1. DP Concerns For The Project
********EXPLAINED WITH RELEVANT REGULATIONS of DCPR-2034********| Sl. No. | Requisite Exemptions/Relaxations | Existing Provisions/Explanations |
|---|---|---|
| 1. | Premium/Charges Waiver | |
| (a)Premium Waiver on additional FSI for Govt office space (State Government/MCGM already exempted) [EP73 - DCPR 33(3)] | Zonal FSI is 1.33 for Mumbai Island City. As per Reg. 33(3) of DCPR 2034, the Commissioner, MCGM by special permission, may permit FSI up to 5.0 for Govt. offices on payment of premium on additional FSI. State Government/MCGM are categorically exempted from payment of such premium. | |
| (b)Premium waiver on additional FSI for Govt Staff Residence (State Government/MCGM exempted) [EP 74-DCPR 33(3)(A)(1)] | Zonal FSI is 1.33 for Mumbai Island City. As per Reg. 33(3)(A)(1) of DCPR 2034, the Commissioner, MCGM by special permission, may permit FSI up to 4.0 for govt. staff quarters on payment of premium on additional FSI. State Government/MCGM are categorically exempted from payment of such premium. | |
| (c)Premium waiver on Fungible Compensatory Area (State Government/MCGM already exempted) [EP74- DCPR 33(3)(4)(i)] | No premium shall be charged for fungible FSI compensatory area admissible as per DCR 31(3) for construction of staff quarters of MCGM & State Government. |
|
| (d)Premium waiver on Staircase, Lift & Lift Lobby (State Government/MCGM already exempted) [EP74- DCPR 33(3)(4)(ii)] | No premium shall be payable for stair case, lift and lift lobby for the construction of staff quarters of MCGM & State Government. | |
| (e)Premium waiver on entire Saleable portion in respect of additional FSI, Staircase, Lift & Lift Lobby AND Fungible Compensatory Area | The saleable part is integral to the project wherein, it is the only source to recover the construction of Govt. use portion. Imposing charges on Saleable rules out the viability of project in entirety. | |
| 2. | We need permissible FSI to be reckoned on Gross Plot Area [EP56- DCPR 30(A) 2] for entire project while the clause uses the term only plot area. (Gross term struck off) | For staff quarters, FSI is categorically permitted on gross plot area [DCPR 33(3)(A)] but for govt. offices no express exemption is indicated. |
| 3. | Exemption from Development cess @ 7% of land rate of BUA beyond basic zonal FSI over and above the development charges [EP74- DCPR 33(3)(A)3] | The Development Cess is imposed in addition to the Development charges levied u/s 124 of MR&TP Act, 1966. The said MRTP Act exempts the central govt from paying any development charges. On the same line, exemption from Development cess should also be accorded. |
| 4. | Reserve Space Issues | |
| (a) Doing away with EOS in F/N41 & F/N 42 | (a) In fact, there has never been any park or playground (EOS) as such on site. It appears EOS has been earmarked wrongly. After giving up land for DP Road, Eastern Freeway and abandoned CRZ-II & High tension transmission Area, abundant of open space already exists on the land. Any further open space obligations will only unsettle the project. | |
| (b) Not to insist handing over Amenity Open Space (AOS) to MCGM. | (b) AOS has been factored in the layout as 10% of usable land. However, Amenity (School +Hospital) is being built up by ourselves at own cost. | |
| (c) Relocating of ROS, F/N 68 to the places, we have not planned to build anything over. | (c) Relocation can be done over CRZ II area (1.5 acre), High tension Transmission Lines (2.5 acres) where we do not plan anything to build over. (Important to note that We are also providing extra space for POS) | |
| 5. | Vetting of assumptions factored into our project for sale of up to 1/3rd of Office/Commercial space for cost recovery on the similar lines with provisions of [EP74- DCPR 33(3)(A)2(ii)] that provides for 1/3rd sale of Residential Space. | The DCPR provisions do not prevent 1/3rd sale of office/commercial space but is silent on the above. In view of keeping up the viability of this self-sustained government project, on the similar lines with provisions for residential spaces, our layout has conservatively provisioned for 1/3rd sale of office/commercial space also. |
2. Background of the Concerns & Current Meeting with CS
(1) Since beginning, we have been requesting from the state for complete waiver of any premium/charges that could unsettle our project on account of cost escalation. Premium on additional FSI, Lift, Lift lobby & Staircase FSI, Compensatory fungible FSI & Development Cess under the table above were some of the most pronounced factors responsible for cost escalation.
