(update as on 03.04.2019, Member’s visit stood however cancelled)
The Customs Department, Mumbai owns a plot of land measuring about 55.85 Acres
(approximately 226000 sqm)*, situated at C. S. No. 146 at Wadala (E), Mumbai. Having given up almost 11 Acres of total land for Anik-Wadala link Road (referred as DP Road, in terms of City Development Plan) and Eastern Freeway, currently 45 Acres of land is available with department as net usable land. The title of the entire 56 acres of land though remains with department. Earlier, the entire land came under salt pan area which was only eligible for construction of Warehouse purposes. Later, through phased notifications, the land was notified for mix use constructions (Warehouse & Residential) and subsequently for residential purposes constructions. As on date the entire usable land stands eligible for Residential construction purposes in the state government records.
2. Currently, the available 45 acres of land lies trifurcated into 24 Acres, 3 Acres & 18 Acres due to passage of Anik-Wadala Road (a DP Road) and Eastern Freeway through the land. The land plot is situated at very prime location of Mumbai and is well connected through roads and Express Freeway to South Mumbai and on the other side to Navi Mumbai. Almost the entire land is placed in Residential Zone in terms of Mumbai City Development Plan, DP-2034, except a very small portion under CRZ-II (Approx. 1 Acre). New Cuffe Parade being developed by Lodha Group and Projects of Ajmera are only within a Kilometre range of the Customs Enclave Plot.
3. The department has since long been planning to construct office cum residential
complex on this land situated in the heart of city. The proposals from different PMCs have been produced in the past, however because of unforeseen hurdles along the way, the project couldn’t came off.
4. Until 23.10.2018, the proposal was to construct office cum residential complex on self- sustainable model which was aimed to suffice the entire requirement of CBIC, CBDT, ED, Directorates apart from provisioning of school and hospital within the premises. However, denial of extending waiver of premium vide Government of Maharashtra letter dated 23.10.2018 compelled the department to lower down the scale of the project which was termed as version FSI 2.07, basically using only FSI free of premium.
5. FSI 2.07 proposal went under discussion for few months until it was observed that
undue amount of land was being wasted to fund the construction of small portion of
government office and residences. In this backdrop, a meeting with Revenue Secretary was held on 26.12.2018 wherein, it was suggested by RS, that modalities were to be devised by NBCC so as to harness full potential of the land and simultaneously plugging the viability gap arising out of premium due to state. Accordingly, a fresh proposal by NBCC was furnished to the department on 11.01.2019 which envisioned catering to the entire needs of CBIC and only residential requirement of CBDT while using full FSI 4/5. To discuss the proposal dated 11.01.2019, a meeting was convened on 15.01.2019 chaired by Shri Rajeev
Tandon, the then Principal Chief Commissioner.
6. During discussion in the meeting dated 15.01.2019, some crucial considerations
came up as hurdles in rolling out and successful execution of Project. Certain new
revelations demanded revisiting the implementation of the project model. Hence, this proposal also went into serious deliberations with higher authorities.
7. While the proposal furnished by NBCC was found to be infested with many
shortcomings, the overall revenue generation modality also sounded flawed in terms of inconsistent cash flow to fund the Govt. portion of the project. The proposal was third in row, based on Built Up Area (BUA) sale funding model and this proposal too, didn’t look robust enough to help project take off.
8. PPP Expert opined that modality of funding was critical for viability of any project and the department as the project owner should also explore other funding models such as FSI sale model adopted by MMRDA and CIDCO. The model as he suggested was free of compliance requirements and corporate buyers can offer upfront money on FSI buy and consequently the Govt. part of the project could straightway be kick-started.
9. Subsequent to that, the department had a meeting with MMRDA officials and roped in CBRE services via PPP expert who all suggested that FSI sale model was a better option than BUA sale model. NBCC too was directed to explore the FSI sale model, the reports are yet to come however.
10. As per the report dated 28.01.2019 from CBRE a detail contrast between the BUA
sale Model and FSI Sale model has been drawn and recommendations are there to go with FSI sale model preferably. The main reasons cited, are the highly unsold flats inventory and RERA compliances involved in the process of project implementation.
