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Maharashtra housing scam: How Prakash Mehta tried to ensure windfall for builder

Did housing minister Prakash Mehta expand the scope of the project to benefit developer?

mumbai Updated: Aug 04, 2017 10:14 IST
Faisal Malik
Maharashtra housing minister Prakash Mehta.
Maharashtra housing minister Prakash Mehta.(HT File)

Under-fire housing minister Prakash Mehta, who is facing allegations of having favoured a builder in a Ghatkopar transit camp project, had gone out of his way to expand the scope of the project and convert it into a larger slum redevelopment scheme.

Had the decision been implemented, it would have resulted in a windfall of around Rs1,000 crore for the developer, claimed Dhananjay Munde, the opposition in the Legislative council.

Mehta, a legislator from Ghatkopar, who was handpicked by chief minister Devendra Fadnavis in 2014, could soon either become the second minister from the Maharashtra cabinet to be ousted over graft charges, or may be demoted during the upcoming cabinet reshuffle. While the verdict is still out on Mehta’s fate, the final decision will be taken by the party’s top brass in Delhi.

What may, however, save Mehta is his political significance. He belongs to the Gujarati community in Mumbai, which has stood firmly behind the BJP over the past few years.

While Mehta is already facing allegations of corruption in a slum rehabilitation project at Tardeo’s MP Mill Compound, the minister had planned to convert a transit camp redevelopment project, which was cancelled in 2012 by the previous government, into a larger slum rehabilitation project by clubbing adjoining six slum pockets can bring windfall to the selected developer. Ghatkopar is one of the prime real estate areas in the eastern suburbs.

Mehta, however, has already rubbished the allegations. “The allegations don’t have an iota of substance. I am ready to face any inquiry and not scared of any probe,” he said. “I have done nothing wrong and unethical and there is no question of my resignation. The opposition has no right to ask for my resignation. My party leadership in the state and chief of cabinet Devendra Fadnavis will take the decision.

Read: After SRA scam, Maharashta housing minister Prakash Mehta in fresh trouble

The Opposition has accused Mehta of re-allotting a Maharashtra Housing and Area Development Authority (MHADA) plot in Pantnagar (Ghatkopar) to a developer, whose allotment had been cancelled in 2012 for failing to deliver the requisite tenements. But, it has now emerged that Mehta had in a meeting held on January 6 this year asked housing department officials to revive this project as a slum rehabilitation scheme.

In an unusually quick action, the department issued a government resolution (GR) on the same day, clubbing six slum pockets of the adjoining plots with the transit camp project, to convert it into a mega Slum Rehabilitation Authority (SRA) scheme. The GR, however, does not mention awarding the project to a particular developer.

The Opposition, however, has alleged that the SRA project was intended to benefit the developer, who had initially got the rights to develop the transit camp.

Surprisingly, the GR issued in January has still not made its way to the government website – a mandatory norm. (A copy of the GR is with Hindustan Times)

Under the SRA scheme, a developer is cross-subsidised for building homes for slum dwellers and lower income groups in exchange of incentive Floor Space Index (FSI).

FSI is the ratio of the permissible built-up area to the total size of the plot. It typically indicates how high a builder can construct on a given plot of land. In case such as the Ghatkopar one, the developer could have got a FSI of 3 over a much larger area – spread across six slum societies – besides the transit camp plot. If the tenement density is more than 650 per hectare, the developer can even get a FSI of 4, said officials.

Read: SRA scam: Maharashtra chief minister Devendra Fadnavis orders probe, housing minister under scanner

The higher FSI ensures that developers can build more houses, which can be sold in the open market to make profit.

In 1999, the MHADA-owned 18,902 square metre plot was allotted to Nirmal Holding Private Limited (NHPL) to construct a transit camp by utilising the FSI of 1.25 and using the remaining FSI of 1.25 for commercial purposes. NHPL was to construct 672 tenements, but they were never constructed. The Opposition alleged that as a local MLA, Mehta intervened in 2006, when Mhada suggested that the allotment be revoked as the developer had failed to take the project ahead. In 2008, Mhada again said that if it developed the plot on its own, 1,448 tenements in the transit camp would be built besides another 205 flats. The allotment was finally revoked in 2012.

Despite repeated calls and text messages to NHPL, the developer remained unavailable for a comment.

Sachin Ahir, former minister of state for housing, slammed Mehta. “The decision taken by the housing minister is wrong. During our tenure, the Congress-NCP government had taken a policy decision that such redevelopment on MHADA land should be undertaken by them only. This is how we could create affordable houses at Pratisksha Nagar, Sion and Mulund. With the fresh move, the government will not be able to create affordable houses,” Ahir told HT. “With such a decision, there will be little land available for building affordable homes.”