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Thursday, September 24, 2020

Maharashtra: State govt announces stress fund for city’s real estate industry

Contending that the real estate sector was witnessing challenging times, Housing Minister Jitendra Awhad on Thursday announced the setting up of a stress fund for all such Slum Rehabilitation Authority (SRA) projects.

By: Express News Service | Mumbai | July 10, 2020 1:13:11 am
itendra Awhad, mumbai real estate, Slum Rehabilitation Authority, sra, mumbai real estate industry, maharashtra govt fund for mumbai real estate industry, mumbai slum redevelopment project, indian express news Housing Minister Jitendra Awhad said the government will invest Rs 700 crore to Rs 1,000 crore as its share in the fund’s initial corpus. (File)

In a shot in the arm for Mumbai’s ailing real estate industry, the state government will set up a special funding window for completion of hundreds of stalled slum redevelopment projects in the city.

Contending that the real estate sector was witnessing challenging times, Housing Minister Jitendra Awhad on Thursday announced the setting up of a stress fund for all such Slum Rehabilitation Authority (SRA) projects. He added that the chief minister had already approved the creation of the alternate investment fund, and that his department will seek the Cabinet’s nod over the proposal in a week.

While modalities are still being worked out, Awhad said the government will invest Rs 700 crore to Rs 1,000 crore as its share in the fund’s initial corpus. “The money (for the stress fund) will be raised through state-run Shivshahi Punarvasan Prakalp Limited (SPPL), while the distribution and management of the fund will be done by a bank,” he added.

The previous BJP-led regime in the state had similarly announced the creation of an alternate investment fund for redevelopment projects, but it hadn’t received the desired response.

More than 370 slum projects are currently stalled, while another 1,351 are at various stages of completion. Nearly 50 per cent of Mumbai residents live in slums.

With several slum developers complaining of a growing liquidity crunch in the post Covid-19 scenario, the government also announced measures aimed at reducing the upfront costs of projects. It granted a nine-month extension for all premium payments due to the SRA.

Premiums payable for open space deficiencies in the rehabilitation component of projects has now been waived, while the maintenance deposit of Rs 40,000 to slum dwellers being rehabilitated will now be payable only after the occupation certificate is obtained for the rehabilitation building. Earlier, the developers were required to pay 50 per cent of this amount before commencing construction of the rehabilitation building.

The government has also universalised the monthly rentals payable to slum dwellers during the construction phase. Accordingly, developers will pay a monthly rent of Rs 12,000 to slum dwellers for projects in the island city, Rs 10,000 for projects in Bandra to Andheri in the western suburbs and up to Ghatkopar in the eastern suburbs, and Rs 8,000 for those in the far-off suburbs.

The bank guarantee amount stipulated for projects on private land will come down from 5 per cent of the project cost to 2 per cent. Premiums payable for clubbing of two or more projects have been reduced by 10 per cent.

The project approval times have also been brought down. There were six levels of scrutiny that were carried out before granting letter of intent (initial permission) for a slum project. This has now been halved.

Awhad further announced that SRA’s intimation of approval will now be granted simultaneously with the issuance of an LOI within a week of receiving an application. Builders will no longer need to submit individual agreements with 51 per cent of slum dwellers at the LOI stage. This can be now be submitted along with the subsequent application for permit to initiate construction.

The government has also empowered the SRA to be the sole authority for finalising the eligibility list of slum dwellers, doing away with the need to approach BMC (for civic-owned lands) and collector’s office (for state lands) for the same.

The SRA will hire a dedicated demolition team to aid rehabilitation projects, Awhad said. He added that no stop work will be issued to projects on the basis of frivolous complaints. “The decision to push slum redevelopment is also keeping in view the city’s readiness to tackle any future pandemic. Mumbai has witnessed an alarming ratio of Covid-19 cases across slums and a proper housing environment will be the key to safeguard lives and prevent any community spread of such diseases going forward,” he said.

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