Survey for rehab of slum dwellers on airport land in Sept

Express News Service : Mumbai, Sat Aug 07 2010, 01:23 hrs

In a move to clear the longest-standing hurdle to critical development work on the highly-constrained airside of the Chhatrapati Shivaji International Airport, multiple agencies agreed on Friday to kick start work on rehabilitating slum dwellers who occupy 276 acres of the airport land.

Guardian minister for suburban Mumbai Naseem Khan, who convened a meeting of stakeholders in the rehabilitation project, said a survey of the approximately 60,000 families occupying this land to identify those eligible for free rehabilitation would begin next month. The first phase of shifting the slum dwellers was scheduled to be completed earlier this year. "7,000 homes for these residents are now ready in Kurla... The first phase of shifting slum dwellers could begin by Diwali this year. We hope the process of shifting all slum dwellers from airport land will be completed in two years."

The review meeting was attended by representatives of the Mumbai Metropolitan Region Development Authority, Slum Rehabilitation Authority, the housing department, the GVK-led Mumbai International Airport Ltd (MIAL) and realty firm HDIL that has been contracted to build apartments for slum dwellers.

Khan said the pockets of slums to be cleared first had been identified and they included Jari Mari, Sandesh Nagar, Kranti Nagar, Shivaji Nagar and Bail Bazaar, together occupying about 30 acres.

While MIAL took over in 2006 and contracted HDIL in 2007 for the rehabilitation and resettlement of slums, the all-important survey has remained pending, owing to opposition from encroachers. "The MMRDA will now start an awareness campaign in the slums by roping in NGOs and community representatives," said Khan, adding that all rehabilitation sites would be within seven km of the slumdwellers' homes.

HDIL is constructing 17,000 homes of 269 sq ft (carpet area) each in Kurla (West) on a plot earlier owned by Premier Co. "This will be a self-contained township with places of worship for people of all religions, amenities like schools, community centres, a market police chowky and a fire brigade. The residents will also not have to pay any maintenance costs for 10 years," the minister said.

Mumbai airport upgrade flies into slum rehabilitation delays

February 25, 2008 09:07 IST

Rediff.com

An 18-month to two-year delay is expected in the Mumbai airport slum rehabilitation programme to find alternative land to relocate and resettle approximately 80,000 slum-dwellers, who have encroached on 276 acres of airport land.

The delay will seriously impact the expansion and modernization of the country's second-busiest airport.

The GVK-led consortium, which is modernizing the airport, had appointed Housing Development and Infrastructure Ltd to work out a slum resettlement programme to identify alternative land and relocate people in four phases.

Once free, this airport land was to be used to augment the runway system and, therefore, increase the airport's ability to handle more passengers.

The first phase of the slum resettlement was to be completed in 18 months with a deadline of April 2009 and the second phase by October 2009. The target date for the final phase was October 2011.

But HDIL's managing director, Sarang Wadhawan, told Business Standard: "It will be at least two-and-a-half years before the first slum-dweller is shifted."

What this means is that the relocation of slum dwellers even of the first phase can only begin only in late 2010.

The delay is chiefly because HDIL is keen to take all stakeholders, especially the local administration, on board its plans. The company has asked for time to make a presentation on the programme.

"It is important to take the corporators, councillors and NGOs into confidence," said Wadhawan. The slum rehab policy demands that at least 70 per cent of the affected dwellers give the developer consent to move.

The survey work to identify the exact number of slum -dwellers is yet to begin but the company said it had already identified the land for slum resettlement from its land reserves. It has earmarked 147.5 acres, nearly 6 per cent of its vast land bank in the city, for the project.

Under regulations, the relocation has to take place around the airport and each family, irrespective of size, is to be given a dwelling of 225 sq foot.

Industry sources estimate that in return for the land surrendered and the tenements constructed for the slum-dwellers, HDIL will get Transferable Development Rights over an area that will approximately be 3.5 times the area surrendered.

These TDRs could be either sold by HDIL or used to enhance the floor space index of its current projects.

The delay will compound the problem of congestion at the airport. The airport reports 635 air traffic movements a day and all carriers report an average circling time of 45 minutes.

The freed-up land was expected to help clear the runways faster with the construction of four parallel taxiways (against one now) and 11 rapid exit taxiways (currently two).

Between April and December 2007, the airport handled 25.2 million passengers. The number is likely to go up to 26 million passengers for the full year by March 2008.

