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Revised draft DP: Windfall likely for builders who exceeded FSI limits

Move to allow extra areas without payment of premium, could hit civic revenue

Written by Sandeep Ashar | Mumbai | Updated: May 27, 2016 1:39:58 am
mumbai 75 Sources confirmed that influential developers had lobbied hard with the government and city officials for the exemption.

Mumbai’s revised draft Development Plan brings a bonanza for developers building luxury skyscrapers with areas such as flower beds, terraces, balconies and parking decks in excess of what is permitted.

The DP allows these developers to build such extra areas without payment of a premium. While a premium at 60 per cent of the government determined market values would be payable for areas covering lifts, lobbies, and staircases, the rest of the extra areas are now offered free.

While luxury residential towers coming up in upscale areas such as Worli, Lower Parel, Breach Candy, Currey Road and Nepeansea Road — where property rates are among the country’s highest — will benefit from the dole, it will lead to a potential loss in revenue worth several crores to the civic exchequer.

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Sources confirmed that influential developers had lobbied hard with the government and city officials for the exemption. They contended that the initial building permissions for building such extra areas had been sanctioned for these projects before the civic body adopted the premium payment rule for such areas on January 6, 2012.

On that day, then Chief Minister Prithviraj Chavan had approved the BMC’s proposal to charge a hefty premiums from builders who build extra areas over the permissible floor space index (FSI), which is a measure for the extent of construction that can be allowed on a plot.

The developers who had already received IODs prior to January 6, 2012 were exempted from premium payments for the sanctioned portions of the building. But the government had then reasoned that even such building projects will come under the premium regime when they seek permissions for higher floors. Since most of these luxury projects had already undertaken construction, they objected to this rider.

Previously, the UDD headed by CM Devendra Fadnavis had courted criticism last May when it had modified the rule and agreed to exempt premium payments for such extra areas. Ironically, civic chief Ajoy Mehta had opposed the modification, with civic town planners citing the possibility of “loss of revenue to the civic exchequer” and a “possibility of misuse of the extra areas.”

The state department beat a retreat following a backlash and issued a clarification stating that “the civic chief would hold a discretion to charge full premium for such extra areas.” But with no changes introduced to the modified rule, the civic body had kept its implementation in abeyance.

But a year later, it has itself incorporated the state’s original modification in the revised development plan. The opinion on the contentious move, however, continues to be divided in civic corridors. A senior official confirmed that a section of civic town planners have sought dropping of the provision from the draft, arguing the civic administration could face flak over it.

Major projects that will benefit are Avighna Park, a luxury residential project near Curry Road in Central Mumbai, and Palais Royale in Worli, once touted as the country’s tallest residential building. Sesen, another high-end project on Nepeansea Road, and some projects of the DB Realty group in Central Mumbai could also benefit. Senior civic officials said that another possible beneficiary could be the highrise being built by the Singhanias on Kemp’s Corner. The possibility of eligible builders who had paid premiums for such areas seeking refund has also been cited.

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