Write up On Wadala Project for VC dtd. 08.01.19 Updated

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  1. The Customs Department, Mumbai owns a plot of land measuring about 55.85 Acres (approximately226000*SQM), situated at C. S. No. 146 at Wadala (E), Mumbai. Having given up almost 11.53 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 as on date. Earlier, the entire land came under salt pan area which stood eligible for construction of Warehouses only. Later, through state govt notifications, the land was notified for mix use constructions (Warehouse & Residential) and through subsequent notification for residential use 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  (F/A’) 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.

Initial Proposal of Wadala Project (Before 23.10.2018)

  1. With all these USP’s of the land in place, Customs Department of Mumbai proposed to build: (1) Office Complexes equipped with the state of the art facilities for modern office building and (2) Residential-cum-Sports Complex both on self sustaining basis for the department of Customs, CGST, Income Tax and Enforcement Directorate and officials thereof. Apart from this, a Kendriya Vidyalaya School upto 12thstd. and a Hospital were also going to form the part of the project. The integrated township aimed to address Office Space needs and Housing crunch of all the departments and officials thereof, under ministry of finance having establishments in Mumbai. The enormity and sophistication of the project was to enable it outstand from all the central govt. projects on Office Complexes & Housing across the country. Funding of the project was proposed to be recovered from the sale proceeds of 1/3rd of entire built up space of Project in the open market.
  2. Building office complexes and residential quarters on the Customs Enclave plot has been a long pending and ambitious project for the department and has seen a couple of roll backs in the past, sometimes because of funding issues and other times because of certain other technicalities involved. CPWD too, was once entrusted with carrying out the project in the past but amid certain roadblocks and limitations at their end they had to retract from the project. However, with NBCC having to its credit a number of govt. projects built on self sustainable models in and around NCR, Delhi, the ministry appointed them as PMC (Project Management Consultant) in the year 2017 to take up our project. It was envisioned that on completion of the project, the infrastructure in place, would save approx Rs 253 Cr. of office rent (based on current rate) to the central govt apart from solving the housing woes of Central govt employees in Mumbai working under Finance ministry.
  3. A consolidated residential requirement of CBIC, CBDT and ED was compiled wherein, the net residential requirement of CBIC, CBDT and ED was worked out to 3228 staff quarters with a total area of 313806 SQM while, the total office requirements was worked out to 162500 SQM. A Detailed Project Report (DPR) dtd. 31.08.2018 was submitted by NBCC on 05.09.2018 (Prior to this, they had submitted a DPR in June 2018 also which was observed having some essentials missing therein). The layout proposed vide said DPR is featured at(F/B’). The Main features of DPR comprised of following:

(i) Land Portion-1, having area 24 acres would erect a 50 storey Office Tower A for Customs, CGST and Directorates. This apart, 3228 units of govt. quarters (type II- VIII) covered within 12 blocks with a mix of 43 & 45 storey buildings and Community facilities spanning 5750 SQM would also stand on this portion of land.

(ii) Land Portion-2, having area of 3 Acres would allow erecting a 50 storey Commercial Tower, for sale in the open market.

(iii) Land Portion-3, having an area of 18 Acres would house a 50 storey Office Tower B for offices of CBDT and ED. This portion of land would also house 1980 flats of 2/2.5/3 BHK for sale in open market covered within 6 blocks of 45 storey building each. A School upto 12th std. and a Hospital of 200 beds would also come up over this portion of land.

(iv) The enumerations above was having saleable elements to the extent of 1/3rd of entire permissible FSI in the form of Residential quarters and Commercial offices to recover the cost of the construction of Office Complex and Residential quarters for the staff of CBIC, CBDT and ED.  In order to fall through the norms of New Development Plan of the city, the govt use FSI had to be 2/3rd of permissible FSI available land in respect of land. In other words, Govt use Residences & Offices would bear a 2:1 FSI ratio with Saleable Residences & Offices together. Distribution of FSI under different heads was as below:

(i) Commercial Tower for sale having a covered area of 1,21,472 SQM.

(ii) Residential buildings for sale having covered area of 2,06,246 SQM.

