There may be some respite for real estate companies in Mumbai whose projects have been stuck due to regulatory approvals. The Maharashtra government is now looking to fast track project clearances that have been gathering dust for over one year, reports Priyanka Ghosh of CNBC-TV18.
2011 was a year of record low launches in the Mumbai realty space with leading companies barely announcing a handful of new projects.
While Godrej Properties and Bombay Dyeing launched one project each.
Lodha Developers could only launch its Wadala project which is outside the jurisdiction of the BMC or the Brihanmumbai Municipal Corporation others, such as Oberoi Realty, Indiabulls and Orbit Corporation did’nt even have a single launch.
So why this freeze? On one hand, the state government has been slow with project approvals. On top of that developers too have had to rework projects due to the new DCR guidelines. For example, Indiabulls and Oberoi Realty have both had to change the fine print of projects launched almost 20 months back and are now looking at a re-launch.
Prithviraj Chavan, chief minister, Maharashtra, says that the old BMC commissioner set up some new timelines, we changed the building rules to get in some transparency. Whenever rules are changed, it takes some time to set in. I am meeting industry representatives and whatever difficulties they are facing will be resolved
Lack of new launches has deepened the crisis in the sector in the past one year. While most agree that permission delays have had an adverse impact on demand and prices as supply has been squeezed out of the market, they are hopeful that in the next six months, the government will take concrete steps to normalise procedures. To begin with the government is looking to fast track environmental clearances by setting up more committees.
One thing that is coming in the way is the delays that environment clearances take. Because the committee of officials that look into it is not in place or even if they are, they don't meet very often, it takes a long time for projects to get clearances so, I have proposed to the Urban Development Ministry to set up more committees.
But analysts say, the days of rampant launches are unlikely before next year at least and till then with limited supply in the market prices are likely to stay high.