Redevelopment projects derailed by Covid-19?

The Covid-19 pandemic is likely to have derailed the redevelopment process of old and dilapidated buildings in the city. There are nearly 40,000 such buildings in

The Covid-19 pandemic is likely to have derailed the redevelopment process of old and dilapidated buildings in the city. There are nearly 40,000 such buildings in the city housing lakhs of citizens.

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Builders are wary of taking up these projects due to a range of reasons including liquidity crises, high premiums, lack of manpower as well as negative sentiments in the realty sector.

“Forget new ones, we are worried about executing our existing ongoing projects. We are facing acute shortage of funds and also don’t have labour to carry out work at construction sites,” said Harrish Jain, vice-president of Brihanmumbai Developers Association.

He added, “Builders are not in a position to take up any new projects; many may even exit current negotiations which have been going on since before Covid-19 lockdown.”

Ashok Mohanani, chairman of Ekta World, a group specialising in redevelopment projects for affordable and luxury segment in Mumbai, said it is unviable to take up new projects in the current circumstances. “It is impossible to take up projects if the government continues to charge us such high premiums and taxes,” said Mohanani. “Even the banks are not supporting us in these difficult times. In such circumstances, how can we execute any project,” he said.

For years, builders used to secure developmental rights of old buildings, wherein they would construct new building in the plot have and give existing tenants bigger apartments for free, while selling the other apartments at market price.

Even tenants who have given developmental rights to builders are in a fix. “There is fear among residents that they may end up on streets if builders fail to execute the project. Hence, many are deferring redevelopment plans,” said Ramesh Prabhu, chairman of Maharashtra Societies Welfare Association.

State housing minister Jitendra Awhad agrees that these are hard times but added that the government is committed to ease the solution. “We are planning to reduce premiums in the coming days. To speed up projects, we will now fix deadlines where permissions have to be given within a fixed period,” said Awhad.