With a projected annual growth rate of 18 to 19 per cent over the next four years, Mumbai airport will receive 50 million passengers by 2012.

A Mumbai International Airport Ltd spokesperson said the land to be freed up is of critical value.

Some of the land is needed to relocate facilities like the air traffic control tower, the line and maintenance facilities of several airlines and hangars that need to shift to accommodate the new exit ways. Part of the new integrated terminal is also located on the area occupied by slum-dwellers.

According to HDIL, of the 276 acres, 180 acres would be used for airport development and 96 acres for commercial development.

Slums Near Mumbai International Airport Face Demolition

NRI Today

For as far as they can remember, thousands of people have lived in 100 square feet shanties spread around Mumbai International Airport. And as for many years, these are the views that hit passengers as their planes land on the tarmac. But under the new urban redevelopment plans for Mumbai, millions of slum dwellers near the International Airport in the country's financial center, and other areas are being removed to distant locations. More than 200 acres of encroached land on which the slums sit and share a boundary with the 2000-acre international airport are in the process of being demolished. With India's aviation market expanding at 20% a year, the need to expand and upgrade facilities is all the more urgent.

The move is meeting with stiff opposition from some residents who fear disruption to their work, the problems resulting with the move far from the markets where they sell their goods and distances their children will have to travel to school.

But authorities say there is no cause for alarm. According to officials of the Mumbai International Airport Limited, which is revamping the airport, "The slum dwellers will be resettled. These structures are on the airport land and very close to the runway." But residents, who have for years lived perilously close – about 50 meters - to the runway for what seems forever are shying from the prospect of moving. They have learned to live with the deafening roar of airplanes, the overpowering stench of aviation fuel and the severe monsoons that flood their shanties.

However, relocating 400,000 people out of the 85,000 huts that encroach the land is a daunting task. It is the biggest slum rehabilitation anywhere in the world. "The challenge facing the airport owners is common to most Indian cities. Authorities in the capital, Delhi, have cleared tracts of unauthorized slums in preparation for hosting the next Commonwealth Games," news media reports say. Many more are slums slated for clearance before the games begin in 2010.

Mumbai International Airport Ltd took over the airport in 2006 and has hired a specialist housing development firm to manage the mass relocation. It has four years to move all the residents on the 112 hectares. Many slum residents fear they will end up in new urban developments on the edge of Mumbai. Community groups advocating for the residents, say the residents are happy to move as long as their new houses are near the airport. "We fear we will be 30 to 50 kilometers from where we work. This is a big problem. We don't want to go away from the airport — more than 100,000 of our children go to school here."

Many are employed at the airport in low-skilled jobs, such as trolley collectors, guards and cleaners. Others work in industries dependent on the airport, such as taxis or airport-related construction. The average income in the slum is around $50 to $100 a month.

Suitable land close to the airport is being found for the construction of new multi-storey buildings to house the slum dwellers. But the airport cannot give an assurance that everyone will end up close to the airport.

- By A. Sharma

IAAI eyes Rs 80 cr saving in fuel costs from slum rehabilitation

MUMBAI: EIGHT acres of the International Airport Authority of India's (IAAI) land in Mumbai has been cleared of slums, allowing the crucial expansion of the landing and pre-takeoff taxing area. This will save Rs 80 crore per month in aviation fuel and reduce waiting time for aircraft by over 50%.

Once the cleared land is developed, aircraft will be able to take off and land once every two minutes instead of the current five minutes, airport officials said.

The slum clearance, conducted by the Slum Rehabilitation Authority (SRA) in conjunction with the IAAI, also involves the rehabilitation of the evicted 1,850 slum families. The state government promoted Shivshahi Punarvasan Prakalp (SPPL) has developed 2,614 units in the north-west suburb of Dindoshi for this purpose. SPPL has also built 189 tenements and two towers for commercial sale to cross-subsidise the rehab project.

The crucial expansion airport near the Kurla-Sakinaka road link will allow aircraft to taxi in a wide circular movement before taking off instead of taking sharp right-turns to reach the runaway, as is the case at present.

This will not only mean a large saving in fuel, but also make the queuing and take-off of aircraft more efficient, airport official’s claim.

Providing these details, SRA's chief executive officer (CEO), Ujwal Uke, said the airport clearance and rehabilitation work would be pursued simultaneously in the remaining 20 slum pockets housing nearly 65,000 families on airport authority land. A priority list has been drawn up and the next in line for evacuation would be the slums at the other end (Santacruz-Western Express Highway) of the runaway.

