Cash strapped MHADA plans joint venture with PAL for HIG houses

MHADA is considering the proposal to develop the land situated at Lal Bahadur Shastri Marg, Kurla and construct Middle and High Income Group (MIG & HIG) houses to sell in open market. For the purpose, the cash-strapped MHADA is supposed to pump in Rs 27 crore (about half of the price of land) while the PAL’s contribution will be only its land valued at Rs 55.65 crore. However, the profit sharing ratio of the joint venture will be 51 per cent to PAL and rest 49 per cent to the MHADA.

The proposal was first put before the board of the directors in their meeting on April 24, 2000 but no decision was taken on it. It was deferred till the further meeting and is likely to be discussed in the board’s meeting to be held on September 15.

However, the proposal is likely to run into rough weather with strong opposition from several quarters inside the MHADA and the housing department. Minister of State for Housing Nawab Malik, has strongly objected to it and questioned MHADA’s logic behind investing money in HIG houses to be constructed on a private land. Significantly, several high income group tenements constructed by MHADA at Powai and Oshiwara are lying unsold. MHADA is unable to undertake mass housing schemes for low income groups due to want of land and funds.

Sources said a top official of MHADA was keen on getting the proposal approved. Earlier, the same proposal was before the Shiv Shahi Punarvasan Prakalp, a company floated by government for slum rehabilitation scheme during the Sena-BJP alliance regime. Interstingly, the official was in the SPPL at that time.

When contacted, MHADA Chairman Madhu Chavan admitted that the proposal was before the board of directors. "It had been brought before us in the April meeting but we could not take decision on it,"he said.

"We are yet to take a decision on it,"he replied when asked if MHADA was keen on approving it.

As per the proposal before the board, the administration has suggested that the HIG flats at Kurla can be sold at the rate of Rs 1800 per square feet while the construction cost will be around Rs 1100 square feet.

The proposal has two options– direct purchase of land from the PAL at Rs 55 crore under section 52 of the MHADA Act or entering into a joint venture with the PAL to develop the plot. The administration has recommended the second option.