Building activity in Mumbai set to face slump in next few months

Some major gaps that crept up during the approval process have come to light. (File)

ON APRIL 25, when Maharashtra Chief Minister Devendra Fadnavis approved Mumbai’s new development plan (DP), his government thumped its back for clearing the mammoth plan within eight months of submission. But now, almost a month later, some major gaps that crept up during the approval process have come to light, which could potentially hit the Mumbai’s embattled construction sector adversely in the coming few months if left unresolved.

The sanctioned new DP, which will kick in from June 9, has lowered the permissible floor space index (FSI), known internationally as floor area ratio, for construction projects in the suburbs of Mumbai as compared to the current levels.

Consider this. As per the prevalent development control regulations (DCR 1991), an FSI of up to 2.5 is permissible for building in the suburbs. FSI is a development tool that defines the extent of construction permissible on a plot. It is the ratio of the built-up area to the total plot area. An FSI of 1 for building on a 10,000 square meter plot would provide a builder a construction right of 10,000 square meter. In other words, a builder developing a suburban plot can at present build up to 2.5 times the plot size.

In contrast, the new plan has lowered the same to just two times the size of the plot. While the zonal or basic FSI is the same, the extent of transferable development rights (TDR), which can be loaded additionally on the plot, has been lowered to 0.5. A TDR of up to 1 is available at present depending on the width of the road front the plot.

Even as the government has already notified its intention to modify the sanctioned development plan and restore the FSI in the suburbs up to 2.5, the proposed modification has been included in the ‘Excluded Plan’ of the development plan on which the government has to hear public objections and suggestions before implementing it. This process could take over three to six months, said officials.

On the other hand, the DCR 1991 provisions will lapse as soon as the new DP kicks in on June 9. In other words, construction projects that can now build up to 2.5 times the plot size in the suburbs, will be entitled to an FSI of 2 till the EP modification is sanctioned. “Builders won’t come apply for building proposals till the modification is sanctioned if the situation is not rectified urgently. Building industry in the suburbs could literally come to a standstill,” said a senior civic official.

While the TDR utilisation ratio is based on the width of the fronting road in the prevalent regulations, the sanctioned new plan does not link the two. Again, a modification to the sanctioned plan has been published in the EP, which would take a while before being approved.

Government officials also indicated that the formula for compensation in the form of FSI for development of public reservations on private properties on the accommodation principle is different in the prevalent plan and the sanctioned new plan. In the supposed hurry to sanction the plan at the earliest, officials admitted that contradictory versions on how FSI is to be computed on a plot have been introduced in certain sections.

While the CM remained unavailable for comment, senior officials said that the government is exploring options to rescue the situation. The most probable option being examined is the possibility restoring the existing FSI levels and the TDR conditions with the issuance of a corrigendum before the DCR 1991 lapses. While the option of keeping the sanctioned new plan in abeyance till the EP modifications are also approved is also being considered, the government is wary of facing public criticism on exercising it.

Incidentally, the EP, on the other hand, has provisions that substantially hike the FSI levels for several special projects. This include a plan to provide a high FSI of 5 for commercial developments in residential and commercial zones. The FSI for construction projects in the island city has been proposed to be hiked from 2 to 3.