Mumbai builders grab Rs 2,500 crore FSI in redevelopment plots

FPJ BureauUpdated: Thursday, May 30, 2019, 04:39 AM IST
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Housing scam Developers have been getting away by paying a measly fine instead of handing over flats to govt

Mumbai : The builder lobby has grabbed more than 1.50 lakh metres of Floor Space Index (FSI) over the last five years by misusing various re-development schemes. Documents in possession of Free Press Journal clearly show that additional FSI that was given to developers where re-development permission was given was sold to buyers at the market rate. A part of that should have been lawfully handed over to the government.

Senior official from the state government’s housing department claimed that if the rate of FSI was Rs 15,000 per square feet, the scam is worth Rs 2,500 crore.  Minister of State for Housing Ravindra Waykar said that he agreed that there was a nexus between builders and officials of Mumbai Housing and Development Authority (Mhada).

Mhada is the sole nodal agency entrusted with the task of re-developing the land on which stands dilapidated buildings and chawls under the Development Control Rules 33(5), 33(7) and 33(9). The developer who wins the bid has to first construct flats that is to be handed over to the original tenants. The developer can construct buildings on the rest of the land in the 1:2 ratio. Which means for every 1,000 metres, he is allowed to build 2,000 square metre. Now, here is the catch: some flats (in the agreed FSI) have to be handed over to Mhada, which builders have not been doing and getting away by paying a measly fine.

“In the last five years, nearly 16 lakh square metres of FSI involving 456 projects were to be handed over to Mhada. But as of July 20, 2017, only 42,283 square metres have been surrendered to Mhada by the builders. This would work out to nearly Rs 2,500 crore,” said a Mhada official.

Minister Ravindra Waykar expressed concern over the misuse of FSI by builders. “It seems the builders have sold flats that are legitimately the property of Mhada in the open market and have earned huge profits,” he told Fress Press Journal, adding, “When there is no provision to accept fines against the FSI which has not be surrendered to Mhada, officials have taken them.”

Waykar said that the scam involves paying fines by not handing over FAS. “When I wanted to probe the matter by a Special Investigation Team (SIT), then Mhada CEO Sambhaji Zende disagreed with me and it was dropped.”

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