(2) These are the concerns, for which we started pursuing with state since 5.06.2018 when we were intimated by NBCC that a Rs. 793cr escalation would be the implications in view of EP provisions introduced and the term central govt having been eliminated from many clauses providing exemptions to us earlier.
(3) Naturally, instant idea was that central govt. must not be treated differently from state and MCGM in the matter of levying and collection of taxes on central govt property. So, we started with writing to the CS on 05.06.2018 (Chief Commissioner’s Letter) on the issue citing the Constitutional provisions and SC rulings.
(4) Later, during meeting of Pr. Commissioner (G) with PS, UD-I, Sh. Nitin Kareen and our several rounds of meet at lower rung we were given to understand that, Govt. portion would most likely be exempted from premiums but the saleable part of the project would be subjected to premium and other charges as applicable for other stakeholders.
(5) In the meantime, the NBCC communicated us dated 23.07.2018, the three most likely scenarios of cost escalations of Rs.700cr. Rs 1400cr & 1900cr which, actually emphasized the waiver or non-waiver of premium/charges on Govt use AND saleable portion under different combinations of itemized heads.
(6) It turns out, that even if the govt use portion is completely waived from premium because of the chargeable heads remaining applicable for saleable part, cost escalation still goes to Rs.1400cr. This was to amount double financial whammy for a project already riddled with uncertainty of fund mobilization due to RERA.
(7) So, after we were heard in person by Deputy Director Town Planning (DDTP) on 27.07.2018, got a clue from the interactions that we being integral to govt. could also go for asking the state for a complete waiver on both portions of the project AND even requesting for issuance of exclusive notification in respect of our Enclave Project, Wadala. Post the hearing with DDTP we wrote afresh to the Town Planning for a complete waiver of charges on entire project. This was the moment we started pursuing the state with comprehensive waivers.
(8) Pr. Commissioner had one subsequent meeting on 13.08.2018 with PS, UD-I, wherein also, it was assured that maximum possible exemptions for the project was being worked out at their end but nothing candid could be projected on the day. More clarity from their part was assured by the end of Aug. 2018, However nothing is heard as yet.
(9) Just before a meeting of DGHRD, with CC, PC, core CEC team & PPP Expert on 10.08.2018 a letter to DGHRD, Delhi, was sent detailing the entire issue likely to cripple the project. The said letter also attached with it a draft letter from FS to CS, govt. of Maharashtra wherein, the FS was to request the CS for an exclusive notification so that maximum waivers can be extended to make the project viable.
(10) The FS, Govt of India wrote a letter dated 27.08.2018 to the CS, Govt. of Maharashtra almost entirely on the same line as outlined in our draft letter prepared for him. Based on the FS letter dated 27.08.2018 the team pursued with CS office to get a meeting fixed with CS. The Proposed meeting with CS on 6.09.2018 is based on an Internal communication from CS office to PS, UD-I dated 30.08.2018.
3. Points on Arguable Submissions
(A)Why the Central govt. shouldn’t be asked to pay premium on so called commercial side of the Wadala project:
1. The so-called commercial component is not commercial in so far as the saleable component is the only source to fund this central govt project. Any exemption extended would be meant solely for the land owner i.e, govt. of India and their own project. Office Cum Residential Complex project of Wadala Enclave is a self-sustainable model, wherein 2/3rd of the project (Govt use portion) has to be funded by sale of 1/3rd of entire Built Up Area (Saleable Portion). The so-called commercial part of the project is not commercial in strict sense and the same has also been held by the Finance Secretary letter dated 27.08.2018. (Para:3).
2. As a matter of fact, the existence of Office cum Residential Project undertaken by Customs department is entirely dependent on the existence of saleable part of the entire project. The co-existence of both the portion is the essence of this project. In case of profit if any, will go to Consolidate Fund of India, out of which even states get share as per reports of Finance Commission. The Consultancy for construction is also in the hands of NBCC, a Central Govt PSU, So, the interest of govt. is also safeguarded by an authorized govt. agency.
