Mumbai: There has been a poor response to the Maharashtra government’s offer to fast-track construction projects by 18 months if real estate developers opt for a green building certification process. Developers have applied for certification for only 15 out of 300 projects, according to a government official.
Union ministry of environment and forests (MoEF) guidelines stipulate that every project that involves construction of 20,000 sq.mt. and investment of Rs.5 crore or more needs green clearance from the state government’s environment ministry.
Toward this end, the Maharashtra government has formed two state-level expert appraisal committees (SEACs)—one for the Mumbai Metropolitan Region (MMR) and the other for rest of the state. SEAC approval can take up to 18 months, which means almost every real estate project in the MMR region and cities such as Pune are delayed to this extent.
To address the issue, the state government announced in August 2011 that projects with a green building certification would be given priority, incentivising builders to reduce the SEAC waiting time. Green buildings use less water, conserve energy and generate less waste.
“Hardly any developers are interested in getting a green building tag for their building and jumping the queue,” said Maharashtra principal secretary, environment, Valsa Nair Singh. “Developers of only 5% projects out of 300 projects pending before the SEAC, have opted for a green certification to jump the queue.”
The rise in land prices and other input costs have deterred residential developers from opting for green buildings, said experts.
“A green building certification can raise the cost of construction by Rs.100-400 per square foot,” said Sanjay Dutt, executive managing director, South Asia, Cushman and Wakefield, a commercial real estate broker and consultancy. “The cost of construction in Mumbai is already high, and residential property developers do not want to escalate the price further. They are in a hurry to sell their buildings to generate cash flows for their business.”
Mumbai-based architect and town planner Anant Gadgil said such buildings “are a little more costly than normal (concrete) buildings which may increase costs for buyers, because of which many developers are not very keen on... green projects”.
However, a cost benefit analysis over the lifecycle of building, shows that green buildings are not only healthier to live in but also cheaper in the long run, which is why the government must undertake massive public awareness programmes in this regard, he said.
More should be done to encourage such buildings, according to some.
“Even if a builder opts for a green building (certification), he may be saving a maximum of three months. That is not a great incentive,” said Lalit Kumar Jain, president of the Confederation of Real Estate Developers Associations of India (Credai).
A Mumbai-based developer, who did not want to be named, said, “If the government wants to promote green buildings for residential purposes, then it should offer a higher floor space index (FSI) to developers and benefits like rebate in property tax and water charges among others to occupants.”
Many experts said project approval delays were among the main reasons for rising property prices.
“There is no need for a committee-oriented system followed by SEAC. This will only choke the supply and raise the price of the property,” said Pankaj Kapoor, managing director of Liases Foras, a real estate research firm.
In India, the Indian Green Building Council (IGBC), promoted by the Confederation of Indian Industry (CII), is a leading agency that provides green certification to real estate projects.
IGBC promotes the Leadership in Energy and Environmental Design (LEED) green building rating system in India that evaluates environmental performance over a structure’s lifecycle, providing a definitive standard for what constitutes a green building.
LEED is an internationally-accepted measurement system designed for rating new and existing commercial, institutional and high-rise residential buildings. The other rating systems are Green Rating for Integrated Habitat Assessment (GRIHA) by The Energy and Resources Institute (TERI) and star ratings by the Bureau of Energy Efficiency (BEE).