The MAHARASHTRA government has decided to ease norms for developers investing in Mumbai’s business district of Bandra Kurla Complex (BKC). The Mumbai Metropolitan Region Development Authority (MMRDA) led by Chief Minister Devendra Fadnavis recently approved a proposal relaxing the time period for construction in BKC. Following the decision, developers will now get six years to complete construction instead of four.
At present, a steep fine is collected from developers who are unable to complete construction work within four years. Payment of fees for allotment of plots has also been made easier. The MMRDA has decided to allow developers to make the full payment eight months after allotment – 30 percent in the first month and the rest within eight months – instead of the previous stipulated 50 percent in the first month and the rest within two months.
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The relaxations however, won’t be applicable for plots already allotted, MMRDA officials said. A senior MMRDA official said, “Bid conditions were already specified at the time of allotment, and the authority felt changing them for existing plot holders now will impact MMRDA’s revenue. Moreover, the authority has already collected several crores of rupees as penalties from plot holders. They might ask for the benefit to be extended to them too and the fine to be reimbursed.”
Ironically, the previous Congress-NCP regime had in 2012 similarly decided to ease the time period for completing construction on BKC plots, extending the relaxation even to existing allottees who were holding plots for less than four years. However, the then MMRDA board under former chief minister Prithviraj Chavan stayed the decision following allegations that these perks were being extended to benefit a top business family that is developing a commercial complex on one such plot in BKC’s most sought G-block, and has been unable to meet the four-year deadline. Later in 2013, Chavan ordered that the proposal be dropped altogether.
In the case of existing allotments, the MMRDA has now decided to appoint a retired Supreme Court or a High Court judge to examine if certain relaxations can be granted in penalties for delayed construction. “There has been a persistent demand from plot holders who have blamed time taken in obtaining various statutory permissions for construction delays,” a senior official said.
Before deciding to alter its policy, the authority had appointed CBRE South Asia Pvt Ltd to study MMRDA’s current land allotment policy and recommend changes, if necessary. The real estate consultancy firm had suggested that the tenure for work completion could be extended to six or seven years from four, and the time given to complete payments could be extended to eight months.