Maharashtra set to scrap ‘FSI for parking space’

In a move that is likely to have a serious impact on real estate prices in Mumbai, the state government is set to abandon its controversial extra ‘floor space index (FSI) for public parking’ policy.

The decision is learnt to have been taken last week; the formal notification is likely to be issued shortly.

The policy offered additional FSI for construction provided the developer used some of the space for public parking. The area for commercial exploitation thus created was allowed to up to 40% to 50% of the parking area created by the developer.

As many as 72 proposals were received by the state, of which 28 had been cleared for additional FSI.

However, it was later found that the policy was creating imbalance in areas like Lower Parel. As many as 22,000 parking lots were created on paper in the area though the number of car users is not so high.

Additional municipal commissioner Aseem Gupta refused to comment on the issue, saying he had not received any formal communication. “I can’t comment since I am yet to get any official document,” he said. A senior official from the office of the chief minister (CM), however, told DNA that he had seen remarks made to that effect by the CM, who holds the Urban Development (UD) portfolio.

The state government had appointed a special committee comprising civic officials, traffic police and traffic experts to scrutinise the proposals.

According to sources, the committee received 72 proposals, of which one was rejected by the committee, while 42 were sent to the UD department for final approval. As many as 29 proposals were still lying with the committee as it has sought more ocuments.

“The UD department has approved only 28 proposals out of 42. Now, 30 new proposals are pending with the traffic police. The traffic police has already rejected three proposals of Bombay Dyeing, Century Mills and Phoenix Mills at Lower Parel,” said the civic official from road department.

“We found most of the proposals to avail additional FSI came from the island city where the developers could fetch maximum price. Of the 72 proposals, only 20 to 25 were from the suburbs,” said a Mantralaya official.

“There are 20 government-approved parking plots in the island city. Six are from western suburbs, while only two are from eastern suburbs,” said an official. Ironically, however, most of the proposals, which will now not get an additional FSI are from suburbs.

Big ticket real estate companies may be affected by the decision, as their project valuations were entirely dependent on the concessions granted under the policy. International property consultants say that if the policy is scrapped, then the land acquisition prices would drive the developers to hike prices.

Abhishek Lodha, MD, Lodha Group, said he could not comment as he had not seen the notification. Hari Prakash Pandey, VP-finance, HDIL, claimed their projects were unaffected since they hadn’t submitted any such proposal.

A source from DLF said they have received the approval in 2009, and hence it did not affect them. A senior consultant said that all the developers in the central Mumbai area had already availed of the policy.

Vipul Bansal, CEO, Indiabulls Real Estate Ltd, said, “The scrapping off of ‘FSI for parking’ doesn’t affect us as we did not consider it for this [Bharat Mill] project.”