Norms amended; IT parks can now house financial firms too

In a windfall for a section of commercial real estate developers,the state government has largely diluted the norms for IT parks to allow financial institutions and other commercial offices in them.

The state government had earlier granted IT parks double the floor space index (FSI) allowed for normal commercial buildings with the stated reason of giving a boost to the IT industry in Mumbai. The state has recently issued a final notification amending the rule to allow not only IT and ITES units but also banks and other financial institutions in up to 80 per cent of the total constructed space in an IT park. The remaining 20 per cent can be used for other office space. The amendment effectively allows developers to rent out the entire complex for more profitable ventures than merely IT-ITES units. The government notification states that the move is necessary to “support efforts to develop Mumbai as an International Financial Centre and generate more employment in financial services”. It further states that the municipal commissioner is free to relax the provisions for compulsory open spaces and parking “in case of demonstrable hardship”. The decision is set to benefit several developers especially those developing swanky office space in Central Mumbai’s erstwhile mill lands. These projects have already availed of the increased 2.66 FSI granted to IT parks as against the normal 1.33 FSI prevailing in the island city.

The Development Control Rules (DCR) 33 (16) that governs additional FSI for IT parks has been amended time and again. Initially,the extra FSI was made available for only IT establishments set up by public bodies like Maharashtra Housing and Area Development Authority (MHADA),SEEPZ industrial area,Maharashtra Industrial Development Corporation ( MIDC) and City and Industrial Development Corporation (CIDCO). The rule was amended later to extend the extra FSI to even privately constructed IT parks.

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“In 2007,the state government decided to allow financial services in IT parks provided that at least 50 per cent of the area is reserved for IT/ITES activities,” said a state government official.

“The decision is very unfair to the developers who created commercial space without resorting to any manipulation,” said Pranay Vakil,chairman of property consultancy Knight Frank.