Bangalore/Mumbai: The Maharashtra government has initiated a dialogue with the Union ministry of environment and forests (MoEF) to ensure speedy environmental clearance for real estate projects, saying it’s worried about the impact of delays on property prices.
Some 360 property projects in Mumbai and Pune have been held up because they are yet to receive clearance from MoEF, causing concern in the state government. Critics claim it’s not a genuine concern about property prices rising that has spurred the government, seeing it more as a lobbying effort on behalf of the real estate sector.
In a letter written to MoEF secretary Tishyarakshit Chatterjee, Maharashtra chief secretary Ratnakar Gaikwad blamed the State Expert Appraisal Committee (SEAC) and the State Environment Impact Assessment Authority (SEIAA) for high real estate prices in Mumbai and Pune. He asked MoEF to scrap both committees and form a single committee instead.
SEAC and SEIAA are bodies constituted by MoEF for granting clearance to all projects that involve investment of Rs 100 crore or more. SEIAA grants or rejects environmental clearance for projects based on recommendations made by SEAC.
In a letter, a copy of which has been reviewed by Mint, Gaikwad said that nearly 400 projects were pending before these committees and 90% of these are real estate and infrastructure projects.
“A single committee is a solution. These committees can be constituted similar to the Coastal Zone Management Authority, which is also committee under the ministry of environment and forests”, Gaikwad suggested.
Gaikwad has also suggested that the MoEF consider exempting residential projects from seeking separate environmental clearance. He called for stringent conditions to be applied at the time of approval of building plan by the municipal authorities.
When contacted, SEAC chairman Sukumar Devotta declined to comment. Calls and emails to Chatterjee hadn’t been returned at the time of going to press.
Housing activists aren’t convinced the government truly has consumers’ interests in mind.
“We have seen 1,000 people losing their lives in the 26/7 deluge in 2005 and it was because environmental norms were openly flouted by the builders..,” said Simpreet Singh, an activist with Ghar Bachao Andolan. “...and if in this light, if these environmental bodies are seeking some more information or putting some stringent condition before clearing the project, then I don’t think they are exceeding their brief.”
Had the government been concerned about ensuring affordable housing for residents, it would have acted on suggestions including the use of land covered by now defunct cotton mills in south-central Mumbai to construct inexpensive houses, he said.
Delayed clearances push up costs and the increase is ultimately borne by buyers, Boman Irani, secretary of the Maharashtra Chamber of Housing Industry (MCHI), said.
“It takes a year-and-a-half for a project to get approved. All we are saying is give us clear guidelines that we can follow so that the process can be fast-tracked and streamlined,” said Irani. “Delays in clearances result in the rise of interest costs, which then are passed on to the end-user, consumers.”
Two developments that have been affected by SEAC’s refusal to grant environmental clearances are Indiabulls Real Estate Ltd’s projects to redevelop an information technology (IT) park-cum-residential towers at Jupiter Mills and Elphinstone Mills in south-central Mumbai. While the office space-IT park component at the two mills has been cleared, permission for the residential part has been withheld by SEAC.
SEAC has said it is not inclined to recommend clearances for the projects unless the Mumbai-based developer substantially cuts down on construction or built-up area and parking area and submits a revised proposal to the municipal authority.
“Overall, the projects have got building approvals from MCGM (Municipal Council of Greater Mumbai). We plan to submit the proposals for the two residential buildings again, without revising it,” said Vipul Bansal, chief executive of Indiabulls Real Estate.
A senior property consultant, who didn’t want to be named, said these two projects are high-value projects of the developer relative to its other projects in Panvel, in Navi Mumbai, and in the National Capital Region centred on New Delhi.
Indiabulls has received advances from customers on the two projects and if they “remain stuck, buyers will demand cancellations and refunds”, he said.