MUMBAI: The state has done a U-turn on its decision to exempt builders from paying a big premium for constructing extra areas in their luxury towers. Last week, the urban development department wrote to municipal commissioner Ajoy Mehta stating that such builders be charged full premium (60% of the locality's ready reckoner rate) for building extra areas in their residential projects.
"We will now have to set up a fair, unbiased and transparent template so that there are no allegations of favouritism against us when we charge this premium on a project-to-project basis,'' Mehta told TOI.
The controversy pertained to builders who procured their basic construction permissions prior to January 6, 2012. On that day, a new law mandated charging 60% premium on builders who want to build 35% extra space. Earlier, these extra spaces were liberally sanctioned by municipal commissioners free of cost. When the new law kicked in, developers whose projects were caught between the old rule and the new one lobbied hard with the government to exempt them.
The new law exempted builders who commenced construction prior to January 6, 2012. But the rule said when these builders apply for further permissions to complete the building, they would be charged the full premium for that portion of the construction. Infuriated, builders began lobbying hard with the government to exempt them.
The May 21, 2015 UDD notification brought cheer to these builders because it made no mention of charging them the full premium. The opposition Congress lambasted the government for the largesse, but BJP shot back saying the proposal was first initiated last year by the then Prithviraj Chavan-led government.
The BMC too had opposed the government's move to exempt such builders. Besides losing revenue, the civic administration warned the state it would allow builders to misuse large areas which were arbitrarily sanctioned by successive municipal commissioners between 2005 and 2010.
Though the new law allows 35% extra construction, these towers were allowed to build over 50% to 60% extra areas, comprising flower beds, parking decks, balconies etc. The biggest project that will now come under BMC's scanner is One Avighna Park, a luxury residential project near Currey Road station in central Mumbai. Its developer Kailash Agarwal had opposed paying the premium on the grounds that his project had procured permissions prior to Jan. 6, 2012. The project comprises two towers of 64 floors each with "sky villas and sky mansions". The project has been stuck for the past couple of years because of this issue.
Another large project is an under-construction, high-end luxury skyscraper at Nepean Sea Road called Sesen, owned by Satellite Group, but now taken over by Pune-based builder Avinash Bhosale. The initial permissions were procured prior to the January 6, 2012 cut-off date, but the developer will now have to pay premium when it seeks sanction for further construction.
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