Maharashtra announces Rs 1,000-crore stress fund for slum rehabilitation projects

[ecis2016.org] The Maharashtra government has decided to set up a stress fund meant specifically for stuck slum rehabilitation projects, where it will contribute nearly Rs 700-1,000 crores from its Shivshahi Purnarvasan Prakalp Ltd

Amid shanties in India’s financial capital turning into breeding grounds for the Coronavirus, the Maharashtra government, on June 9, 2020, announced a series of measures, including the setting up of a stress fund and payment deferments, to boost its slum redevelopment policy.

You are reading: Maharashtra announces Rs 1,000-crore stress fund for slum rehabilitation projects

These measures, announced through a video-conference by state housing minister Jitendra Awhad, are likely to ‘ensure faster availability of housing for slum dwellers in Mumbai and the Mumbai Metropolitan Region (MMR)’. “The state’s decision to push SRA development, is also keeping in view the city’s readiness to tackle any future pandemics such as the COVID-19. As we continue to battle the COVID-19 virus, Mumbai has witnessed an alarming ratio of COVID-19 cases across the slums and a proper housing environment will be the key to safeguard lives and prevent any community spread of such diseases, going forward,” said Awhad.

The SRA stress fund

For the stress fund, meant specifically for stuck slum redevelopment projects, the state plans to raise Rs 700-1,000 crores from its Shivshahi Purnarvasan Prakalp Ltd, a wholly-owned state government entity. Public lender State Bank of India, which would also help the state raise more money for the stress fund, will be responsible for managing it.

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Fast-tracking of slum redevelopment projects

In a move to offer further ease of doing business for slum redevelopment projects, the state has decided to issue intimation of approval within a week of the submission of letter of intent (LoI). Also, unlike earlier, builders undertaking such projects will not have to take on board 51% of the slum dwellers, before the submission of the LoI.

In a move that would significantly reduce the time taken to process files, these will be scrutinised at three levels, as against six levels previously.

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Among other time-saving moves, a centralised agency at the Slum Rehabilitation Authority (SRA), will issue the eligibility criteria (Annexure II) for tenants. Earlier, the task was jointly undertaken by the SRA, the Brihanmumbai Municipal Corporation (BMC) and the collector’s office. Also, barring the judiciary, such projects will not be stayed by any agency.

The government will also help the builders with clearing the site for the projects, in case of lack of cooperation from the slum dwellers. “In cases where slum dwellers are not cooperating, the SRA will ensure that they vacate the land under development, once the developer has cleared 70% of shanties,” said Awhad.

Payment deferral for maintenance deposit

Unlike before, builders will not be asked to provide 50% of the maintenance deposit, at the time the project receives the completion certificate. They can now make the entire payment when the project receives the occupancy certificate. The maintenance deposit is calculated at a base price of Rs 40,000 per tenant.

Unified rent structure

The SRA has also capped the rental amount structure, during the rehabilitation phase, to Rs 1.2 lakhs and Rs 96,000 per annum, in the city and suburbs, respectively. In Mumbai up to Bandra, the rent will be Rs 12,000 per month while it will be Rs 10,000 per month from Bandra to Andheri/Ghatkopar. For the remaining suburbs and areas falling within the MMR, the monthly rent has been kept at Rs 8,000.

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It is pertinent to recall here that since its launch in 1997, only two lakh tenements have been constructed under the Maharashtra slum redevelopment policy. With the relaxation in norms, the state now expects to build over 3.8 lakh tenements in two years.

Government may frame rules, take over pending SRA projects in Mumbai

– PTI

Expressing concern over unfinished slum redevelopment projects in Mumbai, the chief minister has said that the state is considering a regulation that will enable them to take over such projects and hand them over to other agencies, in a transparent manner

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December 2, 2016: The Maharashtra government is mulling the introduction of a regulation, to take over incomplete housing projects of SRA (Slum Rehabilitation Authority) and handing them over to other agencies through tenders. “After taking over such projects, they will be either handed over to Shivshahi Prakalp or allotted to other agencies, for development through tender,” chief minister Devendra Fadnavis said, while addressing a gathering in the city on December 1, 2016. Shivshahi Punarvasan Prakalp, a fully-owned company of the state government, looks after the planning and implementation of housing schemes under the SRA, including clearance and redevelopment of slums.

Raising concerns over the misuse of SRA by some builders, the CM said, “A lot of builders have taken LoI (letter of intent) from tenants for the redevelopment of slums and have displaced them. After dis-housing the tenants, in many cases, the builders have not been paying rent to the tenants for 4 to 5 years. In some cases, people have not been given the keys of their houses, in the last 10 years,” he said.

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“We are contemplating fixing a time limit, or to give the builders a benchmark of three, four or five years, to complete the project, he added. “If the builders fail to meet this deadline, their projects would be taken over by the government and handed over to the Shivshahi Prakalp or someone else, in a transparent manner or by tendering,” Fadnavis said.

In cases of redevelopment under the SRA, a developer secures the consent of the tenants, through the LoI.

“Trading of LoI hurts construction activity on the ground, as the builders keep changing for a certain housing project. However, in this case (taking over of SRA projects by the government), the new development agency would not need to get a fresh LoI from the gullible buyers,” he said.

The CM asserted that the government was committed to enhance the efficiency of services rendered to citizens. “63% of Mumbai’s land is non-buildable, while the rest is bearing the entire load. Therefore, we are working towards projects that are not only efficient but also sustainable,” he added.

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