FILLIP TO REVENUE?

MUMBAI: The Brihanmumbai Municipal Corporation’s (BMC) general body on Wednesday cleared a policy of renewal of leases of plots it owns in the city. This long-pending decision is expected to provide relief to nearly 293 lease plot holders whose leases have expired. Once the leases are renewed, this may pave the way for redevelopment of prime residential colonies in the island city, including the Hindu and Parsi colonies in Dadar.

As of now, the BMC charges these plots 1% of the ready reckoner rate as lease rent. The civic body stopped renewing the leases of these plots after a range of breaches (including illegal construction) were discovered. In cases of properties that have violated the terms of the lease, plot holders will have to regularise them within three years in order to get their leases renewed, as per the new policy.

The policy has not yet spelt out the premium that will be charged to regularise the breaches.

There are 4,177 properties in Mumbai that were given by the

BMC on lease from 10 years to 999 years, and are covered by this policy. The policy particularly impacts 293 prime properties in the city that have not been able to renew expired leases due to breaches. The civic body expects to get ₹100-150 crores if these properties opt for redevelopment and ₹86 crores as rent per year. Officials also said ₹200 crores as arrears would be received after the policy is sanctioned.

If plot holders fail to regularise the breaches or remove the illegalities associated with their plots, the BMC is authorised to reclaim them.

A senior official said, “This is bound to happen as these properties were given on lease for hundreds of years. In absence of such a policy to regularise breaches, several redevelopment of such plots were stranded. With this policy, it will be easier for plot holders who want to redevelop, to come forward and regularise the violations.”

Meanwhile, the BMC’S general body also sanctioned another important policy, which is expected to boost the civic body’s revenue. The vacant-land tenancy (VLT) policy proposes taking a one-time lump sum from plots that were leased out at nominal rates since pre-independence to individuals in order to keep the plots from being encroached upon.

According to a senior official, the original terms included a condition that allows the BMC to reclaim the plots at any point.

Now, approximately 213 plots will be leased for 30 years, for a one-time premium that plot holders or interested parties would have to pay.

The premium has been calculated as 62.5% of the ready reckoner rate for the plot. The BMC expects a revenue of around ₹500 crores from this policy.

Explaining the VLT policy, an official said, “Currently, these plots have residential as well as commercial structures on them. If the BMC acquires any of these plots with residential structures, they can go under redevelopment and the civic body will get a public amenity in return.”