"The second round is crucial as the large slum pocket abuts the security wall of the airport and many of the huts have windows opening out into the airport security area," another senior SRA official DS Malvankar told ET.

However, the speed and time schedule of expansion is critically dependent on how the civil aviation ministry approves the rehabilitation budget.

A shifting and rehab charge of approximately Rs 1.25 lakh per hutment will mean that the expansion of the Chatrapati Shivaji Airport will cost ministry of civil aviation as much as Rs 600 crore.

Another question mark is the land sites for the rehabilitation of these large number of people, who will face eviction from the airport land.

Among several alternatives doing the rounds is state government bodies Mumbai Metropolitan Region Development Authority (MMRDA) or MHADA undertaking the rehab project on salt pan lands.

However, the crucial transfer of these 2,700 acres of land, belonging to the Central government, to the state government is yet to take place. A high-power cabinet committee examining the issue is yet to file its report, senior officials said. Meanwhile, revenue officials revealed that only 80 hectares of this land is unencumbered and usable at the present stage.

The state government is also examining a Rs 3,300 crore proposal by private developers to build 75,000 houses for rehabilitating the airport and footpath slums on salt pan lands.

The project, under the slum redevelopment scheme, will involve the construction of an equal number of units for commercial sale which will cross-subsidise the free units for slumdwellers.

In an attempt to push for 'development with a human face' the state government - through the SRA - is involved in clearing land earmarked for crucial reservations and public projects by simultaneously rehabilitating those pre-1995 hutment dwellers at new sites.

These include clearing 65,590 square meters of 1.72 lakh sq m reserved for public gardens, 3.2 ha of the 9.2 ha of 'reserved' playgrounds and 38,380 sq meters of arterial and secondary road expansion, according to a progress report issued by the SRA.

Source: The Economic Times

HDIL to cash in on Mumbai airport slum rehab

Tuesday, Jun 7, 2011, 2:43 IST | Place: Mumbai | Agency: DNA

Amritha Pillay

Developer set to meet targets for transferable development rights this fiscal as MMRDA starts shifting slum dwellers to Kurla .

Real estate company Housing Development and Infrastructure Ltd’s (HDIL) major slum rehabilitation project at the Mumbai international airport is witnessing momentum after being in limbo for months.

The Mumbai Metropolitan Region Development Authority (MMRDA) has begun shifting eligible slum-dwelling families from the airport area to the developer’s Kurla compound. Analysts see the development bringing in clarity on transferable development right (TDR) volumes of HDIL for the coming quarters.

“The MMRDA has commenced the shifting of eligible slum dwellers from Mumbai International Airport (MIAL) slums to Kurla Premiere compound. Allotment letters have been issued to the eligible slum dwellers,” HDIL said in a statement. The shifting of the slum dwellers is a part of the Phase I of the MIAL slum rehabilitation project undertaken by HDIL.

“From what we understand, the tenants under the Khar elevated road are being shifted at the moment. The shifting could be completed within a month,” said Hariprakash Pandey, VP-finance, HDIL. The total number of tenements under Khar elevated road is said to be around 600 to 700 families.

Analysts said the move is definitely positive for the company as it gives some hope on the project and further clarity on TDR volumes.

On an earnings call last month, Pandey had said that the outlook on TDR sales depended on the approval process of the MIAL project.

“We did close to 0.85-0.9 million square feet in the last quarter of fiscal 2011 and I think we are confident that this kind of rate can be maintained at least for close to a year. Again the future depends on the whole approval processes.”

“This recent announcement gives more clarity on the TDR volumes and its target for TDR sales this financial year looks achievable, which earlier looked difficult,” said an analyst from a foreign brokerage.

Some analysts expect shifting of more than 20,000 families to be completed by the end of this year.

A note from Anand Rathi Financial Services, said, “Shifting of families indicates visibility on the remaining phases, for which HDIL already possesses most of the required land. Hence, it could now look at developing such land parcels. Along with TDR generation, the shifting will also release free sale area.”

Mumbai Airport Rehabilitation Project

Overview

The Mumbai Airport (MIAL) Rehabilitation project
A vital public project

Highlights

Largest Urban Rehabilitation Scheme in India

No. of Hutments 85,000 approx.

Scale similar to Town Planning & Urban Renewal Scheme

Vital Public Project

Approved FSI of 4

Airport Modernization & Expansion

Provide World Class Infrastructure

Generation of more than 10,000 jobs over next few years

Phase 1 of the project has already begun, with 85% of the work completed on a development in Kurla, intended to rehabilitate about 20,000 slum dwellers from Vile Parle, Santacruz and Sahar.

