Before slums, SSPP develops its own office

Promoters of SSPP, however, feel a well appointed office will help raise the thousands of crores required for the slum redevelopment scheme’s implementation. Justifying the expenditure on the new office, Housing Minister Suresh Dada Jain said, “Everything that needs to be done will be done.” Theproposed company’s managing director G S Gill too was convinced that the new office would lend the outfit the right feel. He said they were striving for an “efficient and professional” look “conducive to doing business with high-profile construction and finance companies.” The office designed to accommodate a staff of 50 would be fully computerised and would have an “open” look with all-glass partitions.

But for MHADA officials, who are not convinced about the slum development scheme’s viability, it’s waste of money, their money.

Just like MHADA, construction industry experts too are not sure if SSPP’s gung-ho approach would bring in the buyers in a market that has been in recession for close to three years now. They maintain that even if the project were to take off, with private builders functioning only as contractors, sale of flats in the free market (the free sale component made available through extra FSI) would be a problem. For one, they feel the flats would be too expensive for the lowerincome group (LIG) and medium income group (MIG) buyers that the government is targeting.

This is how, they calculate, the cost will escalate: the Slum Redevelopment Authority (SRA) will charge the SSPP for the extra Floor Space Index (FSI) at a rate of Rs 840 per square meter. Add to this the establishment costs, architect’s fees, labour fees and the off-site and on-site infrastructural expenses and the cost of constructing one free house works out to be around Rs 1,200 per square feet. This means the free sale flats will have to be sold at a minimum of Rs 2,400 per square feet – a price way too high for a middle-income buyer. And if that’s future, there are problems in the present too.

Sources said the Housing Development Finance Corporation (HDFC) is already doing a re-think on its decision to extend a loan of Rs 2,500 crore to SSPP. Also, there are rumours that Raj Purohit, state minister for housing, has refused to sign on the consent form for his appointment as the vice-chairman of the SSPP company.Jain, however, denied knowledge of either of the developments. Regarding HDFC’s stand, he said that he has “100 per cent faith” that HDFC would support SSPP. He added that the government had yet not applied for a loan from HDFC. “We will at an appropriate time.”