Personal Finance

CRZ rules set to change Mumbai shoreline

S. Shanker | Updated on February 05, 2011 Published on February 05, 2011

The Ministry of Environment and Forests accorded Mumbai a special status in the Coastal Regulation Zone notification in January.

Will this bring about the changes that the Ministry hopes for in redeveloping the city shoreline awaits to be seen, given the scale rules and norms are flouted here.

Under CRZ-2011 norms, the no-development zone has been reduced to 100 metres from 200 metres. In areas such as Mumbai, Goa and Kerala, construction of roads and repair or reconstruction of old buildings will be allowed. The development will be carried out as per the Town Planning Act and state coastal zone management authorities will be required to develop coastal zone management plan for these areas.

The CRZ relaxation is expected to aid 146 slum dwelling clusters accommodating 2.5 lakh people and 620 dilapidated and cessed building accommodating 38,000 families to redevelop their structures. It will also facilitate cluster development of 38 koliwadas (fishermen hamlets).

The MoEF has in many ways offered largesse in terms of access to prime land that had hitherto been away from developers' reach more because of the floor space index of 1.33 as well as the rules and clearances that had to be complied with.

The Ministry has also put in a few riders to ensure that none can walk away without scrutiny and fair assessment while gaining an incentive 2.5 FSI.

New norms

The new norms mandate that the State government should be a majority stake holder in redevelopment (51 per cent) and that the development is open to the Right to Information Act and subject to Comptroller and Auditor General's assessment.

The dexterity of the Mumbai developers had not missed the Ministry's eyes. In fact, Mr Jairam Ramesh subtly pointed out to the “creativity” of builders in evicting the original tenants, while stating that the notification emphasised on development by government agencies to maintain transparency.What is important is that environment mapping needs to be done by the State to ensure that the demarcations are in place for development, which could take well over six months. Policy changes also need to be incorporated in the State's development plan.

Developers said the MoEF move would open up about 200 sq km along the city shoreline, which could be nearly half the city area. The negative part to this would be that if ways and means are devised to override the curbs and exploitation takes place, then the Mumbai shoreline would be in a shambles, with a multitude of skyscrapers reaching out to the skies.

SCOPE FOR MISUSE

Mr Ramesh Nair, Managing Director-West India, Jones Lang LaSalle India, said there would be significant changes in the redevelopment of the Mumbai seafront.

However, there is a lot of scope for misuse of the revised norms. If guidelines are followed, close to one lakh affordable housing units could come about. However, as of now, it is still unclear how much land will be liberated for development.

In theory, it should amount to about 100 hectares, but there is still no clarity on how much of this will remain as no-development zones under the CRZ-1 classification, and how much under CRZ II and III. Only when there is clarity on this, can actual development begin. Development would probably start earlier in Malabar Hill, Andheri, Worli and Bandra, he said.

Mr Nair ruled out any significant correction in prices.

Many developers said they do not see any drop in prices on CRZ-2011 norms relaxation count.

Mr Manoj Asrani of Soham World, a leading developer in Navi Mumbai, said there is no scope of price being affected. Prices will sustain because redevelopment always take time — right from commencement stage to completion because of many factors such as convincing tenants and owners, besides obtaining consent for cluster development.

FAVOURABLE, BUT UNCLEAR

A Kotak client report said it all goes well, it could benefit both buyers and developers though projects could take five-seven years for completion.

“A case can be made for a win-win scenario for both— developers and property buyers. Buyers could benefit from lower residential property prices due to increased supply (led by higher FSI available); while developers could benefit on greater volumes and an internal rate of return (IRR) similar to current redevelopment projects,” the report said.

Mr Anand Gupta of the Builders' Association of India said the notification was favourable though unclear on slum development.

It also lacked clarity on the 51 per cent partnership of the Government — whether it applied to the total slum area or the total saleable area or on profit generated from development.

Mr Gupta said there was ambiguity on areas marked ‘no-development zone,' which were for public utility such as garden, hospital, school and children's park.

If the Government insisted on non-development of slums that were on public utility area, then slum rehabilitation would be a non-starter.

Further, the MoEF had failed to fix a time-limit for making use of the incentive FSI. To ensure success of the notification, a specific time-limit was required, he said.

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