The first 16,000 tenements are scheduled to be allotted shortly. It is the first step in a vast project, aimed at eventually freeing 275 acres of encroached airport land for development.

Housing Development & Infrastructure to rehabilitate slums around Mumbai airport, to develop airport land

17 October 2007

Real estate major Housing Development & Infrastructure Limited (HDIL) has won the bid to develop 276 acres of slum land belonging to Mumbai's Chhatrapati Shivaji International Airport (CSIA) from the GVK group's Mumbai International Airport Pvt Ltd (MIAL).

The project involves rehabilitation and clearing of slums occupying airport land, as well as development of part of the cleared land. About 85,000 families now settled on the land will have to be rehabilitated in phases over a period of 18 to 48 months.

This is one of the largest slum redevelopment and rehabilitation projects in the country to be allotted to a single company. Mumbai's Dharavi Redevelopment Project, spread over 535 acres, is bigger, but is divided into five sectors, each of which is to be given to a separate winning bidder.

MIAL had called for bids to redevelop the land and there were five players in the race including Akruti Nirman and Marathon. The Mumbai Metropolitan Region Development Authority (MMRDA) is the nodal agency for the survey and rehabilitation of slum dwellers.

The main attraction for HDIL is the transfer of development rights (TDR) and the land for commercial development it will get from undertaking this project. That amounts to about 70 acres for sale. The company is expecting revenues of Rs15,000 crore to Rs20,000 crore from the project in the next four to five years.

HDIL, promoted by the Wadhawan family, is involved in the development of commercial complexes, residential apartments, slum rehabilitation projects and the infrastructure business. The company has raised Rs1,400 crore from the equity markets this year.

MIAL chairman GV Krishna Reddy said his company had awarded the contract to HDIL because it had experience in slum rehabilitation projects in Mumbai, as well as the financial strength for a project of this size.

He sais MIAL was committed to undertaking a model slum rehabilitation exercise in line with the policy laid down by the Maharashtra government, and the company was confident that the project would result in time-bound delivery of airport development.

Reports of CAG India – Discrepancies in the Slum Rehabilitation Authority, Mumbai

April 24, 2012 Press Statement

Reports of Comptroller and Auditor General of India vindicates NAPM’s stand on discrepancies in the working of the Slum Rehabilitation Authority,Mumbai

Brief Background on SRA

Slum Rehabilitation Authority [SRA] was established in December 1995, in pursuance of Section 3A of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 to tackle the issue of the growing number of urban slum settlements in Mumbai. Though the SRA was to rehabilitate all the slum dwellers whose names appeared on the electoral role as on January 1^st 1995, the extension of the aforementioned date, [to January 1^st, 2000] is pending in the Supreme Court for certain vital public projects like the Dharavi Development Project, the Mithi Development Project etc. The SRA was to design slum rehabilitation schemes under the Slum Act and the Development Control Regulations [DCR] of Greater Mumbai for rehabilitating slum dwellers. Each family in the slum is to be given a self contained tenement of 269 sq ft free of cost. An incentive Floor Space Index [FSI] was provided to developers through which they could construct buildings for sale in the open market to recover the cost incurred for the rehabilitation scheme. The SRA is headed by the Chief Minister under the Slum Act who monitors the implementation of the schemes. Ministers for Housing and Urban Development, the Chief Secretary, the Mumbai Municipal Commissioner and Principal Secretaries of Housing, Urban Development and Law and Judiciary Departments and the Chief Executive Officer(CEO) of SRA are the members of the authority.

Discrepancies in evaluation of developer

The performance and audit reports of the Comptroller and Auditor General of India reveals some startling facts about major lapses on the part of the SRA in some very preliminary andpre-conditional areas such as evaluation of the technical capability of developers to be entrusted with the projects was not followed. Instead of insisting on credit ratings of the developers, the SRA, blatantly flouting the norms under the housing policy introduced in 2007, has been obtaining bank guarantees from them! SRA had also not laid down norms for minimizing time overruns and though a period of three years was fixed in all agreements between the societies and developers, this was not adhered to, in a single project thereby causing more trauma to the slum dwellers who were waiting for an unsure future through an unstipulated period of time.

