Mhada Puts On Hold Lig, Mig Plans

The plans of Maharashtra Housing and Development Authority (Mhada) to construct houses for the Low Income Group (LIG) and Medium Income Group (MIG) have been put on hold following the poor response to its housing schemes in city suburbs like Powai and Oshiwara.

Mhada had plans to construct LIG and MIG flats all over the city as part of its mass housing programme. The government was planning to invest the money collected from selling the flats at Oshiwara and Powai into the construction of LIG and MIG flats.

The problem has been compounded by the fact that the Brihanmumbai Municipal Corporation has not paid Rs 75 crore by way of repair cess

 

Following the slump in the real estate market, the flats constructed by Mhada for the high income group (HIG) hardly have any takers. Secondly, private builders are offering flats in the same localities at lesser rates. Another handicap was that Mhada wanted the entire payment to be made in white which did not find favour with the buyers.

Mhada's mass housing programme suffered another setback following the state government's instruction that it should concentrate on constructing transit camps for another 10 years.

As on April 30 this year, Mhada's funds to the tune of Rs 603 crore is blocked in Mumbai. MHADA, being a government agency, was not in a position to change its pricing according to the shift in market conditions. "We had already collected some money from prospective buyers. If we rework the agreement, some money has to be refunded, and that's not a very feasible idea," a board member pointed out.

The matter is being looked into very seriously, and board members have been told to find out ways to come out of this financial imbroglio at a meeting held yesterday.

The Bombay Housing and Area Development Board (BHADB), the Mhada wing that looks after the mass housing programme in Mumbai, expect the flats to be sold in no time. "The location at Powai is excellent. The houses face the Powai lake, and we expected that there will be buyers, " says a BHADB board official.

The flats at Powai and Oshiwara, measuring 1000 sq ft, was being offered at Rs 27 lakh. There are 1940 flats in Powai, and the state government has begun approaching central government institutions like Income Tax and Central Excise to sell the flats.

However, only Videsh Sanchar Nigam Ltd (VSNL) has paid Rs 28 crore towards the cost of the flats purchased by it.

A senior income tax official said that they have not yet decided whether to go in for the flats offered by Mhada. "Considering the fact that the Central Public Works Department is not in a position to offer flats for our staff, we might have to go in for these flats," he added.

Mhada officials have strengthened their marketing tactics to woo these institutions at any cost. BHADB chairman Vishwanath Nerukar is quite hopeful that the flats will have buyers.

According to him, no plans of Mhada has been put on hold since they have surplus funds to the tune of Rs 400 crore.

"There is demand for flats from VSNL, IT, Central Excise, Customs, Gujarat government, Bank of Maharashtra and MIDC to name a few," he added.

According to another MHADA official, this move has been necessitated following poor response from the public. "Normally, after scrutinising the applications, we draw a lottery to select the buyers. Here we are running behind people to buy flats from us," he said.

"When the scheme was opened, there were more than 2,000 applicants who deposited Rs 1 lakh with us. However, they were not keen on making the remaining payment after we told them that the entire money has to be in white," another official pointed out. The total investment made by Mhada in these projects work out to around Rs 268 crore (excluding the cost of land), and it was expecting returns of at least Rs 770 crore, says Nerukar.