New ordinance on land acquisition rattles Navi Mumbai airport PAPs

Project-affected-persons (PAPs) of Navi Mumbai international airport project are under apprehension after the Central Government approved an ordinance to amend the Land Acquisition Act, 2013, on Monday. The amendment will ease the ‘consent clause’, which has so far posed hurdles during the land acquisition of several mega infrastructure projects across the country.

Land acquisition has been the major factor for the delay in Navi Mumbai international airport, which resulted in the escalation of its cost for almost three times. However, the City and Industrial Development Corporation Ltd (Cidco) has shot down any plans of forceful land acquisition. “We have already acquired almost 90% land required for the airport. The acquisition of the remaining 10% land will also be done through the normal process,” said Dr Mohan Ninave, senior public relation officer of Cidco.

Dr Ninave added that the planning agency has been giving one of the best compensation packages in the state. So, there should not be any problem in acquiring the remaining land.

The amended land acquisition act, which included five new categories of projects, including projects under public-private-partnership (PPP) module, would not require prior consent from affected families. Such projects do not even need to carry out the Social Impact Assessment (SIM) of affected families.

Now, projects under PPP do not require consent of 70 percent to 80 percent of the landowners. However, the higher compensation will continue to strike balance between farmers’ (PAPs) rehabilitation and development. Several projects across the country have been stuck because of the slow pace of land acquisition. Even with one of the best package offered by Cidco, the land acquisition process met several hurdles including PAPs approaching the Bombay High Court.
However, the High Court dismissed the petition filed by farmers, seeking more clarity on the package offered.

According to the Cidco package, it has been offering 22.5% developed plots as compensation to those whose land has been acquired. The state government has offered 22.5% developed land with an average floor space index (FSI) of 2. The villagers would get FSI of 1.5 for 12.5% of developed land and 2.5% for the remaining 10% developed land.

-Amit Srivastava/dna

Govt relaxes FDI policy for real estate sector

Removes lock-in period, minimum land area requirement

The government on Wednesday eased foreign direct investment (FDI) norms for the construction development sector, which is expected to provide a substantial boost to the sector in terms of greater foreign capital inflows.

Notifying the decision taken by the Cabinet in November, the Department of Industrial Policy and Promotion (DIPP), the nodal agency for all FDI policy, said foreign developers would now be allowed to exit a project only after completion or after completing the basic trunk infrastructure such as roads, water supply, street lighting, drainage and sewage.

Earlier foreign developers were not allowed to take out the invested amount before three years from completion of minimum capitalisation. However, now the foreign firm can take its money out or transfer its stake to another non-resident company before completing the project on approval from the government.

“The relaxation of the lock-in period comes as a major relief for the industry. The new rules allow FDI in smaller projects, which is a big relief. Besides, by doing away with the lock-in period, the government has now made the norms much simpler,” said Akash Gupt, executive director at PwC. In a significant step, the government also allowed foreign investors to invest in completed project for "operation and management."

In other words, 100 per cent FDI under the automatic route can now come in projects that have been completed by way of townships, malls and shopping complexes, and business centres. This was not allowed earlier.

"The notification eases foreign investment rules in India's construction sector, which has been troubled by problems such as paucity of funds and regulatory bottlenecks, said Sachin Sandhir, global managing director, emerging business, and managing director, South Asia, RICS.

Projects in semi-urban and peripheral locations of Tier I cities or locations in Tier II and Tier III cities could also take off at this scale, as land prices in these regions and the total capital investment requirement were attractive, he said.

Besides, under the new policy, the DIPP has also reduced minimum area requirements. Unlike the previous policy, foreign real estate developers can now invest in construction development projects having a minimum floor area of 20,000 sq meter. Earlier the requirement was 50,000 sq meters of built-up area. Similarly, the capital requirement was decreased from $10 million to $5 million.

"This is an extremely positive step and virtually meets most of the demands made by the industry. Moreover, by permitting transfer of stakes between two non-resident companies the government has literally opened the floodgates for FDI in the real estate sector," said Punit Shah, co-head of tax at KPMG.