Non issue of photo identity cards to beneficiaries

The tenement granted to the rehabilitated slum dwellers was not to be transferred for the first 10 years from the date of allotment and for the same reason, the beneficiaries were to be given photo identity cards. Seven years after the inception of SRA, the authority outsourced the work of issuing identity cards to a private company who pulled out mid way. The transfer of the job from one private company to the other and the subsequent lack of accountability resulted in only 9,547 slum dwellers being allotted photo identity cards as against 1.27 lakh slum dwellers to whom tenements were allotted. This has made the clause of non transference of tenement by the beneficiaries for the first 10 years redundant and provides a situation that is conducive to corruption and other malpractices.

Unauthorised Occupancy

If the certified number of tenements for slum dwellers in a project being executed by a developer falls short of the stipulated 500 tenements per hectare, the shortfall was to be originally added to the project and pavement dwellers were to be accommodated. The report states that out of 20 projects of SRS wherein additional tenements has been constructed, they were not handed over to theMunicipal Corporation of Greater Mumbai [MCGM] but that 318 tenements were found to be occupied by illegal tenements against who no eviction action was taken! For example, in the case of slum dwellers being relocated from Sanjay Gandhi National Park, Borivili to Chandivili in Powai, it was found shockingly, that of the 3,198 rehabilitation tenements of the first phase of the project, 531 tenements were locked, 329 sublet, 48 were being used for commercial purposes and 34 tenements were sold!

Lack of surveys on eligible slum dwellers

The performance audit reports of the Comptroller and Auditor General of India clearly points out the lack of any survey on the number of slums and their population, inspite of several complaints about the list of eligible slum dwellers. As a result of the laxity on the part of the SRA in conducting these surveys to draw baseline datas of slums on high value land, contiguous slum areas, slums on non viable areas etc, proper linking of schemes and development on township model has not been possible.

Non compliance of provisions of recreation grounds and open spaces

As per the provisions of the Development Control Regulations [DCR] for plots of over 10,000 sqm and in cases where the land use was changed from industrial to residential, open space of 25% the plot area was to be provided for recreation grounds. For plots having less than 10,000 sq m, open space of 20% of the plot area was to be provided. These provisions were made to prevent overcrowding, high density and unhygienic conditions in the tenements. In most cases unexplainable and unexplained relaxations were granted to the developers thereby violating the guidelines set for rehabilitation tenement for the SRA.

The report of the Comptroller and Auditor General of India specifically names Mumbai International Airport Limited [MIAL] as having incurred undue benefits after being awarded the work of slum rehabilitation on airport land for the Housing Development and Infrastructure Development [HDIL]. The report also notes that a conservative estimate of Rs 4 lakh per tenement amounting to a total of Rs 1120 crore was recoverable from MIAL, which was also not done! A minimum additional infrastructural charge of Rs 84 crore was recoverable in addition to the normal infrastructural charge which was also not done by SRA!

Initially , a rehabilitation scheme to rehabilitate slum dwellers on 18 acres of MHADA land in Golibar, Santa Cruz was sanctioned in 2006 and 2007 to be executed by Shivalik Ventures, Mumbai. While the project was ongoing, Shivalik Ventures submitted a proposal for integrated redevelopment [Special Township Plan] of 125 acres for rehabilitating 26,000 families which was approved by the Chief Minister in 2008 by issuing orders under clause 3 [K] of the Slum Act. The CAG report however, reveals that the claim of Shivalik Ventures to have acquired 22 of the 52 acres land by consent was not verified by the government / SRA before issuing an order! Moreover, there was absolutely no process of transparent bidding before selecting Shivalik Ventures as the developer. It is clearly stated in the housing policy of 2007 that the selection process should be based on a free and transparent bidding process. 43 acres of land belonging to the Defence Ministry and 2 acres of land owned by the Central Excise Department was included in this project, for which no objection certificates that had to be obtained from the respective bodies was also not got! The Special Township plan effectively helped the developer to take up a large township scheme with basically no opposition through a non transparent process where Shivalik Ventures had the sole monopoly. What is really shocking is that, Shivalik Ventures, which operated as a partnership firm when it proposed the STP in 2008, was later converted to a limited company in which Unitech Limited , held a substantial 50% in the company share!

