January 03, 2008

life in financial markets: (part 1) how companies manipulate government authorities

(part 2 of this post dated December 25, 2011, is over here --> http://natant.blogspot.com/2011/12/life-in-financial-markets-part-2-how.html)

Below is a classic example of how Bombay's construction companies and local government authorities including municipal corporation and state government departments get together to twist rules to benefit the builders and enable kickbacks to politicians, bureaucrats and government officers.

This case is about Hiranandani Builders.

Here it is:

Date: Sun, 30 Dec 2007 20:27:02 -0800 (PST)

From: medha@narmada.org
Reply-To: narmadaandolan@lists.riseup.net
Subject: [narmada_andolan] Land@40paise/acre in Mumbai for Builders!!!
To: narmadaandolan@lists.riseup.net

National Alliance of People's Movements
28, 'A' wing, 1st Floor, Haji Habib Building, Naigaon Cross Road
Dadar (East), Mumbai – 400014 E-mail: mumbainapm@gmail.com

Mumbai Update

- Land doled out for luxury & profits, violates law & deprives others.
- Slum dwellers deposit Rs 2000 with Chief Minister demanding lease of land as against builders paying 40 paise/acre, challenging unjustifiable low lease rent for builders.
- Hiranadani Gardens case needs an enquiry and action

Mumbai, the financial capital houses 60% of its population, contained on less than 15% of the total land-base of the city, in slums that are inhabitable. The proliferation of slums has always been considered as an activity of 'encroachment' over public land and never an act resultant of misplaced policies and priorities. The disparity and discrimination has been exposed time and again by all those who have been associated and committed to the rights of the underprivileged who are the hard working but exploited and discriminated.

The encroachments by the influential, operating as nexus which includes builders-politicians-bureaucrats are not only ignored, but are formalized and legalized. The most shocking in this regard is the case of Hiranandani Gardens, where land to the tune of 230 acres was handed over to private land holders/developers on an 80 year lease at the abysmal rate of 40 paise per acre. In order to make this possible, laws and rules were twisted, misquoted and violated to incur pecuniary benefits to the private parties but at the cost of public resources. On one hand the 10 by 10 ft houses of the poor are bull dozed under the pretext, these being encroachment on public lands, illegal possession of land holders over more than 30,000 acres of land has been formalized by the repeal of Urban Land Ceiling Act. The case of Hiranandani Gardens is one such case in this series of violations and manipulations engaged in by the State to benefit the few while ignoring the working class of Mumbai city.

In 1977, with the avowed purpose of meeting the large housing deficit, an Area Housing Scheme termed as Powai Housing Development Scheme, was formulated for the lands situated in the villages of Powai, Kopri and Tirandaz spread over 140 hectares of land. Out of these 70.85 acres was laid for residential which included housing for economic weaker sections as well as Lower & Middle Income Groups. The scheme was estimated to cost Rs. 181.75 lacs and was to be carried out by the then 'Bombay Metropolitan Regional Development Authority. The Authority confirmed that with inflows and outflows assessment, the required amount could be made available.

In June 1979 the said Scheme was approved by the state government through Urban Development Department. Thereafter BMRDA resolved that the "financial position of BMRDA does not enable to spend such a large amount for acquisition nor is it possible for Government to assure any regular flow of funds for such purposes". Therefore it was agreed upon to favor and approve the proposal of the present land owners to allow them to continue hold the land even though above the ceiling limit under the Urban Land Ceiling Act.

Thus a tripartite agreement was entered on 19th November, 1986 by the BMRDA, the State Government with Urban Development Department and 19 land holders with Varma and sharma families and Mr. N. Hiranandani as a power of attorney. The agreement provided for exemptions from the provisions of Urban Land Ceiling Act and handing over of the land on a lease of 80 years at the rate of 40 paise per acre. In return the leasers including the sub-lease were bound to undertake the development of the lands as per the provisions of the Powai Area Development Scheme. This was to consist of construction of flats/apartments 50% of which were not to exceed the size of 40 sq.meters and the rest 50% not exceeding 80 sq. meters. Further within a period of 10 years they were to develop the infrastructure including water mains, sewers, storm water drains, roads, open spaces for the schools, parks, service industry, hospitals etc and hand over to the Municipal Corporation of Mumbai. In addition flats/apartments equivalent to 15% of the FSI consumed by the land holders was to be handed over to State Government a t the rate of Rs 135 per sq. meter.

This agreement was entered into, with special provisions and exemptions for the land holders when there was a set of guidelines in existence, known as GR of 22 August 1986 which provided for the houses for the economically weaker section. Later on none less than Secretary, UDD had raised objections to the Scheme and mentioned that "UDD is opposed to entering into any more agreement other than in accordance with the provisions of GR of 22 August 1986". But these valid objections of Shri D.T Joseph were ignored and by passed.

But what is clear that as per the provisions of the agreement the lease as well as sub-lease were obliged to construct houses within the limits of 40 sq. meters to maximum of 80 sq. meters. It is a known fact that Hiranandani Gardens, as it stands today consists of 42 residential and 23 commercial buildings with no flat less than the size of 1800 sq. ft, which exceeds up to 4925 sq. ft as per the information available on their website and brochures issued by the same. Further the price quoted by them for a flat of the area 2125 sq. ft is in tune of 4 crores!

This gross violation of law has not just brought in huge profits but deprived the poor of their right to land (The dis-housed and the slum dwellers). On demanding that the Chief Minister and the Government of Maharashtra should also lease out land to the co – operatives of the poor similarly even if at a rent, 100 times higher, Mr Hiranadani has stated before a journalist that he is not the only one; there are others too who have benefited the same way! Awful are the decisions of the state which go as legitimate in the name of policy and planning. It is indeed manipulation of resources by a few which leave millions destitute encroachers!

NAPM will continue to fight for every citizen's right to housing and Life!

- Simpreet Singh, Medha Patkar

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