Between April 2000 and September 2014, the construction development sector received about $24 billion, constituting 10 per cent of the overall FDI into the country during the period. However, since 2012-13, FDI inflow into the sector has slowed drastically. In 2012-13, it fell to $1.3 billion from $3.1 billion the previous year. It again declined to $1.2 billion in 2013-14. During the first six months of this financial year, only $568 million has flowed into this sector.

Govt to revise real estate Bill: Naidu

New Delhi: Housing and Urban Development Minister Venkaiah Naidu said on Friday the revised Real Estate (Regulation and Development) Bill, due soon, was not aimed at over-regulation of the sector.

“Regulation in real estate is the need of the hour as certain incidents have impacted the image of the sector negatively but the Bill will not create any over-regulation,” the minister said. It will provide a necessary transparency and fair play in real estate transactions.

The real estate sector has been away from any sort of regulation till now. The United Progressive Alliance government had tabled the Real Estate Bill in the Rajya Sabha, which was later referred to a Standing Committee. In its original form, the Bill was strongly opposed by industry. The draft Bill has been revised various times since 2009, when it was first formulated. On Friday, the current government held consultations with stake holders for formulating revisions in the Bill.

"The price escalation of land and building materials has made houses increasingly unaffordable for the urban poor. Over and above, failure on the part of some unprofessional and unorganised developers in fulfilling commitments of delivery to the buyers in terms of time and quality has created mistrust among the developers and buyers," he said.

The rapid urbanization has created huge gaps in urban housing and there is a shortage of 18 million housing units in urban areas out of which 95% pertains to economic weaker section and low income groups.

The industry has been opposing the introduction of the Bill. They have raised concerns over strict penalties/punishment to be imposed on developer if they fail to comply with certain provisions. It also makes it mandatory for developers to launch projects only after acquiring all the statutory clearances from relevant authorities.

It has also proposed stricter penalties and even jail term for a maximum of three years for developers. It provides for a clear definition of the 'carpet area' and would prohibit private developers from selling houses or flats on the basis of ambiguous 'super area'.

Real Estate Bill likely to come up in Winter Session of Parliament

Gearing up to move the Real Estate (Regulation and Development) Bill, 2013 for consideration in Rajya Sabha in the forthcoming Winter Session, the Housing and Urban Poverty Alleviation Ministry has called a meeting of all concerned on September 19 to discuss the issue here.

"We have convened a meeting of all stakeholders to seek their views and suggestions on the Real Estate (Regulation and Development) Bill, 2013," said a senior ministry official.

The bill is crucial for paving way for construction of a large number of affordable houses and is slated to come up in the Rajya Sabha during the Winter Session of Parliament. Housing and Urban Poverty Alleviation Minister Venkaiah Naidu on Wednesday discussed various aspects of the bill with the officials of the ministry. The NDA government has promised houses for all by 2022.

Naidu emphasised that the bill, while seeking to promote housing activity, should aim at harmonising the concerns of consumers and real estate developers, rather than introducing strangulation in the name of regulation. The minister said the bill should promote transparency in disclosures by the developers with regard to all relevant information about real estate projects, through registration of projects with the proposed regulator.

Besides Naidu and ministry officials, representatives of the Ministries of Environment and Forests and Climate Change, Consumer Affairs, Civil Aviation and Culture would also attend the consultations on various related issues like protection of consumers' interests, single window system for approval of real estate projects, perspectives of developers on delays in approvals and corrective measures required.

Officials of Consumer Welfare Association, Federation of Apartment Owners Associations, Professional Associations like legal firms and management consultants, National Real Estate Development Council, and Council of Real Estate Developers Associations of India will also attend the meet.

After this stakeholder consultations, Naidu would have a round-table of concerned ministers before firming up the official amendments to be moved, if required. There is a suggestion from real estate sector to rename the Bill as Real Estate (Regulation and Promotion) Bill.

FSI 4 – bubble or real?

