Review decision will hurt realty sector: Devendra Fadnavis

Mumbai,Sudhir Suryawanshi (DNA): Chief minister Devendra Fadnavis’ decision to review all major property development projects cleared during the last four to six months of the previous government has put the sector in a fix. Big projects will run into major cost overruns and the sector itself will be in a state of suspense for three or four months now according to realty experts.

Review decision will hurt realty sector: Devendra Fadnavis

Why are these development projects being reviewed?
The BJP government is taking cognisance of the charge levelled by the former irrigation minister Ajit Pawar that Rs12,000 crore worth of projects were cleared in a hurry during the last months of his tenure by then chief minister Pritviraj Chavan without due diligence. Fadnavis wants to see if procedures were followed.

What did the previous government do?
Though the actual value of projects cleared is unknown, a slew of major cluster development projects, most of it in Mumbai, were cleared during the last few months. Ajit Pawar was hinting at corruption when he made the allegation against his own chief minister.

What does Chavan have to say?
Chavan told dna that the new government has every right to review any decision taken by his government. “I have no objections to them reviewing the decisions taken be me. I have not done anything wrong. If the cost of the projects increases by this move, then the incumbent government has to think over it,” Chavan added.

What is a cluster development project?
A developer with minimum of 4,000 sq meters of land can present plans for cluster development which will include all amenities. The government will then allot a Floor Space Index of 4 which means four times the land area can be build as towers or sky scrapers.

Why are developers upset?
For developers who have raised debt to go ahead with projects already cleared this review will mean huge losses. Kailash Agarwal, chairman of Avighna Developers which is doing a cluster project in South Mumbai says, “Cluster development policy will be most affected by the review decisions. There are only couple of cluster developments projects which have been successfully executed since the inceptions of the scheme in 2009. The review will result in three months delay and escalate the cost many fold,” Agarwal added. Other developers feel they will now have to pay bribes the second time for the same project.
Sunil Mantri, president of National Real Estate Development Council said the new chief minister can review the previous government decisions but it should be done “speedily and with good intention”. Atul Nemade, realty expert said this move will bring the already suffering real estate sector to a grinding halt.