Construction Industry News
The Brihanmumbai Municipal Corporation (BMC) has rejected its plan to issue credit notes instead of cash to the contractors for the construction of 12,000 dwellings of Rs 9,000 crore for Project Affected Persons (PAPs).
BMC will build just 4,000 homes in Chandivali through cash for about Rs 2,500 crore.
The 4,000 PAP units built through credit notes and development rights transfer (TDR) have been submitted to the municipal corporation committee for approval. The developers can use the credit notes to pay city taxes and premiums to BMC or can also sell the credit notes to other developers.
According to an official, the company has received applications for PAP units and will conduct a detailed analysis by verifying the agreement value in zones from the Inspector General of the Department of Registration and Stamping and find out that the rates for only one zone were feasible in Chandivali.
The value of the credit notes is Rs 1,584 crore, Land TDR Rs 295 crore and Construction TDR Rs 619 crore. Each 27.9 square meter PAP unit costs BMC more than Rs 60 lakh. BMC's total savings will be close to Rs 178 crore as compared to the market rates. For its ongoing infrastructure projects, BMC needs 36,000 PAP units, the official said.
In March, BMC decided to go cashless for a Rs 9,000 crore housing mega project for PAPs. Out of the total amount, Rs 6,000 crore was paid via credit notes while the rest was TDR. Under the plan, landowners with land reserved for PAPs or housing can offer their land to BMC.
The owners will also have to build it for BMC. The company will house people affected by infrastructure projects such as the construction of roads, viaducts and bridges, and the laying of sewers.
The opposition party claimed the plan would become a scam if developers started paying via credit notes when the company faces a financial crisis.
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