Adivashi has been reporting about the pathetic conditions of infrastructure in Navi Mumbai’s rural areas due to the reckless and unplanned construction and about those living dangerously in CIDCIO constructed 30-year-old buildings. Finally, there seems to be light at the end of the tunnel as the promises made by Guardian Minister Ganesh Naik and his family of elected representatives of getting an extra FSI for redevelopment of these buildings are set to materialize, albeit with a caveat.

First the good news is that the Prithviraj Chavan government – often accused of delaying decisions – has now cleared cluster development plan for Thane, including Navi Mumbai, with an FSI of 4 to regularize 30-year old buildings. The cluster needs to have a minimum land of 4,000 sq m. FSI (Floor Space Index) is the percentage of construction allowed on a piece of land by the municipal authorities.

Meanwhile, CIDCO also okayed an FSI of 3 for the redevelopment of buildings constructed by it. Prima facie, it may look fine, but it comes with a qualifier that half of the FSI will be given to the owners of flats. The remaining FSI of 1.5 is to be reserved for amenities and commercial sale by the corporation. This so-called concession by CIDCO comes in the backdrop of an NMMC proposal for an FSI of 2.5 so that a developer can build new flats free of cost for the residents and make his money from the free sale floor space index.

Now the bad news is that both the plans are in danger of hanging fire. The Opposition is hell bent on pricking holes into what they call as Naik’s bubble of cluster development since it is “designed to help him and his supporters mint money”. Their allegation is that Ganesh Naik and his family already wield control over civil contractors and developers and their fear is that other contractors may not get a chance. It is known that many of city’s corporators or their kin have interests in civil contracts or supplies. So the question that arises is: Are they fighting over social or business interests?

Even the CIDCO proposal of splitting the FSI of 3 is bound to meet with resistance as Naik himself said “some people told me they are moving the court”. On his part, the Minister promises that he will ensure that the FSI of 4 and cluster development will be an inclusive one and it will cover CIDCO constructed buildings as well. One major stumbling block for the plan is that the land in nodal areas is owned by CIDCO which has leased it out to residents. Will CIDCO allow freehold to residents? This is a multi-crore rupee question!

But Naik says he will showcase the benefits of cluster development with an FSI of 4 at his native Bonkode village which, like many other rural areas in the city, has expanded in all directions breaking down the infrastructure. Adivashi promises to keep an eagle’s eye on this.

Now, let us turn to the non-NMMC area of Navi Mumbai – the airport project site. The land mafia appears to be active, despite the official ban on any structures without explicit permission from the notified developer CIDCO. Hundreds of illegal structures are coming up in the 25 km radius – and slightly beyond – with unscrupulous developers showing the airport carrot to sell their properties. Earlier, the village panchayats and district authorities could permit development most of which was not exactly planned. These powers have since been frozen after the government appointed CIDCO for development of Navimumbai International Airport Notified Area  (NAINA). The issue here is that CIDCO is yet to come up with development rules and invite objections and suggestions and then send the draft for approval of the State government which is a time consuming process.

All those developing without any approval hope that their structures will too be regularized some day or the other! CIDCO has itself has served notices on over 300 such structures. A moot question that arises is that why is CIDCO allowing such structures to come up in the first place?

Apparently in a mighty hurry to escape the model code of conduct that will come into force anytime for the Lok Sabha poll, NMMC standing committee has cleared proposals for Rs 100 crore worth contracts, including road repairs. But what raises many an eyebrow is the fact that some roads which have been repaired just around the last monsoon are also being dug up and re-laid. For instance, the road between D Mart and the mosque at Kopar Khairane remains in a state of permanent repairs. Adivashi would like to point out to the elected representatives to find better ways to spend the tax payers’ money

Part 4 : Real Estate Consumer Education Initiative by Advik Realty

Part 3 : Real Estate Consumer Education Initiative by Advik Realty

Part 2 : Real Estate Consumer Education Initiative by Advik Realty

Real Estate Consumer Education Initiative by Advik Realty