11. On top of the CBRE report dated 28.01.2019, Sh. Ajay Saxena, PPP Expert has
made his personal observations also and vide his report dated 28.01.2019 has suggested that deposit work/Govt. funding would be the best of all funding models even better than FSI sale model. PPP expert further clarified that if the department has to exercise preferences over Govt. funding, FSI sale Model and BUA sale model, going in order is a way to go.
12. Renowned consultant-cum-Architect, from city, Shri. Ratan J. Batliboi, who has
worked for MMRDA projects, was also approached by the department and a presentation was given by him on 29.01.2019 over the funding modalities and phasing of entire project for successful completion of project. From his presentations too, the same preferences over funding models as suggested by Sh. Ajay Saxena, PPP Expert could be inferred too.
13. Although, compliance free FSI sale model is way better an option than BUA sale
model as per the suggestion of experts in the field, it was opined that selling FSI in current market scenario may not fetch desirable amount of money for the project and higher authorities may be approached for funding the government project in the first place. FSI sale model remains there as next best option.
14. Under the evolvements, Chief Commissioner of Customs, Mumbai Zone-I along with Chairman CBIC met Revenue Secretary, Govt. of India on 30.01.2019. The Revenue Secretary was apprised of the viability issues of previous models in Wadala project along with apprehensions of losing the empty land towards cause of the State Govt. especially the Metro project coming up in the area shortly.
15. Based on the arguments to expedite the roll out of the project, an informal assurance was obtained from RS that the project would be undertaken on deposit work model. And that around Rs. 2000 Cr. would be granted to the cause of the project in a phase wise manner. The department worked out the ways so that the bare minimum requirement of CBIC office and staff quarters could be built with Rs.2000 Cr. using major part of FSI available free of premium. For optimal utilization of fund, department also tried figuring out if CPWD could be a substitute of NBCC in so far as no PMC fee was involved with them.
16. However, considering budget constraints with government even a way smaller layout, was conceived by building committee and the Chief Commissioner of Customs, Mumbai Zone-I had a meeting with ADG(WZ)/CPWD on 31.01.2019 and discussed the immediate requirement of office and residences of the department. A letter dated 01.02.2019 was issued to CPWD for providing Preliminary estimate for about 67962 Sq.Mtrs. of office space and 859 quarters of various types viz II to VIII, which is somehow will be catering to immediate needs of CBIC.
17. A letter dated 01.02.2019 was written to DGHRD for the funds projection in B.E. 2019-20 separately for: (i) Construction of office building at Wadala Rs. 100 crores under head 4059 and; (ii) Construction of residential quarters at Wadala Rs. 100 crores under head 4216.
18. A presentation on the project had, was given before Revenue Secretary, Govt. of
India on 07.02.2019, which was attended by Chief Commissioner of Customs, Mumbai, Zone-I along with Chairman CBIC, Member (Admin), DGHRD and representative of NBCC.
19. CPWD, vide Letter dated 05.03.2019, has submitted the Preliminary Estimate for the construction of office complex and residential accommodation as per under-mentioned details:
(i) P/E for construction of office complex having total covered area of 68575 sqm
with the cost of construction of Rs. 495.5 Crores.
(ii) P/E for construction of 769 nos. of residential quarters from Type-II to Type-VIII
and a sports complex with the cost of construction of Rs. 499 Crores.
20. The P/Es submitted by CPWD have been forwarded to DGHRD on 05.03.2019 for Administrative Approval and Expenditure Sanction of the competent authority in the prescribed proforma along with draft PIB memorandum.
21. Chairman CBIC, Member (Admin), DGHRD and Chief Commissioner of Customs had a meeting with Revenue Secretary on 08.03.2019 to discuss the way forward on Wadala Project. The P/Es dated 05.03.2019 submitted by CPWD was discussed in brief with Revenue Secretary. The revenue secretary showed his concurrence that department could go ahead with CPWD on deposit work model.
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