NAPM welcomes the honest and critical report brought out by the Comptroller and Auditor General of India which exposes the nexus between government agencies and developers at the cost of the lives and livelihoods of the poorer sections of the population who not only do not receive the benefits of rehabilitation, but are also forcefully removed from their places of residence. The 9 day hunger fast that was undertaken in 2011 by Medha Patkar, Zuber Bhai, Shantabhai and another 1200 people who went on relay hunger fast , to bring out the corruption and oppression of the builder- government nexus stands vindicated with this CAG report. The hunger fast was held specifically to bring out issues of forged signatures of slum dwellers by the developer, to show that consent was got for the project in Golibar and to demand a larger enquiry into all slum development projects in Mumbai. The struggle is however, a long one and we need to keep a vigilant eye on the powerful forces that are joining hands to incur undue and illegal benefits at the cost of the taxpayers of this country and the urban poor.

We demand that the government should-

· Review the working of the SRA and take stringent action against the offenders found to be involved in corruption and other malpractices.

· Revive the two fact finding committees set up during the last year’s fast.

· Implement Rajiv Awas Yojna immediately and effectively to provide proper housing to the urban poor.

Ajit Singh to review status of Mumbai airport expansion

Cost escalation and delays in the expansion of Mumbai international airport have attracted the attention of civil aviation minister Ajit Singh. He, along with Maharashtra chief minister Prithviraj Chavan, will review the project status on June 18. It was to come up by December 2012, but the new integrated terminal will now be ready only in the last quarter of 2013.

Chavan said the expansion of Mumbai airport was crucial. “Officials with MIAL (Mumbai International Airport Ltd) will make the presentation to us,” he told Business Standard. “Also, (realty company) HDIL, which has constructed houses for slum dwellers to be rehabilitated, would be called to give the present status.”

The work on the new terminal building began in February 2009, but hit a road block as the state government dithered on relocating a Chhatrapati Shivaji statue because of opposition from political parties. Currently, the airport handles 30 million passengers a year, but the proposed terminal is being designed to handle 40 million travellers annually. The statue was finally shifted in August last year, clearing the way for project completion.

The elevated road connecting highway to the new terminal, too, has faced delays because of encroachment and delays in slum rehabilitation.

As for the rehabilitation of slum dwellers situated on the airport land, the Slum Rehabilitation Authority informed that 11,000 tenements were already ready at Kurla in northeast Mumbai and 18,000 tenements were under various stages of construction at seven locations in Kurla, Mulund and Nahur. They would be complete in a year-and-a-half, according to S S Zende, CEO of the Authority.

“Currently land procurement is underway,” he told this newspaper. “The total land required for rehabilitation would be around 160 hectares. The total number of slum families on airport land is 80,000. Shifting of eligible slum dwellers is the responsibility of Mumbai Metropolitan Region Development Authority.”

Zende, quoting the agreement signed in 2007 between MIAL and HDIL, said the slums were to be resettled in seven years.

An MIAL spokesperson confirmed that the new terminal would be ready by last quarter of 2013, and a new air traffic control tower would be completed by the end of this calendar year.

The cost of Mumbai airport development was originally pegged at Rs 9,800 crore, but it was later revised twice. According to MIAL, the project cost was revised because of inclusion of additional works such as construction of ATC tower, elevated airport road, widening of the Mithi river and relocation of Chhatrapati Shivaji statue. These works led to an escalation in the project cost to Rs 10,453 crore.

MIAL, in its submission to Airport Economic Regulatory Authority in January, said it will raise Rs 8087 crore to finance the works. This includes Rs 4231 crore debt and balance which consists of accruals, real estate development deposits and development fee which it collected before the Supreme Court ban. The airport operator said it was facing a shortfall of Rs 2,366 crore and requested the AERA to sanction the development levy on departing passengers. That fee was approved recently. Subsequently, the project cost was revised again -- and has been pegged at Rs 12,380 crore. MIAL said the cost went up further because of pre-operative expenses, contingency, change in scope and variance in estimates.

Slum rehabilitation: MIAL denies receiving any letter from PM's Office

Shubhra Tandon

Mumbai, Sept 6

Even as the Prime Minister, Dr Manmohan Singh, is reported to have sought details on the progress of the slum rehabilitation programme around the Chhatrapati Shivaji International Airport, the company developing and operating the airport said it has not received any communication to that effect.

“We have not received any correspondence from the PMO (Prime Minister's Office) regarding slum rehab,” Mumbai International Airport Ltd (MIAL) spokesperson told Business Line.

In October 2007, Housing Development and Infrastructure Ltd (HDIL) bagged the contract for rehabilitation of Mumbai airport slums spread over an area of 276 acres. Under the contract, HDIL needs to resettle about 80,000 slum households.

