The Maharashtra government has formed a seven member high-power committee, consisting of Indian Administrative Service (IAS) officers from departments of urban development, finance and planning to study the optimisation of the premium paid by developers for additional Floor Space Index (FSI) in the Bandra-Kurla Complex (BKC) in Mumbai.
The committee will study and suggest ways by which land premium, which is currently levied as per open market rates, for additional FSI approved by the Mumbai Metropolitan Region Development Authority (MMRDA) can be optimised, the urban development department said in a notification.
The MMRDA is the planning authority of BKC, which spreads over 370 hectares.
“Currently, we are giving a base FSI of 4, which is a global standard, and additional FSI is purchased by paying a premium. This study will benefit all the land parcels where there is scope for further increasing the FSI," SVR Srinivas, Metropolitan Commissioner, MMRDA, who is also a member of the committee, said.
The BKC is one of the costliest commercial districts in India. The per sq ft rate here goes even up to Rs 1 lakh in rare cases from as low as Rs 20,000 per sq ft. It houses headquarters of several companies like the National Stock Exchange, Bank of Baroda, Indian Oil, Reserve Bank of India, and the US Embassy.
Also read: Avendus Capital leases four floors in Mumbai’s BKC for Rs 2.4 crore per month for five years
The urban development department notification comes in the backdrop of the MMRDA trying to fetch around Rs 500 crore by leasing over 10,000 sq m of two land parcels, but has not found any takers.
What is the committee’s task?
The notification empowers the seven members to identify the problem and suggest ways for land monetisation in BKC.
The committee will have to study the different types of premium or fees levied by several authorities, and whether permission for additional FSI or construction can be given to promote BKC by optimising the premium.
After considering all the rules and regulations, the committee should prepare a report that will promote development and construction activities in BKC, reads the notification.
"The committee has been appointed because the state government must have felt that the premium charged for additional FSI is very high. The committee will study all issues and prepare a report on the way ahead,” said Srinivas.
The MMRDA, in the past one year, has attempted to lease out two different plots in BKC in order to fetch around Rs 494 crore. However, several extensions have been given.
The two plots include one measuring 6,077 sq m with a base price of Rs 3.44 lakh per sq m in the G Block of BKC, followed by an adjacent plot measuring 5,807 sq m in the same base price of Rs 3.44 lakh per sq m.
The MMRDA plans to lease both the plots for 80 years, and both plots have the potential to construct 30,000 sq m each. The permissible usage for both plots is 30 percent residential and 70 percent commercial. Despite repeated attempts, the MMRDA has not been able to find any taker.
Need for a third commercial business district
BKC, which was originally conceived as the city's second commercial hub after Nariman Point, will reach its saturation point over the next decade, MMRDA had said in a report in 2018.
Hence, there is a requirement of a third commercial business district (CBD) to fill the gap in market for quality commercial spaces. The MMRDA is planning to convert a huge land parcel of the Wadala Truck Terminal (WTT), measuring around 122 hectares, into the city's third CBD. MMRDA is the special planning authority (SPA) for the area.
Pre-COVID, around 2 lakh people were travelling to BKC every day. This would also mean the movement of 20,000 vehicles, according to MMRDA estimates.
Also read: Developer ordered to pay interest to office buyer in Bandra Kurla Complex for 50-month delay
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