BMC discards plan to give credit notes to contractors

The Brihanmumbai Municipal Corporation (BMC) has discarded its plan to give out credit notes instead of money to the contractors for constructing 12,000 housing units of Rs 9,000 crore for project-affected persons (PAPs). BMC will build only 4,000 housing units in Chandivali via cashless means for about Rs 2,500 crore. The 4,000 PAP units constructed through credit notes and Transfer of Development Rights (TDR) have been placed before the committee of the municipal corporation for approval. The developers can utilise the credit notes to pay municipal taxes and premiums to BMC or can also sell the credit notes to other developers. According to an official, the corporation has received applications for PAP units, and it will conduct a detailed analysis by verifying the agreement value in zones from the inspector general of the registration and stamps department and found out that the rates were feasible only for one zone in Chandivali. The credit notes value is Rs 1,584 crore, land TDR Rs 295 crore and construction TDR Rs 619 crore. Every PAP unit of 27.9 sq metres will cost BMC over Rs 60 lakh. BMC's total savings will be nearly Rs 178 crore, compared to the market rates. For the ongoing infrastructure projects, BMC needs 36,000 PAP units, said the official. In March, BMC decided to go cashless for a Rs 9,000 crore mega project for housing construction for PAPs. From the total amount, Rs 6,000 crore was paid via credit notes, while the remaining was TDR. According to the plan, landowners with reserved land for PAPs or housing can offer their land to BMC. The owners will also have to construct it for BMC. The corporation will house people affected through infrastructure projects such as roads, flyover and bridges construction, laying of drains, among others. The opposition party alleged that the plan would turn into a scam when developers start paying through credit notes when the corporation is facing the financial crunch. Image Source