REDEVELOPMENT: THE FUTURE OF MUMBAI'S REALTY SKYLINE

In a city where land available for construction is becoming lesser with each passing day and old buildings are crumbling under the weight of age and neglect, redeveloping old buildings is the only way ahead, writes VIBHA SINGH

    Five years ago, the redevelopment of Mumbai was on the priority list of government policies. After all, cities remain vibrant if people inhabiting them are enthusiastic about living in those cities. You cannot expect people to exude zest when most buildings in the city are crumbling. The other problem the city faces is that there is no fresh land for development. Hence, the state government is now focused on redeveloping the existing old buildings. However, for one reason or the other, this has not been happening despite the initial euphoria five years ago. Sunil Mantri, president, National Real Estate Development Council (NAREDCO), explains that "The city of Mumbai, as we know, is centuries old. As a result of its sporadic growth and its rich culture and history, it has developed in an adhoc manner with no concrete town planning. It has pockets of affluent residences standing back-to-back, with large tracts of mass dwelling units or slums. There are also numerous dilapidated buildings that pose a risk to the lives of  its residents. So, while Mumbai's skyline is a pretty picture, there is much that can be done to give Mumbai a face-lift." 
    In Mumbai, over two million people live in 19,672 dilapidated buildings in south Mumbai, with about 70 per cent residing in one-room tenements. Logically, these buildings should be slated for redevelopment without any delay. Amit Kulkarni, director, Varasiddhi Infrastructure, stressing on the need for redevelopment says that "Mumbai city expanded rapidly into the suburbs and beyond, post the 1960s and 1970s. The buildings that were constructed back then, are obviously in a dilapidated condition, most of which are cases fit for reconstruction or redevelopment. There is hardly any open land left in Mumbai where one can think of any green field project; the only option left is brown field or redevelopment of the property." 
    Of these available options, redevelopment of dilapidated buildings has the potential to unlock maximum land for infrastructure and real estate development. Hariprakash Pandey, vice-president, finance and investor relations at HDIL, explains how, "The city is long and less wide, with an extensive coastline. Unlike other cosmopolitan metros of the world, the major airports are located in the centre of Mumbai, causing massive congestion. There are mangroves on the eastern parts of the city, and due to environmental reasons, those plots have not been opened up for construction. Lack of an affordable housing policy has resulted in more occupation of government lands and build-up of slums on these lands. All these factors have limited the availability of potentially usable land and restricted developmental activities in the available land, due to more environmental and civic regulations." As there is a severe limitation in getting land for development, redevelopment is the only available option. 
    Redevelopment of dilapidated buildings, slums and old mills, are the only alternatives. Anuj Puri, chairman and country head, Jones Lang LaSalle India, explains that "Redevelopment, as a method of urban renewal, may involve relocating businesses and people. It must produce tangible economic benefits so that the trouble and expense of redevelopment is justified. If used correctly, redevelopment can be an economic engine that provides additional and better quality housing, helps in boosting property values, creates jobs, expands business opportunities, eliminates urban decay and improves infrastructure. Other potential benefits of redevelopment are reduced urban sprawl, improved economic competitiveness of a city's centre and better opportunities for safety and surveillance." 
    The other advantages of redevelopment of a slum or a dilapidated building are that it results in free, safe and high-quality housing with good sanitary facilities for the economically weaker sections. Redevelopment decongests the city and makes it look young and beautiful. During the last 23 years, there are only 1,600 chawls that have been redeveloped. There are about 5,00,000 more units that need to be redeveloped. At that pace, it will take close to 200 years to redevelop Mumbai. There are some issues involved in redevelopment, Mantri points out. "However, laws of the land make it difficult for any such action. Redevelopers have to provide the occupants with self-contained apartments of 300 sq ft each, and after that, recover the costs and generate margins through additional construction which can be a maximum of 50 per cent above the FSI awarded to the beneficiary occupants. This becomes very impractical at the current FSI levels, considering the expenses involved in rehabilitation. In addition, the law requires the developer to acquire the consent of least 70 per cent owners and tenants in order to undertake redevelopment. This is also a tall order and could take time. Meanwhile, the owners, tenants, are at risk as development proceeds at a snail's pace due to the current laws," he adds. 
    To ease the process, the Maharashtra government has announced some changes in the cluster redevelopment policy. Maharashtra chief minister, Prithviraj Chavan has announced the modified set of development control rules or DCR announced by the State Urban Development Authority for the Greater Mumbai region. The new rules now allow developers to pursue reconstruction/redevelopment of any building that has been around for more than 30 years. Also, consent from only 70 per cent of the landlords is now needed to begin a project, instead of the earlier 100 per cent, but parties that do not consent will have to be given adequate compensation. Kulkarni feels that the "Government has understood the importance of the matter and has proposed new schemes to take care of the redevelopment schemes across Mumbai, under different norms such as 33/7, 33/9, 33/5 and 33/10. In the next five to ten years, we will see a boom in the redevelopment sector." 
    Explaining the situation at hand, Mantri says, "If the policy environment is right, there are a number of developers catering to all economic strata of the residents of Mumbai, who are waiting in the wings to undertake redevelopment. However, in order to get it right this time, the recommendations of all stakeholders must be taken into account so that the policy that emerges is optimal and maximises benefits for all concerned and the city of Mumbai at large." 
    Puri does put in a word of caution though. "Redevelopment sometimes involves the use of eminent domain as a legal instrument to take private property for city-initiated development projects. This is sometimes seen as a means for regulatory bodies to acquire control on behalf of influential developers or developer cartels. If carried out in a non-consultative manner, redevelopment can result in an excess of high rises that compromise existing infrastructure, reduce the possibility of new infrastructure and increase the crime rate in a location. In order to be genuinely democratic, the process of redevelopment must be consultative at all levels. It should enable local citizens to have greater control and ownership of the direction of their community." Community participation, sustainability and trust, are important watchwords. The government must act as an advocate and an 'enabler', rather than as an agency that enforces command and control. 
    Finally, redevelopment should not be only about improving existing structure. There should also be a focus on incorporating historic structures into new and rehabilitated development. In cities like Mumbai, it is important to preserve and enhance cultural, historical and community assets. The cultural fabric of the community must not be compromised.

