The Mumbai real estate market, which is just about getting back on track after the economic slowdown, is now headed for a bigger crisis.
With the city facing acute water scarcity, the Maharashtra Chief Minister, Mr Ashok Chavan, told the winter session of the Assembly at Nagpur that no new skyscrapers will be permitted in Mumbai till the Middle Vaitarna Project is completed in 2012.
This is the largest water supply project being built to meet the city's ever-increasing demand for drinking water. However, real estate projects that have been accorded permission would be given water. The city gets about 2,900 million litres a day against a demand for 3,500 MLD.
The Government move would mean that revenues from stamp duty and development charges would take a hit. Besides, the move would also hurt the finances of developers who had invested considerable sums to acquire land and begin construction. It would also adversely impact home-buyers who had got loans to purchase property. And, in an already skewed demand-supply scenario, the Government action could further fuel demand and raise property prices as well.
Mr Sunil Mantri, President-elect, Maharashtra Chamber of Housing Industry, said it would be utter chaos if such an order were implemented. Apart from the commercial and residential projects, there were slum redevelopment projects as well. Development should not be halted and in case there was no option, one should consider total dependence on water tankers and borewells.
As it stands, 25-30 per cent of the city depended on tanker supplies. Mr Mantri said the chamber would appeal to the chief Minister to rescind the order in the larger public interest.
“We have to learn how to manage the crisis. Recycling and water harvesting could help at such times,” said Mr Abhisheck Lodha, Director, Lodha Group.
Mr Lodha said since the Government intention was to curb new constructions, residents might not require more than six-nine months' supply from alternative sources, given the construction period of around two years for projects. “In any case, a good monsoon next year could change the entire scenario,” he added.
Mr Mayur Shah, Managing Director, Marathon Group, said there was hope as the Government was working on a lot of water projects. Any impact of the proposal would be temporary and a good monsoon could change the tide.
Water storage and distribution are key issues that needed to be managed better, said Mr Anand Gupta, General Secretary, Builders' Association of India.
Mr Gupta said since the 15 per cent water cut came into force construction work in Mumbai was being done with tanker supply and borewells. However, the Government stood to lose revenue in terms of development charges and allied income associated with construction activity. It could also create financial tangles as both developer and home buyer would have availed bank loans. Moreover, it could leave thousands of construction labourers jobless after the existing projects got over.
Charging that storage and distribution were major bottlenecks in the current water supply system, Mr Gupta said the Government should look to entrust the job to private players if it is unable to manage it effectively on its own.
With the city facing acute water scarcity, the Maharashtra Chief Minister, Mr Ashok Chavan, told the winter session of the Assembly at Nagpur that no new skyscrapers will be permitted in Mumbai till the Middle Vaitarna Project is completed in 2012.
This is the largest water supply project being built to meet the city's ever-increasing demand for drinking water. However, real estate projects that have been accorded permission would be given water. The city gets about 2,900 million litres a day against a demand for 3,500 MLD.
The Government move would mean that revenues from stamp duty and development charges would take a hit. Besides, the move would also hurt the finances of developers who had invested considerable sums to acquire land and begin construction. It would also adversely impact home-buyers who had got loans to purchase property. And, in an already skewed demand-supply scenario, the Government action could further fuel demand and raise property prices as well.
Mr Sunil Mantri, President-elect, Maharashtra Chamber of Housing Industry, said it would be utter chaos if such an order were implemented. Apart from the commercial and residential projects, there were slum redevelopment projects as well. Development should not be halted and in case there was no option, one should consider total dependence on water tankers and borewells.
As it stands, 25-30 per cent of the city depended on tanker supplies. Mr Mantri said the chamber would appeal to the chief Minister to rescind the order in the larger public interest.
“We have to learn how to manage the crisis. Recycling and water harvesting could help at such times,” said Mr Abhisheck Lodha, Director, Lodha Group.
Mr Lodha said since the Government intention was to curb new constructions, residents might not require more than six-nine months' supply from alternative sources, given the construction period of around two years for projects. “In any case, a good monsoon next year could change the entire scenario,” he added.
Mr Mayur Shah, Managing Director, Marathon Group, said there was hope as the Government was working on a lot of water projects. Any impact of the proposal would be temporary and a good monsoon could change the tide.
Water storage and distribution are key issues that needed to be managed better, said Mr Anand Gupta, General Secretary, Builders' Association of India.
Mr Gupta said since the 15 per cent water cut came into force construction work in Mumbai was being done with tanker supply and borewells. However, the Government stood to lose revenue in terms of development charges and allied income associated with construction activity. It could also create financial tangles as both developer and home buyer would have availed bank loans. Moreover, it could leave thousands of construction labourers jobless after the existing projects got over.
Charging that storage and distribution were major bottlenecks in the current water supply system, Mr Gupta said the Government should look to entrust the job to private players if it is unable to manage it effectively on its own.
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