The Slum Rehabilitation Authority (SRA) of the Maharashtra government has received four applications from financial institutions interested in taking over stuck rehabilitation projects funded by them.
The Maharashtra government, in the last week of May 2022, gave approval to the amnesty scheme under which financial institutions that are registered with the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and the National Housing Bank (NHB) and have financed stuck schemes, will be allowed to take over redevelopment of stuck projects.
Moneycontrol had reported on June 2 on the SRA having floated expression of interest (EOI) for the same. The last date for application was July 21, 2022. However, according to officials, the EOI will be extended by another 15 days subject to approval from the chief executive officer (CEO) of the SRA.
A senior SRA official, not wishing to be named, said, "We have got four applications for reviving stuck redevelopment projects across south Mumbai, Central Mumbai and the western suburbs. We will have to scrutinise these applications. However, considering there are more projects we may extend the dates for submission under this EOI. The names of these four financial institutions will be announced after closure of the window for submission of applications under this EOI."
In Mumbai, over 500 slum redevelopment projects are stuck and the Maharashtra government has plans to revive these projects to ensure those displaced get a house, and the financial institutions that are making losses, can recover their money. According to a list prepared by the SRA in April 2022, there are around 517 slum rehabilitation schemes in the city that are stuck, and which need to be brought back on track to ensure that slum dwellers get their homes.
The SRA was set up by the Maharashtra government in the late 1990s to make Mumbai, the financial capital of India, slum-free. It allows private developers to rehabilitate slum dwellers residing on various plots. In return for rehabilitating the slum dwellers in apartments, the developer is granted additional Floor Space Index (FSI).
This allows the developer to commercially sell additional flats, also known as sale component, and make a profit. The term FSI refers to the ratio of the extent of construction permitted on a given plot area.
Meanwhile, in the public notice issued on June 2, 2022, the SRA had stated, “Several slum rehabilitation projects have been stalled in Mumbai, and since several years there has been no progress. The state government has (from) time to time taken various decisions and granted concessions in order to motivate developers to take necessary steps to complete such projects. However, demonetisation, COVID-19 pandemic and the overall slowdown of the economy (are among) the major reasons for such delay in implementation of projects.”
The notice further reads, “Several financial institutions have granted finance to slum rehabilitation schemes. But in spite of the finance, the concerned developers have failed to complete the rehab component in the schemes, and failed to pay transit rent to eligible slum dwellers. Considering the interest of slum dwellers at large, financial institutions having recognition/approval of RBI, SEBI, NHB, will be allowed to come forward to complete the schemes to which they have granted finance. The name of such financial institutions shall be entered in the Letter of Intent (LoI) of the scheme as co-developer or lender.”
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