Saturday, May 21, 2011

Finally Maharashtra gets an action-oriented CM

After nearly a decade of mis-governance, Maharashtra finally appears to have got a performing CM. I wrote about him once earlier in the context of the several infrastructure projects that are being speeded up by him. Today, I write about him because of the cleaning up of the real estate sector in Bombay that he is doing.

Everyone knows that the island of Bombay has no land left. In any other country, this would have meant the coming up of huge skyscrapers which are far more efficient users of land. Small buildings are a luxury a city like this couldn’t afford. Even in Bombay, skyscrapers are coming up thick and fast. However, in the past, the process of sanctions to high rise buildings has been shrouded in secrecy and corruption. Instead of changing the laws to allow higher buildings legally.....clearly a need of the hour.....the government continued with the old law that provided an FSI of just 1.3 in the island city (and 1 in the suburbs). This was an antiquated law that needed to be changed. How can the permissible FSI be so small when there is such a paucity of land? If the government’s idea was to encourage a shift in the population to areas outside Bombay (even further away from the New Bombay, Virar,
Mira Road
, Bhayander, Bhiwandi etc), then the government didn’t do enough to build connectivity from these areas to areas of work in Bombay (like Nariman Point or Lower Parel). Not building this connectivity probably was also intentional.....a way of keeping pricing high in “town”. The real estate sector was a den of corruption, with municipal officers apart from politicians, using discretionary powers to clear new building projects for a stiff price. The maximum corruption in Bombay came from the real estate sector.

Today, the new CM of Maharashtra has decided to make the rules a little simple. And a little more logical. He’s legally allowed an FSI of 3 for “cessed” buildings.....cessed buildings are probably unique to this city.....these are buildings which have been grabbed by tenants many decades back. They pay extremely low rents and they refuse to vacate the premises. There are some 15000 such cessed buildings in Bombay. Since the tenants pay low rents, the “owner” (who cannot evict the tenants) refuses to keep the building in good conditions. These buildings are obviously in dilapidated conditions; many crumble every monsoon. And since they were built long long back, they are small in height. They are inefficient users of land. The only way land usage can be made more efficient is by breaking this dilapidated low-rise structure down, building a taller new structure and allowing these “grabbing” tenants space in it. It’s a bit like slum re-development projects. Slum dwellers (mostly illegal) get legal and permanents accommodation in a much taller building structure that comes up in place of all those illegal shanties. The taller structure makes much more efficient usage of land. Making an FSI of three automatic removes corruption. It’s a more transparent policy and its a good move.

Prithviraj Chavan must now take the bold step and make the FSI three (or four) for ALL building that come up in proper Bombay (“town” and suburbs). He must do away with all the devious (and discretionary) schemes that exist now to grant permissions for tall buildings. He has already scrapped the controversial “public parking” scheme....under which a builder was told to construct public parking return for higher FSI in his commercial project. Obviously, builders latched on to this scheme.....because there is so much demand for taller structures. But they cheated the system. The “public” parking structure would actually be built next to the commercial structure and the access to this public parking structure would be intentionally made difficult for the public. The public would never get to use the facility. In reality, the builder got a double advantage. He could provide more parking to the buyer of his commercial property (at a price of course!)....and also get a higher FSI (and make even more money)! All this was done with the connivance of the authorities. Chavan has dismantled this controversial scheme.

While making higher FSI automatic, Chavan must, of course, take care of the several other requirements a densely populated city like Bombay has. All parking must be self contained in the building itself; the building must be as “green” as possible; water harvesting must be mandatory. The access roads to the building must be wide and well developed for smooth movement of traffic in and out of the building and so on and so forth.

Chavan has also tweaked the rules for the “slenderness” of buildings. Slenderness ratio is defined as the ratio of the height of the building to the smaller dimension of the plot of land on which it is built. This ratio has now been set at 9. Anything above this is considered structurally unstable. The rule now is that structures with higher slenderness ratio than 9 will need approval from the municipal authorities.....but the rules for their approval have been laid down. The structural worthiness of the building must be proven by the builder. Even under earthquake conditions. In a way, this will encourage neighboring plot owners to “merge” their plots (thus increasing the smaller dimension of the plot of land) and construct a taller combined structure, rather than the many “slender” and unstable structures that have been coming up in the past.

If the intention is clean, it’s not that difficult to make the right laws. But if the intention is to make money on the side, and keep discretionary powers to themselves, politicians will intentionally make laws that have loopholes. Loopholes are not an unfortunate byproduct of law making; it is an intentional “provision” introduced by corrupt politicians to make money. All that Chavan is doing is removing these loopholes from existing laws. It may appear to be very little that he is doing, but often small changes have a very large impact.

Even otherwise, Chavan has been using his clout in the Central government to get clearances for Bombay. The airport at Panvel was cleared (finally) by Jairam Ramesh under cajoling from Chavan. The Sewri-Nhava Sheva sea link will also now be cleared quickly. 300 kms of roads are being built as a “ring” around Mumbai.....all of them are getting quick clearances. The 2nd metro line has been cleared; the 3rd one has already been drawn up. It’s a question of time, before this beautiful city regains it’s past....and slowly but surely depleting....glory.

The real truth is that Maharashtra has had poor governance for too long. The Ashok Chavans and Vilasrao Deshmukhs have exploited Bombay to fund their political ambitions across Maharashtra. Bombay has been treated like the proverbial goose that laid golden eggs. In an ideal scenario, Bombay should be made independent. It’s a global city like Hong Kong and Singapore and it needs to be run as such. If for political reasons, it cannot be made independent, then it should be treated “specially”. If India grows at the pace it is expected to, Bombay will become a strong financial hub in Asia. It had better gear up for that day!

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