The Maharashtra State Government plans to auction clusters of land to the best bidder for redevelopment. CW looks into the highs and lows of this… The cluster redevelopment policy has, since its launch in 2009, undergone a series of amendments. Earlier this month, Chief Minister Prithviraj Chavan put it on hold; recently, he proposed radical changes to it. As per his plan, instead of developers approaching residents for their consent, the government will now invite bids from developers for each cluster to be redeveloped. And, whichever builder offers better options for residents (and a greater premium to the government) can get the rights to develop that cluster. Supposedly, the change is aimed at rooting out two key problems in the existing policy – irregularities by builders and delays in project implementation. While residents will not be able to choose their developers under the proposed norms, they will not be defrauded since builders will be answerable to the government. How it all began By itself, cluster redevelopment takes into account critical urban planning parameters and environmental features. Thus, larger dwellings can be created or projects that were previously unviable can be rehabilitated, resulting in a better-planned neighbourhood. The pilot cluster redevelopment project was first proposed in 2005 by the Remaking of Mumbai Federation in lieu of the 26/7 floods in Mumbai that resulted in the collapse of dilapidated buildings. The state government passed the original DCR 33(9) Cluster Redevelopment Act in 2008, which was followed by a deluge of proposals… Stopped in the tracks Of the three approved proposals, one took off – Avighna One at Lower Parel by Nish Developers. For the rest, the authorities started delaying approvals and kept development policies like parking FSI on hold. Even for approved projects, there were no fixed deadlines for project completion. Not surprisingly, builders discontinued construction work till the government approvals were in place. Meanwhile, following allegations against a former CM, of favouritism and disregard for objections raised by the urban development department, Chavan announced changes in the original policy. This would also help generate revenue for the government. Just as the Centre got considerable revenue by auctioning 3G spectrum, which is a public resource, land in Mumbai is also a public resource, and hence, part of the profits coming from its development should be submitted to public funds; Chavan is reported to have said. Originally, the government was entitled to Rs 5,000 per sq m, with MHADA getting 5 per cent of the total built up area free of cost. Now, post the CM's announcement, the status of projects that were approved or had taken off remains unclear. However, Kailash Agarwal, Chairman, Nish Developers, says, “We are continuing with Avighna One as planned. An auctioning policy is only possible where government land is being auctioned. Moreover, the city is made up of very small parcels of land with fragmented ownership and numerous tenancy issues, which realistically make auctioning completely unviable.” Mayank Gandhi, Secretary, Remaking of Mumbai Federation, asserts, “Earlier, 33(9) was sensible. The government was just a facilitator to ensure that redevelopment could take place in a certain manner. For this, MHADA would get free housing, and the government would get some revenue for infrastructure development, which made sense. However, auctioning clustered land that does not belong to you is a non starter, irrespective of the advantages that it may have. We hope to talk to the government soon.” So while the amendment awaits actual implementation, it remains to be seen whether the changes will actually benefit the residents of these clusters or end up as a tug of war between the government and the builder fraternity (with money as the bone of contention, of course!). What makes a cluster eligible for redevelopment? Area of the cluster should amount to 4,000-20,000 sq m for buildings erected before Sep 30, 1969, while buildings under government, semi-government or MHADA jurisdiction must have a minimum area of 2,000 sq m. An incentive of FSI of up to four has been given for the redevelopment of cessed buildings. Religious places will get special incentives of an additional FSI of up to 2.5. Tenants will also get bigger houses of 300 sq ft each and ownership of those flats. In projects carried out in a JV between the government and private developers, the area (rehabilitated and incentive area) will be shared between the two players in 1:0.5, favouring the government.