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Corporate Oct 18, 2011

Mumbai SRA scam: Top babu 'gifted' Rs 640 cr to builders

By Krishnaraj Rao, Canary Trap. Special to Firstpost

Shortly before Ratnakar Gaikwad became the Chief Secretary of Maharashtra, he used his discretionary powers as Metropolitan Commissioner of MMRDA (Mumbai Metropolitan Region Development Authority) to gift this city's builders upto Rs 640 crore of taxpayers' money.

That is a conservative estimate of the amount of unfinished construction work that the builders owed this city, which Gaikwad wrote off; the actual amount is likely to be well over Rs 1,000 crore, according to insiders.

Many of the alleys are covered with filth even in dry seasons. Krishnaraj Rao/Firstpost

Documents sourced through the Right to Information Act (RTI) by activist Sulaiman Bhimani show that former Municipal Commissioner of Greater Mumbai Swadheen Kshatriya acquiesced in this, enabling MMRDA to write off several contractual obligations of about 25 builders involved in 32 slum rehabilitation (SRA) sites. These obligations include installing street lights, drainage, sewer connections and water supply.

Fulfilling these obligations would, for example, have cost RNA Builders at least Rs 20 crore per site, based on calculations on one available estimate made by the Municipal Corporation of Greater Mumbai (MCGM).

If this estimate of unfulfilled obligations is extended to the several reputed builders who got away with 32 half-finished relief and rehabilitation (R&R) projects, also known as SRA (Slum Rehabilitation Authority) projects, the sums written off would be at least Rs 640 crore. SRA projects are also referred to as project affected people's (PAP) colonies.

These builders had a contract with MMRDA to provide standard on-site and off-site infrastructure while building these SRA projects. Their contract included providing internal roads, storm-water drains, water-supply lines, adequate sewage pipes, etc. (For reference see points marked red on page 15-16 of agreement with RNA Corp. (a.k.a. Skyline Developer) in Somani Gram, Oshiwara, Goregaon West).

MMRDA's Agreement with RNA builders

While formally handing over 32 projects to MCGM for maintenance, MMRDA noted that there were several "problems", including insufficient numbers of light poles (or no light poles) provided by builders, lack of connections to sewage lines, inadequate diameter of sewage pipes fitted, etc. (MMRDA acknowledges that in half a dozen projects, some necessary details, such as plan layouts and the exact numbers of residential tenements are also not available!)

In his letter, Ratnakar Gaikwad said that MMRDA would provide funds required by MCGM for upgrading the infrastructure "if MCGM find existing infrastructure inadequate/inefficient as per their norms/standards". (Read Gaikwad's formal handing-over letter to Kshatriya, and the accompanying table, which lists problems as per MMRDA. Significant parts of the documents are marked in red).

32 unfinished R&R sites handed over by MMRDA to MCGM

The above file also has MCGM's follow-up action in response to this handing over. MCGM undertook a joint inspection of site no 24 of the list, called Oshiwara ODC (RNA). MMRDA officials failed to turn up at this inspection, where MCGM's officials found problems far in excess of the table.

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They made an estimate of Rs 20 crore for cleaning up the mess left behind by the builder - construction of SWD (storm water drains), clearing the debris and roads, and provision of street lights. (According to MMRDA, the only problem here is the lack of street lights, which would have cost Rs 19 lakh only!)

R&R projects enable builders to create and enjoy massive amounts of TDR (Transfer of Development Rights) or extra FSI (Floor Space Index) in lieu of the slum areas cleared. This enables these builders to put up massive towers, with flats, that would fetch them over Rs 1 crore apiece at current rates.

They get the land for such towers for a pittance. RNA Corp got the land on 30-year-lease for Rs 3.85 crore (see page 3 of agreement). So what is the kind of work that they do in return? Must be quality work, right? After all, they are clearing slums and rehabilitating people, and making Mumbai more like Shanghai, right?

Wrong. They are merely demolishing horizontal slums and building vertical slums. RNA Corp has put up eight storey slums that are narrowly spaced. Many of the buildings, constructed in 2005, are already showing cracks which MMRDA recently repaired.

There is also a huge discrepancy that MMRDA is conveniently overlooking: As per MMRDA's table, these are 12 buildings with 1,948 residential tenements, and 53 commercial properties - including the one that was allotted to Sulaiman Bhimani.

But Bhimani points out that in actual fact, there are not 12 but 15 buildings, and 2,600 tenements crammed into the same small area that was originally planned for only 1,600 tenements (as per the agreement between MMRDA and RNA Corp) One of these buildings was constructed on a space designated for a playground.

"The cement work in these buildings is so bad that you can actually drive a two-inch nail into an RCC column with a single blow of a hammer," remarks Bhimani, who is an interior designer.

As for the quality of the on-site and off-site infrastructure that RNA Corp was supposed to provide, look at these photos taken earlier this month.

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