Before slums, SSPP develops its own office

MUMBAI, August 10: The proposed Shivshahi Punarvasan Prakalp SSPP company is sprucing up its office located on the fifth floor of the M...

MUMBAI, August 10: The proposed Shivshahi Punarvasan Prakalp SSPP company is sprucing up its office located on the fifth floor of the MHADA building in Bandra at a cost of about Rs 1 crore, much to the chagrin of MHADA officials who have contributed Rs 300 crore towards the company8217;s seed money and are not too sure of the returns.

As work on the interiors 8211; new windows, plush upholstery, drapes and air-conditioning 8211; progresses to meet the deadline set for the last week of August, when the office would be inaugurated, MHADA officials say the company could do well without its profligacy. They also point out that the modern SSPP office would stand out against the drab interiors of the rest of the MHADA building.

Promoters of SSPP, however, feel a well appointed office will help raise the thousands of crores required for the slum redevelopment scheme8217;s implementation. Justifying the expenditure on the new office, Housing Minister Suresh Dada Jain said, 8220;Everything that needs to be done will be done.8221; Theproposed company8217;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 8220;efficient and professional8221; look 8220;conducive to doing business with high-profile construction and finance companies.8221; The office designed to accommodate a staff of 50 would be fully computerised and would have an 8220;open8221; look with all-glass partitions.

But for MHADA officials, who are not convinced about the slum development scheme8217;s viability, it8217;s waste of money, their money.

Just like MHADA, construction industry experts too are not sure if SSPP8217;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, architect8217;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 8211; a price way too high for a middle-income buyer. And if that8217;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 HDFC8217;s stand, he said that he has 8220;100 per cent faith8221; that HDFC would support SSPP. He added that the government had yet not applied for a loan from HDFC. 8220;We will at an appropriate time.8221;