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Building permits account for almost half of construction cost

Mumbai was ranked as the world’s 12th most expensive city to live and work in by global real estate giant Savills’ in 2014.

building permit, world bank report, world bank, mumbai building permit, construction, building construction, Savills’ , mumbai news, city news, local news, maharashtra nes, Indian Express Anti-Corruption Bureau chief Praveen Dixit had earlier referred to rampant corruption while issuing building permits in Mumbai.

Construction permits account for almost half the cost of construction in Greater Mumbai, says a World Bank report.

“The cost of construction permit in Greater Mumbai is 46.05 per cent of the cost of construction,” it says. The report highlights that it takes 27 steps and 162 days to obtain a construction permit. For almost each of these steps, the developer or the land owner has to pay fees for obtaining construction permits.

While the report has already prompted the state to re-engineer and simplify the process of obtaining a construction permit, senior officials said the state government and Brihanmumbai Municipal Corporation are yet to take steps to bring down the cost of obtaining such permits.

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On June 10, Chief Minister Devendra Fadnavis declared that his government had plans to extend the regime of allotting additional floor space index-ratio of built-up area to total plot area, which exists in the suburbs of Mumbai, to Thane and other areas in the Mumbai Metropolitan Region. Builders present at the meeting when the announcement was made sought decrease of the premium, which is charged on the basis of prevalent ready reckoner rates.

Anti-Corruption Bureau chief Praveen Dixit had earlier referred to rampant corruption while issuing building permits in Mumbai.

To improve the business climate in Mumbai, the BMC, acting on Fadnavis’s directives, issued fresh guidelines to “simplify the construction permit process and reduce the time by eliminating certain procedures”. It also allowed self-certification for declarations pertaining to property tax, pest control and debris removal at the under-construction site, while allowing third party certification for internal road layout, internal sewerage systems, parking layouts and vehicle movement within the plot, storm water drain and water requirements. A circular in this regard has been issued to all wards and building proposals’ office in the city.

However, a senior official said that no decision had been taken regarding the cost of permits.”The long-term plan is to move towards an IT-enabled single-window clearance system. This will cut red tape, which in turn will automatically impact the costs involved in obtaining permits,” a senior civic official said. Incidentally, the Fadnavis government recently decided to charge premium for compensatory and additional FSI at prevalent ready reckoner rates. The ready reckoner of 2008 was previously applicable.

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Mumbai was ranked as the world’s 12th most expensive city to live and work in by global real estate giant Savills’ in 2014.

First published on: 13-06-2015 at 01:07:00 am
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