3. Maintaining parity of central govt. with state Govt. and MCGM, the local body, in the matter of levying and collection of taxes on properties of central govt. would be in the spirit of Article 285(1) of Indian Constitution and several rulings of Hon’ble Supreme Court in the matter.
Section 285(1) of the Constitution of India is reproduced as under:
“The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State.”
NOTE: The Hon’ble Supreme Court in the case of Vadodara Municipal Corporation vs Union of India (C.A 6706 of 2004) has held that distinction between States and Union Government cannot be made in matters for payment of property taxes/ premium / service charge etc. and exemptions/ concessions granted to properties belonging to State government shall apply to properties of Union of India (P-11(V) of the order refers). The same has also been further clarified by the Ministry of Urban Affairs and Poverty Alleviation to the effect of parity being maintained between the Union and State Govts. (ref. F.No. N-11025/26/2003-UCD dated 17.12.2009 clause 5)
4. Customs department has handed over almost 11 acres of land to the State for construction of Anik Wadala Road and Eastern Freeway. Originally, the department had 56 acres of land who after parting with the 11 acres, is left only with 45 acres of land in possession. No compensation so far has been received by the Customs department in lieu of the parcel of land surrendered for the state’s cause.
5. In our Project at Wadala Enclave plot, staff quarters of the multiple central govt. departments viz. Customs, CGST, Income tax, ED are proposed to be housed in the premises. All these departments are entrusted with the primary sovereign responsibility of a “nation-state” including tax collection and preventing money laundering etc. These government organizations are paramount to nation’s growth and development. Extending waiver of premium on additional FSI, Fungible compensatory area, Staircase, Lift & Lift Lobby for construction of their project is quite reasonable. In absence of the waivers the project’s viability will be adversely impacted for, the project being a self-financed one.
6. The project is not incurring any expenses on Govt. coffers. Instead, the project after being functional is going to save Rs.253 Cr of rent for Central Govt. as per current rates (Rs.185cr. IT + Rs 68 cr. Customs & CGST). This all solely depends upon the viability and successful completion of the project. Funding is entirely dependent on the booking proceeds of saleable unit and every single penny is being generated from the scratch. Integrated Finance Unit (IFU) has in principle granted the approval after scrutinizing viability that never accounted for premiums proposed under new DP.
(B)Can State think of issuing Exclusive notification for granting exemptions to Our project?
7. The State has been extremely sensible to granting special exemption to the housing and office needs of govt officials from time to time. Recently, State Govt. has granted a number of relaxations for integrated township (spanning over 145 acre) at Khalapur’s Wayal meant for police department of the State. Considering housing and office woos for Central Government officials too, state may like to extend similar relaxations to this project meant for central govt officials.
8. For development & redevelopment of land/Building of Department of Police, Police Housing Corporation state etc. special exemptions are there under table no. 17 of Schedule A of Maharashtra Regional & Town Planning Act, 1966. State can consider extending similar support to Customs Enclave Wadala project (http://nwcmc.gov.in/files/tp/D%20class%20Final%2019-11-15…..pdf )
9. State has also been kind enough in processing the waiver of property taxes on buildings made by Maharashtra State Police Housing and Welfare Corporation Limited (MSPHWCL). This is another generous move by the state to empathize with the housing and office worries of govt. officials.
10. The state govt. is going to receive Revenue by way of stamp duty and registration charges from the buyers of the saleable units of residences and offices. Hence, facilitating this project to come into existence by exclusive notification is still going to benefit the state. This mega project likely to span over 7-8 years has a potential of generating local employment also apart from benefitting the state directly in terms of stamp duty etc. In fact, the Wadala Enclave Project should be viewed in the larger public interest.
11. Continuous monitoring of the project by Finance Secretary amounts to his larger view on resolving the housing and office space issues for the major departments playing vital to the country’s growth. The Finance Secretary, GOI has also made a point in his letter dated 27.08.2018 to the Chief Secretary, Govt of Maharashtra and requested thereby to issue exclusive notification in order to make the project viable.
