The cash-strapped BMC will allow private parties to redevelop 674 of its plots across the city given on tenancy decades ago. With its finances hit badly due to the pandemic, the civic administration wants to monetise its real estate.
Developers will have to pay 62.5 % of the land cost (ready reckoner rate) for residential building construction and 125 % for commercial buildings and can use the plot’s entire development potential for their profit. The civic body will also allow conversion of these ‘tenancy plots’ to ‘lease-hold plots’ for 60 years, thereby giving the lease holder virtual ownership of the plots.
The BMC general body cleared the policy last March and recently, the administration introduced guidelines.
Sources said the BMC could earn “thousands of crores” as one-time premium through these plots. The BMC has also warned tenancy holders to come forward and avail this benefit, or it will cancel their tenancy rights and auction the plots.
These plots were vacant when given on a tenancy basis since 1937; the corporation charged a very nominal rent from the occupant, and no development was allowed without the civic authority’s permission.
The guidelines state that the corporation will charge a one-time premium to the tenancy holder to hand over the plot to them for their use on a 30-year lease, which will be further extended for another 30-year period.
The guidelines say lease holders will have all the development rights of the plot, can use the available FSI of the plot and construct residential-commercial buildings on it for sale.
Deputy municipal commissioner Ramesh Pawar said, “We are allowing utilization of construction potential of these plots after charging a one-time premium.”
Although illegal construction was made on many of these plots over the years, the BMC could not take them back as tenants are protected under the Rent Act. The tenants of these plots could also not develop them without BMC permission. “The new policy is a win-win situation for both. Most of these plots are in Island city,” said civic officials.
Architect and former president of Practicing Engineers, Architects and Town Planner Association, Shirish Sukhatme said, “BMC is virtually selling these plots by charging a huge one-time premium after giving all development rights to the lease holder. It will be a win-win situation for both. There are many such plots which saw illegal construction over the years due to negligence of BMC officials, and the civic authority is not earning anything from these structures.”
He added, “It will generate good revenue for the BMC. But to make it more popular, instead of charging a one- time premium of the ready reckoner rate of the entire plot, the BMC should charge it according to the available balance FSI on the plot, as the developer needs to accommodate the existing tenants.”
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