Soon, builders may lose MHADA contract if project is delayed

The Maharashtra government is planning to amend the law and provide for termination of contracts with private builders, if they don't complete the projects of MHADA, the state housing agency, in time.

The Slum Rehabilitation Authority Act, under which private builders can construct houses for slum dwellers and get rights for commercial development in return, has a provision for termination of contract for delays.

But the Act governing the Maharashtra Housing and Area Development Authority (MHADA) doesn't have any such provision.

The authority, whose mandate is to build affordable houses, has 104 colonies in Mumbai alone. It hires private builders for its projects, for constructing new buildings as well as for redevelopment of the old ones.

"To expedite pending projects, we are going to introduce a contract termination clause in MHADA Act on the lines of SRA Act," said Housing Minister Prakash Mehta.

"It will empower MHADA to select a new builder and complete the pending construction. There are hundreds of projects where private builders could not finish the construction because of various reasons," Mehta told PTI.

In the case of redevelopment of old MHADA buildings, the delay creates problems for residents as they have to live in temporary shelters for many years, the minister said.

The proposal to amend the act has been sent to the Law Department, he said.

"Several MHADA colonies in Mumbai are due for redevelopment. We are also planning to bring both MHADA and SRA projects under the Real Estate Regulatory Authority (RERA) Act, which will also ensure completion of projects in time," he said.

The RERA Act provides for penalties for builders if they don't complete projects in the promised time.