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# Clarifications:
Our initial correspondences with state used the term ‘Govt office space’ & ‘Govt Staff Residence’ while seeking waiver of premium (As seen in the table point 1& 2). It was just meant for highlighting our concerns towards the discriminatory provisions introduced into EP part for central govt. But in reality, we have always been contesting against any premium/charges proposed to be levied vide new regulations. It was however at a later stage, when we were given to understand that the state can differentiate the entire project into Govt. use portion & Saleable portion and accordingly NBCC too started factoring the escalations.
#Teams’s View
During meeting with the Chief Secretary, Govt of Maharashtra, focus should be on securing exclusive notification for the project. The same has been pointed in the letter dated 27.08.2018 by the Finance Secretary also. Relaxations in piecemeal may not suffice our needs and presumably, complexity on the part of the state will also be manifold. The piecemeal exemptions under different provisions of DP can lead to raising of claims by several other stakeholders.
#Development Plan for Greater Mumbai
Earlier Development Plan (DP-1991, based on DCR-1991) was in force, since 1991 and was to come to end on June 22nd 2018 which actually ceased existing on Aug 31st 2018.
The new Development Plan is commonly termed as DP which basically doesn’t convey the true meaning of DP-2034. Moreover, it is also interchangeably termed as DCPR-2034 which is again only the framework regulation backing the new Development Plan. In fact, DP-2034 has two parts: the Regulation part ie, DCPR-2034 and the Development Layout of city. The DCPR further, has two parts: the Sanctioned part and Excluded part i.e, EP.
In reality, the DP stands for development layout of city and obviously, it is the mapping part of entire DP-2034, that contains pictorial representation of proposed layout of city containing different city zones, different colour schemes for Greenery, Roads, Reserved Open Spaces, Existing Open Spaces etc.
The Sanctioned Plan (DP) of DCPR-2034 was to come into effect from June 23rd 2018 but was kept in abeyance for suggestions and objections on EP part. The EP part was in fact, the new changes introduced by State Govt and Town Planning post approval of Draft DP from MCGM. Since the EP changed the character of the draft DP-2034 as sanctioned by the BMC general body, the Regional Town Planning later felt it necessary, that the government should have invited suggestions and objections from the public.
Now, the DP part of DCPR-2034 has come into force since Sept 1st 2018. The EP part however, will still take some time in getting notified for Implementation.
The Development Control and Promotion Regulations- 2034 (DCPR-2034), has 70 regulations. Based on the inputs from the development specialists, the government made 165 changes called as Excluded Plan (EP).
For sake of convenience, below given is the link for draft DCPR-2034 notified on May, 8th 2018 that contains both DP part and EP part.
https://www.maharashtra.gov.in/site/Upload/Acts%20Rules/Marathi/uig7uyyhjk.pdf
#Important Terminology:
DCPR .. Development Control & Promotion Rules
DP … Development Plan
(Most of the time both terms are used inter-changeably, the DP however is construed as the map for entire town having different colour codes for area and earmarked amenities. In other words, DP is envisaged design part of the development)
ASR … Annual Statement/ Schedule of Rates
ROS –Reserved Open Space
EOS- Existing Open Space
AOS- Amenity Open Space
#Disclaimer on Arguable Submissions:
1) This is not prepared with a view to communicate to the state authorities as is. It is purely intended to support our thought process during discussion with state authorities. The contents are curated from different sources majorly inspired by one informal communication from Sh. B. Bhattacharya, DGHRD and team’s interactions with higher ups at different points of time.
2)The arguable submissions especially part (B) does not have a legal backing amounting to our rights. However, the team feels there is no harm in expecting a generous gesture from state in the larger interest of this long pending ambitious project. This part is purely intended for informal discussions with top echelons of state wherever required.
3) Para (3) of arguable submissions part(A) empowers us legally to prevent us from being treated discriminately by state. This, including other paras of part (A) in some or other form has made parts of our communications to the state many times.
4) There could be many shortcomings in the content and the team’s intention behind making of the content is only to trigger more ingenuity in bringing our concern across the state during discussions/meeting.