Projects caught in red-tapism for years, builders driven to bankruptcy and despair
For all the talk about boom in Mumbai's premium real estate market, a mere four big-budget projects have seen the light of the day in the island city during the past 10 years.
While Lodha's Bellissimo at Mahalaxmi, K Raheja's Vivarea at Jacob Circle, Planet Godrej at Mahalaxmi and Imperial Towers at Tardeo are the lucky four to be completed, dozens of other premium projects (costing Rs 40,000 or above per sqare foot) are stuck in varying stages of completion for years, some for almost a decade. "This is the truth of Mumbai's so-called premium real estate market," says Pankaj Kapoor, managing director of Liases Foras, a realty research consultancy, adding if this is the outcome of an era termed as a 'boom period' by the industry, one can only imagine the outcome in case of a slowdown.
At the root of this rundown condition of Mumbai's prime real estate market is bureaucratic red-tapism and political opportunism. It's not only about getting to wet their beak, but the sheer disregard for the high stakes involved that is hitting the developer fraternity hard. "While the suicide of a Thane builder made big news, little has changed at the ground level. Just last week, a builder who was waiting for a clearance from the heritage committee for a redevelopment project near CST suffered a heart-attack due to the stress. The politicians and officials are just interested in milking the developers and then leaving them in the cold if the project runs into any technical or legal hurdle," said an industry observer, who requested not to be named.
A classic example of the bureaucratic apathy is the 1,400-apartment One Avighna Park project in Lower Parel, touted as Mumbai's first cluster development project and mired in delay for years. "Between 2008 and 2010, we secured all the approvals, including clearances from the civil aviation ministry, the high-rise committee and the environmental ministry. Today, after completing the rehabilitation of all the dishoused, a majority of whom are ironically civic employees, we are running from pillar to post for the past three years to get the final nod to complete the flagship 64-storey tower," said Kailash Agarwal, chairman of Avighna India, adding for all the talk about fast-tracking real estate projects, nobody actually wants to take a stand.
After a change of FSI rules in 2012 and a change of guard at BMC, the new civic chief disregarded the recommendations of his own team and shunted a straightforward issuance of FSI for the final phase to the state government's urban development (UD) department for guidance. "Despite water-tight documentation and favourable opinion of legal luminaries, our file is shuttling between BMC and UD for the past three years, even as we incur losses running into crores of rupees with each passing month," said Agarwal, adding if developers are made to run from pillar to post endlessly, either their life will be shortened or they will go bankrupt.
With dozens of major projects facing a similar fate in the heart of Mumbai, the need of the hour is not only to talk about concepts like fast-track development and single-window clearance, but to walk the talk and clear the hurdles being faced by the developers. "Delayed approvals and cost overruns will not only kill the city's real estate sector but severely hamper the economy of the city, and the state, and eventually lead to the downfall of the very government that is guilty of creating the mess. History is witness to this," said the industry observer.
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