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IF USED CORRECTLY, REDEVELOPMENT CAN BE AN ECONOMIC ENGINE THAT PROVIDES ADDITIONAL AND BETTER QUALITY HOUSING, HELPS IN BOOSTING PROPERTY VALUES, CREATES JOBS, EXPANDS BUSINESS OPPORTUNITIES, ELIMINATES URBAN DECAY AND IMPROVES INFRASTRUCTURE.

File FIR on 'gas price collusion' by ministers, RIL: Kejri to cops Mukesh Ambani, Moily, Deora Among Those Named

New Delhi: In a sudden move that has jolted the political and business establishments, the Arvind Kejriwal-led Delhi government on Tuesday directed its anti-corruption branch to file an FIR against oil minister Veerappa Moily, former oil minister Murli Deora, Reliance Industries Ltd boss Mukesh Ambani and the former director-general hydrocarbons V K Sibal under the Prevention of Corruption Act for hatching a “conspiracy” to double gas prices in order to benefit, in the main, RIL.      In a brief press conference in the morning, the Delhi CM announced this while describing the details mentioned in a complaint received by the Delhi government as “shocking” and “an assault on India’s economic sovereignty which amounted to anti-national activity”. He demanded that the central government put price hike of gas in abeyance till the time the probe into the matter is completed.      “We have always said that price rise and inflation are linked to corruption and this is an example. In case this price increase is allowed to take place, it will make the life of the common man miserable,” Kejriwal said.      The Delhi government’s intervention in this matter, against which a PIL is still pending in Supreme Court, raised eyebrows with experts questioning the local government’s jurisdiction.  Kejri doesn’t know how it works: Moily      Oil minister Veerappa Moily hit back at allegations made by CM Kejriwal, saying pricing of petroleum products was done as per expert advice. “I should sympathize with his ignorance. He should know how the government functions.”P 12  Charges baseless, shocking: RIL      Terming the move to register an FIR as “shocking”, RIL denied the charges and said it would pursue legal remedies. “The complaint and allegations are completely baseless and devoid of any merit or substance,” it said. P 13 AAP trains guns on Modi-Adani links      AAP leader Yogendra Yadav attacked Narendra Modi. “What is the exact relationship between Modi and the Adani Group? How has Adani become super rich in just 10 years? Why are BJP, Modi silent on gas pricing scam by Congress?”P 10 Kejriwal: AAP has powers as ‘offence’ committed in Delhi      Kejriwal claimed as the “offence” had taken place in the jurisdiction of Delhi it was well within the Delhi government’s powers to proceed against it.      The decision to order a probe, said Kejriwal, was taken after it received a complaint filed by former cabinet secretary T S R Subramanian, former Navy chief R H Tahiliani, former expenditure secretary E A S Sarma and Supreme Court lawyer Kamini Jaiswal.      The complaint pointed out that gas prices would be doubled from April 1 due to the alleged “active collusion” between RIL and some central ministers. In case this price hike is allowed, it would have a cascading effect on transport, domestic gas and electricity prices, thus affecting the common man.      Kejriwal claimed the impact of the hike would cost the country a minimum of Rs 54,500 crore every year, and in addition to this, he said, the central government had allowed RIL to make a future windfall profit of Rs 1.2 lakh crore by gold-plating its project.      In a press release, the Delhi government said that since the term of the UPA government was ending in four months, it should have left the decision to the next government and “this hurry shows a malafide intention of helping” RIL.      It claimed that the decision to hike the gas price from the existing $4.2 (Rs 262.25) per mmbtu (one million British Thermal Unit) to $8.4 (Rs 524.20) per mmbtu would make gas prices in India among the highest in the world. It also claimed that there was no attempt to determine the cost of production independently and accurately. There was also no explanation as to why when the entire domestic production is to be consumed internally, prices are being fixed in US dollars. The fluctuation in dollar rate will only lead to a further increase in gas prices.      Charging the UPA government with collusion with RIL, the statement said the Centre took no action against RIL for its deliberate drop in production and ignored the CAG report and the then solicitor general’s opinion (in May 2012), and on the contrary, accepted RIL's demand for doubling gas prices from April 1 this year.      The AAP government said that even if the Centre’s argument that new prices would bring in more investment in exploration were to be accepted, there was no justification for raising gas prices from existing fields. “The central government (particularly petroleum ministry) has connived with RIL to help it in making a windfall profit at the cost of common man,” it said. Kejriwal claimed that the cost of production of gas was less than $2.34 per mmbtu.      “The fact that RIL had signed long term agreements with NTPC and RNRL for supplying gas at that rate for 17 years would show it was making profits at that price. RIL’s partner NIKO has a 25 year contract with the Bangladesh government to supply gas at the rate of $ 2.34/ mmbtu,” he said.      “A letter from RIL to the director general hydrocarbons giving its cost calculations shows the cost of production is less than $1 per mmbtu. Then why did it seek a hike in gas prices and why did the central government agree to it?” he asked.