In Mumbai, 3.5 lakh affordable homes to be funded by Canada

From Times of India

MUMBAI: The state government is finalizing a memorandum of understanding (MoU) with the Canadian government pension fund and two Mumbai developers to build over 3.5 lakh affordable homes here through the Slum Redevelopment Authority (SRA).

If approved, the two builders, Deserve Group and Radius Group, will be able to exploit prime slum plots from Cuffe Parade to Borivli with the help of the SRA, which will expedite permissions for them.

“The pension fund may invest up to $2billion (Rs 13,600crores) in the project. We are still fine-tuning some of the clauses before finalizing it,” a top government source told TOI on Friday . The developers, along with the pension fund, are expect to sign a tripartite agreement with the SRA. IL&FS has been appointed fund manager. “The two developers will have to obtain letter of intent (LOI) themselves. They will not get any preferential treatment for that. But once they receive LOI, the SRA will put them on the fast track,” the sources added.

SRA CEO Aseem Gupta said the state was awaiting confirmation from Canadian government officials. “The draft is yet to be cleared by SRA,” he said.

“The government wants to sell homes at a cheap rate of say , Rs 5,000 to Rs 6,000 a sq ft. The Canadian Pension Fund will put in money only for the construction,” said a person close to one of the developers. But government sources said the rate will be decided by SRA.

“The SRA’s role is basically to fast-track permissions. Apart from providing new tenements to slum dwellers, the developers have offered to build affordable housing in the sale component, which can be made available to people at a low rate,” said sources. The two builders can expect a windfall by exploiting portions of the slum plots to build high end residential or commercial towers, which they can sell at market rate. The SRA, through private builders, has been able to provide less than two lakh houses to slum dwellers in the past two decades as against the 40 lakh homes promised when the scheme was introduced in 1996.

The cross-subsidy scheme has been wrecked by charges of corruption, malpractices and arm-twisting of slum residents by slum lords and land mafia.
Some of the most expensive residential skyscrapers have come up on slum land. Housing experts have complained that slum residents are rehabilitated on a small portion of the plot in box sized multi-storeyed apartments while the larger chunk of the land is exploited by builders for luxury housing.

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