This encroached area, says MIAL, is essential for the expansion of CSIA. At present, the airport has less than 2,000 acres of land for development of the airport, of which 276 acres is occupied by slums.

According to HDIL, Phase 1 of the project has already begun; with 85 per cent of the work complete about 20,000 slum dwellers will be rehabilitated. The first 16,000 tenements are scheduled to be allotted shortly, said the company.

The Prime Minister's concern comes at a time when Mumbai's existing airport infrastructure is fast reaching saturation point and there is still no clarity over the second airport site.

Last week, Maharashtra's Chief Minister, Mr Ashok Chavan, along with a delegation of ministers met Dr Singh in Delhi regarding the development of second airport facility in Navi Mumbai. After the meeting, Mr Chavan said that the Prime Minister had assured that he would look into the matter as soon as possible and will hold meetings with the Ministry of Environment and Forests and Ministry of Civil Aviation to remove obstacles in the way of the project.

Rehabilitation Schemes in Mumbai

Highlights

The Maharashtra Slum Areas (Improvement, Clearance and Redevelopment)Act, 1971 (Slum Act) was amended (December 1995) for the establishment ofa Slum Rehabilitation Authority (SRA) for the planning and design of the SlumRehabilitation Scheme. The schemes to be formulated and cleared by SRAwere to be governed by the Development Control Regulations (DCR). SRA isvested with the responsibility of conducting surveys and reviewing the existing

slum areas; formulating schemes for rehabilitation of slum dwellers; getting the Slum Rehabilitation Scheme implemented through developers. We noticedthat certification of eligible slum dwellers was delayed; there were no quality norms for development of rehabilitation buildings, the developer was granted excess transfer of development rights in Mumbai International Airport Slum Rehabilitation Project. The Dharavi Redevelopment Scheme failed to take off even after seven years and township projects were awarded to developers without any tendering. Infrastructural charges collected were lying with SRA without being used for the intended purpose. Some of the significant findings are as follows : The Slum Rehabilitation Authority did not conduct any survey regarding the number of slums and their population nor did they have any data bank containing lists of eligible slum dwellers. (Paragraph 2.1.6.1)

As against 1.27 lakh eligible slum dwellers who were allotted tenements, only 9,547 slum dwellers had been issued photo identity cards as of September 2011. (Paragraph 2.1.7.3)

Though the respective Project Implementing Authorities were responsible for identification of slum dwellers and obtaining their certified lists within 270 days from the dates of issue of letters of intent for implementation of the projects, this certified list was not given in 22 out of the 47 completed projects sanctioned between 1997 and 2003. (Paragraph 2.1.8)

Development Control Regulations provide that tenements can be given to slum dwellers on private land if the entire cost of tenements is paid by land owner. The State Government Support Agreement with Mumbai International Airport Limited (MIAL), a private limited company also provided that cost of relocation be borne by MIAL. A total of ` 1,120 crore recoverable on account of construction of 28,000 tenements was not recovered. Though Government extended the provisions of Clause 3.11 to the Airport project, on payment of additional infrastructure charges, even this additional amount of ` 84 crore was also not recovered. (Paragraph 2.1.9.1)

Report No. 2 (Civil) for the year ended 31 March 2011-12 MIAL awarded the work of slum rehabilitation on airport land to a developer. The developer was granted excess Transferable Development Rights of ` 187.17 crore on account of inclusion of lifts, common spaces like staircase areas etc., in the rehabilitation component. Further, excess land Transferable Development Rights for measuring 42314.97 sq m in three projects amounting to ` 48.66 crore were provided to the developer. (Paragraphs 2.1.9.3 and 2.1.9.7)

There was short recovery of ` 133.54 crore towards infrastructural charges from the developer of the Mumbai International Airport Slum Rehabilitation Scheme due to incorrect application of rates.(Paragraph 2.1.9.8)

GVK’s two-year wait on Mumbai airport land may end soon

Airport operator to lease parcels of land via auction, earn rent from properties once they are built

Madhurima Nandy | P.R. Sanjai

First Published: Tue, Dec 18 2012. 11 18 PM IST

The Mumbai airport operator can utilize the funds thus raised to repay the airport’s debt and fund its capital expenditure programme.

Updated: Wed, Dec 19 2012. 12 34 AM IST

Bangalore/Mumbai: GVK Power and Infrastructure Ltd’s two-year wait for permission to offer for development about 200 acres of land around Mumbai airport, which it runs, may soon come to an end with the Maharashtra urban development department giving its final approval, said three people familiar with the development.