(iii) Office Tower A having a covered area of 1,63,840 SQM

(iv) Office Tower B having a covered area of 96,160 SQM

(v) Staff Residences having a covered area of 4,06,004 SQM

Summary: 1 to 5 total 993722SQM, 1&2 Sale Component = 327718SQM, 3 to 5 Govt Use Component = 666004SQM. Thus, roughly the govt use portion was 2/3rd and saleable portion was 1/3rd of entire FSI summed up from 1 to 5.

(v) School and Hospitals were supposed to use 22,000 SQM & 20,000 SQM of FSI respectively, totalling to 42,000 SQM. This had nothing to do with 2/3rd and 1/3rd norms, meaning this was accounting for separate provisions and norms. These public amenities had to find place mandatorily within AOS (Amenity Open Space) under DP norms. The AOS had to be earmarked 10% of our entire ground space and no construction other than public utility could be built upon the said earmarked space. This 10% was further equally divided into two types: ROS (Reserved Open Space- for amenities to be built by local govt. as decided by them) & POS (Public Open Space- to be kept open for public use).  This only implied that any construction Saleable or of Govt use had to be planned after carving out 10% from 45 acres of usable land for AOS. The same had been accounted for, within layout of Detailed Project Report (DPR). A little variation though, from the norms in respect of AOS was that layout of our project, proposed constructing a School and hospital at our own expenses and not leaving up to state in deciding the type of Public Amenity. Since, the project layout was supposed to do significant savings for the state along with compliance of 10% AOS, Mumbai Customs department as project owner was pursuing the state for some relaxation viz. (i) Doing away with EOS supposedly wrongly marked on map of land & (ii) Ruling out hand over of ROS land to MCGM for developing amenities as per their suitability.

  1. The New Development Plan, DP 2034 was notified by the Government of Maharashtra in May 2018 though come into force from 01.09.2018. On scrutiny of the draft DP 2034 it was seen that our project seemed subjected to certain new premiums and charges that was going to escalate the project cost anywhere between Rs. 700 Cr. to 2400 Cr. over and above the Main project cost of 8339 Cr. Our feasibility report was based on the pre existing DP of city, where no such charges were applicable to central govt. projects. Moreover, the project being a self-sustainable, was anticipated facing with uncertainty of quantum of sale proceeds and escalations in the project cost due to inflation. The premium imposed through new DP and potential inflation could unsettle our project. It was thus, felt that certain exemptions were required to be secured from State Government for enabling the project to take off and subsequent completion. The department started pursuing the state since November. 2017 for exemptions from premium on additional FSI, fungible, Staircase, lift and lift lobby apart from Development Cess and Development Charges. Additionally, accounting of ‘gross’ area for eligible calculation of FSI and seeking express permission to sale 1/3rdof commercial space was the department’s concern.
  2. Several communications with State authorities viz. Chief Secretary, Govt. of Maharashtra, Pr. Secretary, UD-I, Govt. of Maharashtra,  Commissioner MCGM, Deputy Director (Development Plan), Town Planning, including meeting with Chief Minister, Maharashtra formed our efforts to secure requisite exemptions for this project. As per estimations made by NBCC, the Project Management Consultant (PMC) of the project, the exemptions so sought, were a necessity to make the project viable and then only implementation could be done successfully. Higher authorities from the department also met the top state authorities in pursuit of securing the required exemptions/ waivers.  However, vide Govt. of Maharashtra letter dated 23.10.2018 (F/’C’), it was intimated that premiums requested could not be waived by the state.
  3. The last DPR dated 31.08.2018 provided by the NBCC was fulfilling the missing essentials and incorporated  vital aspects suggested by PPP expert Sh. Ajay Saxena, PPP Expert and same concurred by the building committee. The DPR however, was based on certain assumption that our project being a central govt project would be extended at least few of the exemptions and escalation was worked out to Rs. 1400cr. Post denial the premium waiver by the state however led the entire escalation to go upwards of Rs.2200 cr.  (F/‘D’). Consultations with NBCC and rounds of deliberations with authorities, the Building Committee reached to a consensus that, project had gone unviable in the instance of Rs.2200cr escalation over the main cost of Rs. 8339cr. estimated originally.

