.”

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