Mumbai: The ShivShahi Punarvasan Prakalp Ltd (SPPL), a government controlled body formed to undertake slum rehabilitation, has signed a Memorandum of Understanding (MoU) with the State Bank of India (SBI) to provide start-up capital to those builders and developers who are undertaking slum rehabilitation projects in Mumbai. The idea is to remove the roadblock of capital and speed up the projects in the city, especially to create more affordable housing tenements for urban poor.
However, only those builder or developer whose slum rehabilitation projects have received Letter of Intent (LoI) and have sanctioned layout or plans clearly indicating areas earmarked for rehabilitation and sale components can avail the loan benefit from SPPL.
A senior SPPL official on request of confidentiality said that usually the builders or developers do not get loan easily for undertaking slum redevelopment projects. They face a lot of difficulty which eventually affect the project’s completion on deadline. “The move of signing an MoU by SPPL with SBI will act as a gateway for those who are in financial crises. The SPPL has deposited Rs 500 crore in the SBI bank.
The advantage of the MoU agreement is that it can provide loan to the needy at lower rate of interest. The bank can only provide loan at 9.45 to 12.45 percent of rate of interest which is much higher as compared to the current market demand. The rehabilitation component rate of interest provided by SPPL is less than the sale component,” said the official.
As per the information received from sources, so far three builders have approached the SPPL to avail the start-up capital benefit. Moreover, the slum rehabilitation body is also planning to sign similar MoUs with other banks to encourage slum redevelopment projects in the city. The start-up capital due preference will be given to those who have ‘in-situ’ slum rehabilitation schemes as per the signed agreement.
In addition, slum rehabilitation with at least 75 per cent of slum clearance in contiguous land parcels and where the builders or developers make a commitment to complete remaining 25 per cent of slum clearance within next three months will be considered by SPPL, the signed MoU agreement criteria.