Mumbai developers stare at Rs500 crore loss after Supreme Court's open space order

Sunday, 12 January 2014 - 6:52am IST | Place: Mumbai | Agency: DNA

City builders are staring at a huge cash loss. They have paid about Rs 500 crore by way of bribes to get their building plans cleared by BMC’s building proposals (BP) department. Following the recent Supreme Court order, they will now be required to resubmit the plans, which also means fresh demands by civic engineers to clear the amended documents.

As per the apex court’s order,  it is now binding on developers to keep six metres of passage around a proposed building and maintain 15 to 25% of open-to-sky space at ground level against the total size mentioned in a plan. The court had passed the order in the Kohinoor tower case of Shivaji Park. The ruling is aimed at easy manoeuvre of fire-fighting vehicles around buildings and recreational facility at the ground level.

A senior architect told dna on Saturday that on an average builders are required to pay nearly Rs1,000 to 1,500  per sq ft under the table to BP officials. “We spend almost Rs 1 crore to get clearance for the development of a plot measuring 500 sq metres.  Bigger the plot size, more the bribe.”

Following the SC judgment, civic commissioner Sitaram Kunte recently asked officials to return to builders files pertaining to nearly 500 projects.   “Assuming Rs 1 cr is spent on each project, a total of Rs 500 cr is at stake. We will now have to collectively pay an additional Rs 500 cr to have the amended plans cleared,”  he added.

Another senior architect said the unaccounted cash is called ‘speed money’, for swift movement of files.  “We have to shell out the money even when there are no irregularities. That is how the BMC functions,” a small builder from south Mumbai stated.

Shirish Sukhatme, president of Practising Engineers and Architects and Town Planners Association confirmed the prevalence of the practice. “We are hoping the officials will not ask us to grease their palms again. Otherwise, it will put a heavy burden on the developers.”

Anand Gupta, secretary of Builders Association of India does not agree fully with his fellow realtors. He said, “It all depends on the equation that a builder has with the engineers. Most officials behave like professionals once the bribe is paid to them.”

He added, “If these engineers stop taking  bribes, property prices will drop by Rs 1,000 to Rs 1,500 per sq ft.”

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