The Trade-Off

01 Jul 2010 CW Staff

Developers in Mumbai rejoice as they are granted 25 per cent additional FSI in exchange for road development. But not everybody’s cheering.

The Maharashtra Government's Urban Development Department recently issued a notification granting 25 per cent more floor space index (FSI) to developers and builders in Mumbai in exchange for road development on the portion of land surrendered to the Brihanmumbai Municipal Corporation (BMC). This grant comes as an addition to the 100 per cent FSI benefit that most developers receive for submitting their land to the BMC.

For their part, builders are thrilled and are welcoming the new amendment with open arms. Interestingly, the change in the original policy comes soon after the Practicing Engineers, Architects and Town Planners Association (PEATA) approached the concerned authorities demanding a modification in the original policy. According to Anand Gupta, Honorary General Treasurer, Builders Association of India, "The new amendment is more than a welcome move. When a builder gives up his area to the corporation, he usually gets 100 per cent FSI without claiming any compensation. Now, if he develops the road, he gets 25 per cent more." In his view, leaving the responsibility of developing the roads to the BMC may delay the whole process as roads are absolutely essential infrastructure.

According to a source from the Urban Development Department who wishes to remain anonymous, "Following the amendment, Regulation 33 (1) of the Development Control Rules 1991 makes the property owner liable of being granted an additional FSI equal to 25 per cent of the area for his construction, if he develops a road on the surrendered land at his cost. The amendment, which is an additional provision to the existing rule, is however not applicable in cases where the road FSI has been utilised and the occupancy certificate granted. Moreover, the new rule saves the BMC the cost and responsibility of developing roads."

It goes without saying that an amendment like this is bound to attract a fair share of criticism too. Nitin Killawala, Architect and Member, Managing Committee, JVPD Association, is completely opposed to it. "It is a matter of common sense really that the cost of road construction is miniscule in comparison to FSI and therefore co-relating the two seems illogical to me," he argues. "The city is in dire need of better roads and this move is only suggestive of the BMC's lackadaisical approach towards road development." But Rajesh Vardhan, Managing Director, Vardhman Group, counters: "I don't think the system has any flaw whatsoever. Handing the onus of developing roads to the builders takes the load off the BMC's shoulders". Indeed, this seems like a clear case of the BMC washing its hands of all its responsibilities!

The new notification has gone down extremely well with the developer community. As a matter of fact, this new move could perhaps result in the builder passing on some of the benefits to the consumer through lowered costs. Let's wait and watch.

Fact File:

• The cost of constructing a concrete road is roughly about Rs. 4,000 per sq m while a tar road costs about Rs 2,500 per sq m. The costs are inclusive of all material and labour.
• As per the new notification passed by the Urban Development Department, a builder would need to spend roughly about Rs 1,000 / sq ft of FSI for a concrete road and Rs 650 / sq ft of FSI for a tar road.