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Confusion over repeal of urban land ceiling Act stalls Mumbai projects

Confusion over repeal of urban land ceiling Act stalls Mumbai projects
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First Published: Fri, Apr 04 2008. 12 49 AM IST

Longer wait: A construction site in Kandivali (east). Developers say that around 40 new residential projects in Mumbai and Thane are held up because of confusion over the terms of repeal.
Longer wait: A construction site in Kandivali (east). Developers say that around 40 new residential projects in Mumbai and Thane are held up because of confusion over the terms of repeal.
Updated: Fri, Apr 04 2008. 12 49 AM IST
Bangalore: Four months after Maharashtra repealed a law capping how much land could be owned by one individual or entity — a move that was expected to free up as much as 1,200 acres for development, and accelerate the approval process for
Longer wait: A construction site in Kandivali (east). Developers say that around 40 new residential projects in Mumbai and Thane are held up because of confusion over the terms of repeal.
new developments — there has been no change in the situation in Mumbai because no one is clear on the terms attached to the repeal.
The Urban Land Ceiling and Regulation Act, or Ulcra, mandated that no individual entity could own more than 500 sq. m of vacant land in Mumbai. The ceiling was higher in other cities in the state where the law applied.
With the Act repealed in November, builders and developers were no longer required to get permission from the land ceiling authorities in the government, a process that involves considerable time and a significant fee.
However, developers say that around 40 new residential projects in Mumbai and Thane are stuck in limbo because of confusion over the terms of repeal. Affected developers include Marathon Group, Lok Housing and Construction Ltd and Acme Group.
Since November, when Ulcra was repealed, the urban land ceiling department has maintained that the previously mandatory no-objection certificate for projects on land measuring at least 500 sq. m is no longer needed. However, the building proposals department of Brihanmumbai Municipal Corporation (BMC) says it cannot approve these projects because it isn’t clear whether they are on land that has previously been acquired by the government under the provisions of Ulcra.
The Maharashtra government had been acquiring surplus land from private landholders in Mumbai and surrounding areas before the repeal. The government and BMC now need to ensure that none of the new projects come up on land which is in government possession.
In the past, the urban land ceiling department’s no-objection certificate would have ensured that the land was “clear”, as it is termed. In the absence of this certificate, BMC has to figure out a way of ensuring that the land being developed actually belongs to the developer. For builders, this means a longer wait.
S.R. Jhondale, additional collector of the urban land ceiling department, says the state government has now intervened and passed an order to bring out a list of “clear” land that has not been acquired under Ulcra. “Now, the BMC doesn’t know if a land is clear and, thus, has to verify it. The confusion should end once we give this list to BMC.”
Ulcra was introduced in 1976, primarily to enable low-cost housing. The land acquired from individual entities with more than 500 sq. m was to be used for mass housing projects. Though the Centre had repealed the Act in 1999, states such as Bihar, West Bengal and Andhra Pradesh have still held on to it.
In reality, though, while the Maharashtra government has around 2,300 acres of surplus land spread across its eastern and western suburbs of Bhandup, Goregaon, Malad, Kandivali and Borivali, little has been allocated for mass housing projects. And around 1,830 acres of land in Mumbai has been doled out for many private projects since 1976.
Builders in Mumbai complain that things have almost come to a standstill. “The administrative departments are not sure of what they should do with the land after the repeal and the government hasn’t put out a notification on this,” says Mayur Shah, joint secretary of the Maharashtra Chamber of Housing Industry and chairman of Marathon Group, whose three projects are stuck as a result of the confusion.
Lalit Gandhi of Lok Group says not even one project has been cleared in the past three months.
“The repeal has complicated matters, and delay in sanctioning new projects would lead to cost escalation and longer delivery time to buyers,” says Mukesh Patel of Neelkanth Group,
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First Published: Fri, Apr 04 2008. 12 49 AM IST