Mumbai: Stress fund soon to kick start slum rehab projects

In a bid to give a much needed boost to slum rehabilitation projects in Mumbai, the Maharashtra Government, along with the State Bank of India, will set up a stress fund in which the government will contribute Rs 700 crore to Rs 1000 crore, while a major chunk will come from the SBI.

Housing Minister Jitendra Awhad said Chief Minister Uddhav Thackeray on Wednesday gave in-principle approval when the proposal came up before the state cabinet.

The stress fund will be set up on the lines of a Rs 25,000 crore Alternative Investment Fund proposed by the Centre to provide priority debt financing for the completion of stalled housing projects that are in the affordable and middle-income housing sector.

He informed that that the fund will be set up under the Shivshahi Punarvasan Prakalpa Ltd but the SBI will work out the details with regard to the collateral to be given by the developers. The SBI will ultimately distribute the money to the developers. The Minister declined to divulge details with regard to the SBI’s contribution in the proposed stress fund.

''The stress fund will be used for the completion of stuck projects of Slum Rehabilitation Authority. The proposal will be prepared soon for seeking cabinet approval at the next meeting,’’ said Awhad at the web interaction.

Of the total 1,856 slum rehabilitation projects, which were granted letter of intent for the construction of 5,07,444 housing units, so far 2,09,815 units have been delivered. The construction of 3,97,411 housing units is yet to be completed as they were stuck because of procedural and financial issues. (The FPJ broke stories earlier with regard to Awhad seeking involvement of the SBI and other banks to finance the ailing realty sector in the city.)

BrihanMumbai Developers Association VP Harrish Kumar Jain said the much needed liquidity will be available to the developers with the government’s move to set up a stress fund.

This apart, Awhad also announced series of relaxations in its slum redevelopment policy to ensure faster availability of housing for slum dwellers in Mumbai Metropolitan Region (MMR). Various premiums related to slum redevelopment projects have been relaxed by way of reductions and deferred payments. Along with the premium relaxations the approvals timeline has been drastically reduced at all stages by SRA.

Stating that the relaxation in various SRA premiums and reduction in approval timeline are targeted to achieve a slum-free Mumbai at the earliest, he added that the new premium structure would also ensure clubbing of SRA projects in city zones which were stalled owing to non-feasibility factor.

He further stated that the revised timeline of the approvals structure at various stages, including LOI, would result in more than 50% reduction in timeline compared to the previous timeline practiced by SRA.

National Real Estate Development Council President Niranjan Hiranandani said, ‘’ I welcome the revamp of the slum rehabilitation scheme which will help more projects to come to fruition. Also welcome the steps to facilitate the ease of doing business,’’

Along with the relaxation in premiums and timeline, all SRA projects would be empowered with health centres; there would be an authorized committee to relocate religious structures within the project; there will also be scope for online approval mechanism and committed continuity in construction of rehabilitation buildings which can only be stopped by specific high court orders.

Further, the SRA has capped the rental amount structure during the rehabilitation phase to Rs 1.2 lakh and Rs 96,000 per annum in the city and suburbs, respectively.