Builders fleeced civic body of`655 cr premium in 15 years | mumbai | Hindustan Times
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Builders fleeced civic body of`655 cr premium in 15 years

mumbai Updated: Jun 19, 2012 01:31 IST
Alok Deshpande

The builders who have redeveloped commercial and residential properties on land leased by the Brihanmumbai Municipal Corporation (BMC) have not paid Rs655 crore in premium to the civic body in the past 15 years.

It has come to light that private developers have pocketed the premium by exploiting loopholes in the system. These properties are mostly in south and south central Mumbai, and were leased out decades ago.

The civic administration is summoning the 44 defaulters, of which only 21 have responded.

The Development Control Rules (DCR) 1991, under rule 33(7) and 33(9), state that developers of such projects need to pay 10% of the premium to the civic body while the letter of intent (LoI) is issued. “The rest 90% has to be paid at the time of obtaining the occupation certificate (OC). A majority of developers did not bother to obtain the OC, and sold off the flats in redeveloped properties. The BMC lost a huge amount due to this,” said Mohsin Hyder, a Congress corporator.

The 21 developers who have responded to BMC’s notices have to pay around Rs190.99 crore, but the rest 23 developers with whom no negotiations have taken place owe the civic body around Rs465.10 crore.

According to officials, the defaulters often float a new firm to bid for construction projects, which makes it difficult to put their other projects on hold. The BMC is planning to circumvent the problem by penalising the architects of these projects. “It is hard to trace the developer, but the person who can be held responsible is the architect of the project,” said the official.

Deputy municipal commissioner (improvement) Milin Sawant said, “As per the new rules, a developer has to pay 20% of the premium while getting LoI and 60% while obtaining a no-objection certificate to sell flats. The rest 20% can be paid while obtaining the OC.”

Civic activists have slammed the BMC over handling defaulters with kids’ gloves. “If a common man fails to pay the water bill, the BMC officials act promptly and cut his water connection. But since the administration and developers are hand-in-glove, no action is taken against the latter,” said Aftab Siddiqui, chairperson, 33rd Road ALM, Bandra.