Mumbai demats TDR, plans online trading

In Mumbai’s construction industry, where a few hundred square metres of additional construction spaces can translate into crores of rupees, TDR certificates are the equivalent of the stock of blue-chip companies.

They are issued to private land owners or developers as compensation for land surrendered to the municipality for a public reservation or road widening, or when they agree to rehouse slum-dwellers or project-affected persons on their land free of cost.

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Another tool for generating TDR is when an owner cannot exploit the full development potential of his plot of land due to heritage restrictions. A builder/owner can transfer the permissible built-up area to another location, or even sell it to another developer.

At present, a small but powerful cartel of slum re-developers controls the TDR market, having cornered most of the slum TDR available.

Official records reveal that slum TDR accounts for 65 per cent of all the TDR available in the market — 2.42 lakh square metres out of 3.75 lakh square metres. There have been long standing complaints that the cartel artificially spikes TDR rates in a bid to retain their control over the market, and has put redevelopment of properties in a jeopardy in the past.

The Maharashtra government’s previous efforts to check this unethical practice haven’t yielded desired results so far. In a fresh bid now, the BMC has initiated dematerialisation of these certificates. Municipal Commissioner Ajoy Mehta confirmed that the civic body was working with the Stock Holding Corporation of India Limited (SHCIL) for this demat option.

As per the arrangement, SHCIL is to develop a customised online solution that digitises all the TDR certificates, which will be integrated with AutoDCR, the civic body’s online platform for building approvals.

A senior official said once this was done within two months, the whole data regarding the availability and the quantity of TDR and its holder would be available in public domain.

“Anyone aspiring to transact in TDR for utilisation will be available to access this data without having to rely on agents, liaisoners, and civic officials. The TDR holders will be asked to quote an estimate at which they plan to sell the development rights. A prospective buyer will have the option of comparing all quotes before making his choice,” said a senior official.

Besides this, the Maharashtra government’s housing policy indicates that there is also a consideration to permit the trading of TDR on stock exchanges in the medium term. Civic officials feel that the demat form of TDRs would go a long way in ushering in transparency and preventing hoarding by the cartel.

The BMC has already indicated that it plans to permit utilisation of TDR across Mumbai — currently it can be loaded on suburban projects only. It has also proposed to link TDR certificate to ready reckoner rates of the area from where it is generated, and the region where it is loaded to cut down on its misuse.

Sunil Mantri of Mantri Realty said, “This is a welcome move. It promises to bring in more transparency in TDR dealings.” Further, to promote more generation and utilisation of reservation TDR, the BMC, which is revising development control regulations, is expected to introduce procedural changes in the rules for TDR utilisation.

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