FSI 2.07 Proposal of  Project after Denial of Premium Waiver

  1. The Enclave team in consultation with Project Consultant NBCC and architect ARCOP worked out certain figures on FSI that could be used to cater to the need of CBIC, without paying any premium to the state. The New figures scaled down to 3,25,226 SQM of FSI. This free FSI available to us is in fact sum total of 157087.80×1.33 and 46678×2.5. where, 157087.80SQM is net available land, 1.33 is zonal FSI multiplier, 46678SQM is land lost towards roads and 2.5 is setback multiplier provisioned in the City Development Plan (DP).
  2. The office communicated to DGHRD the letter dated 23.10.2018 from Govt. of Maharashtra, about the denial of waiver and teams workout for free FSI proposal which was forthwith responded vide a letter dated 24.10.2018 intimating that DG had scheduled a meeting with Finance Secretary on 29.10.2018 to discuss the project proposal based on free FSI available. It was requested vide the said letter from DGHRD to take up the matter with NBCC asking them to prepare feasibility report so that same could be placed before Finance Secretary in the scheduled meeting.
  3. The feasibility report and DPR as received from NBCC was produced by the Chief Commissioner and DGHRD to the Finance Secretary in the meeting dtd. 29.10.2018. A comparative study of the revised proposal v/s initial project is placed opposite as ( F/E’) and the scheme of project was technically termed as FSI2.07.
  4. The proposal FSI 2.07 was also a self sustainable model wherein funding was to be done by selling 108012 SQM Built up Residential space to fund a CBIC office tower measuring 53588 SQM and 1195 staff residence quarters measuring 164021 SQM. The proceeds estimated from sale of built up space was Rs. 2778.68 (rounded 2779) Crorewhere as  project cost was estimated to Rs.2767.64 (rounded to 2768 ) Crore giving rise a surplus of 11 Cr. (rounded). The FSI redistribution among the different components is as per (F/F).
  5. At a later stage, it was however observed by DGHRD that undue open space of our land was being consumed for constructing sale residences and the department might loose the prospective expansion of the project under the proposition. Further, in the meeting dtd. 10.12.2018 chaired by Commissioner (Gen), the PPP expert, NBCC and DP professional raised apprehensions that mode of funding of the project has to be revisited on account of several market conditions and the compliances obligatory to the department as project owner. In fact, it was understood that the project consultant could not give a realistic phasing and scheduling of the project under built up sale model wherein, every penny of fund is supposed to come by booking of built up spaces.

Reworked initial proposal of the project

  1. To discuss the anticipated hurdles with FSI 2.07 proposition, different modalities of funding and respective proposals of the project, a meeting was convened by the Revenue Secretary on 26.12.2018 which was attended by Pr. Chief Commissioner, Zone-I, DGHRD, and the officials of project consultant viz. NBCC and ARCOP. The Revenue Secretary was of the opinion that the department should go with initial elaborate proposal using FSI 4/5 and the project consultants should work out afresh so as to negate the viability gap because of which the initial mega proposal was dropped.  The ARCOP officials have exuded considerable optimism of being able to negate the viability gap by doing certain workout once over again and assured that the earlier elaborate plan that envisioned constructing office -cum- residential complex for CBDT, CBIC and ED would be made viable.
  2. Accordingly, the project consultant NBCC and the Architecture consultant ARCOP are working out all possible permutations and combinations however, finalized blue print is awaited.
  3. Although, formalized blueprint of freshly worked out proposal is not yet received, it is learnt through telephonic communications that Commercial saleable portion is being extended to an extent so that, premium payable to the state govt. is actualized through the increased sale proceeds and the land would be able to use maximum permissible FSI of 4/5.

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( *Actual Area  physically found during land station survey conducted  by NBCC is 54.65 acres and accordingly net usable for the project comes around 43.12 acres translating to 221220 SQM. A third party survey is under way for verification)

All Enclosures (A, B, C, D, E, F) at this Link Here!