Mumbai: Builders furious as 500 projects stuck sans eco clearance

Leading Mumbai builders are seeing red over the unending delay in securing the crucial environmental clearance needed to commence their projects. Already under the pump with declining sales, a rising pile of unsold inventory and a growing debt burden, the harried developers claim that there is a pile of approx 500 residential projects that are simply gathering dust somewhere along the long winding corridors of Mantralaya.

According to them this apparent callous attitude by the state government is akin to holding the development of Mumbai at ransom and has virtually brought to a standstill a slew of under-development projects spread across the city and its peripheral areas.

While the developers' ire appears justified, what is not is the government's response for this apparent delay. According to sources in the government, it appears that the files have not been cleared because, hold your breath, there has not been single environment clearance committee meeting held since April 2015.

Taking this apathy a notch higher has been the state's environment minister Ramdas Kadam who has alleged that the meetings were cancelled ostensibly to prove that members of the clearance committee were in cahoots with the developer lobby. Apparently the minister concerned is trying very hard to stop this malpractice and has promised that the meetings will reconvene soon as will the clearing of realty projects.

The  minister further added that as per the 2010 environment department circular, the state had the right to reject, submit and prioritise proposals and he had ordered the cancellation of the meetings pending clarity after the committee 'hijacked' the state's authority and began functioning as per their 'whims and fancies'.

Interestingly, the said committees have been constituted by the central government and as such are supposed to function independently, wherein any projects submitted for the environmental clearance are accepted on a first-come-first-served basis.

The issue has now raised serious doubts about the efficacy of the new BJP-led state government among the city's influential developer community who feel that there is an obvious lack of clarity on a range of key issues and the much-anticipated simplification of complicated realty approval procedures had still not happened even after almost six months in power.

"We were expecting a lot of positive changes by the new government with regard to the realty industry, which has unfortunately not come about," stated a builder on the condition of anonymity. "With the market already on a downward spiral and sales not picking up, we hope the government shows a little more empathy to our situation and help the industry to recover."

Real estate industry is witnessing a huge slowdown from last few years due to sky-rocketing property prices and high interest rates. The sluggish property market, particularly the residential housing segment, has resulted in an acute liquidity crunch to developers and added a significant delay of approx 6-7 years in completion of projects.

According to industry estimates, the sale of residential units fell to approx 1.75 units in the primary markets of the seven major cities in 2014, as compared to about 2 lakh units in the preceding year.