Once it gets the approval, GVK will launch road shows to showcase the project. The company will then auction the land parcels to be leased to the winners. GVK will also earn rent from the properties once they are built.

GVK raised its stake to 50.5% in Mumbai International Airport Pvt. Ltd (MIAL) in 2011 by buying a 13.5% equity stake from Bid Services Division (Mauritius) Ltd for $231 million (Rs.1,267 crore) today. Bid Services continues to own a 13.5% stake in the airport operator, ACSA Global of South Africa 10%, and state-run Airports Authority of India the remaining 26%.

“As per process, the public notice is expected to be put up to intimate the general public, the date for which ends this month. Once the notice is put out, the chief minister is expected to sign any time after that,” said one of the persons mentioned earlier, none of whom wanted to be named.

“The master plan has been done by HOK (a design and engineering company) and the plan is to bid out the land in a phased manner,” this person added.

MIAL can utilize funds thus raised to repay Mumbai airport’s debt and fund its capital expenditure programme. MIAL is modernizing the terminals, air-side facilities and air traffic control tower.

GVK will start monetizing the real estate after the development plan is finalized by the state government, said a senior company executive on condition of anonymity.

Vice-chairman and managing director G.V. Sanjay Reddy declined comment for this story.

The move is expected to lead to the development of around 20 million sq. ft over seven-eight years. The land use is largely restricted to hospitality-related activities such as hotels and serviced apartments, apart from office space and associated retail development. The land is in the suburbs of Santacruz, Kalina and Sahar.

“The monetization of the airport land is going to be hugely beneficial for GVK. MIAL is expecting to get over Rs.1,000 crore as non-aeronautical revenue,” said an airport consultant who spoke on condition of anonymity. “As Mumbai airport follows a hybrid model, 30% of the money will go to offset the hike in aeronautical charges, the remaining 70% will go to the airport.”

Aeronautical charges include fees for landing, navigation and parking for airlines. Airport charges are calculated under three models—single, double and hybrid till. Under single till, all principal airport activities including aeronautical and retail are taken into account to determine airport charges. In contrast, only aeronautical- or flying-related activities are considered under the double till principle, while the hybrid model is a combination of these two, proving cheaper for airlines than the dual till model but slightly more expensive than the single till one.

Property advisory Jones Lang LaSalle (JLL) has been given the marketing mandate for the project, for now named GVK Sky City.

The company also worked with GMR Infrastructure Ltd, which runs Delhi airport, when it conducted a similar exercise in 2009-10.

“Just like JLL helped GMR monetize real estate assets in Delhi, we will help bring in hospitality operators and equity partners here too,” said Anuj Puri, chairman, JLL India .

Puri sees high demand for the land as the parcels are in the city centre.

GVK reported a consolidated net loss of Rs.43.66 crore for the September quarter. Income from operations stood at Rs.640.35 crore for the quarter, up 34.14% from Rs.477.38 crore in the year-ago period.

“The loss during the quarter was attributable mainly to the interest paid on debt raised for acquisition of equity stake in Mumbai and Bangalore airport projects,” Mint reported 10 November citing a GVK statement.

Property consultants said pricing could be a challenge.

“GVK’s price expectation would be high from this project, and in the current scenario, while there would be many interested parties, there could be a price mismatch,” said a property consultant who didn’t want to be named.

Approval for the monetization of Mumbai airport’s real estate assets are a positive risk for the airport, said an 11 December report by JP Morgan India Pvt. Ltd authored by senior analysts Sumit Kishore and Deepika Mundra. They maintained the valuation of the Mumbai airport land at Rs.1,250 crore.

“We assume that 2.5 million sq. ft of the total 15 will be used to fund airport capex (capital expenditure). The physical master plan has been prepared and GVK is estimated to unlock two million sq. ft of commercial space initially,” the analysts wrote.

Shares of GVK Power ended at Rs.13.53 apiece on the BSE on Tuesday, up 1.81%, while the benchmark Sensex rose 0.63% to close at 19,364.75 points.

Mumbai airport: Aera asks AAI to consider equity infusion

If AAI agrees, GVK may have to infuse more money so its holding is not diluted

Tarun Shukla | P.R. Sanjai First Published: Sun, Oct 14 2012. 11 49 PM IST

A file photo of the Mumbai international airport. Mial has invested about Rs.12,300 crore in the modernization of Mumbai airport through a mix of equity, debt and land lease.

Updated: Mon, Oct 15 2012. 02 53 PM IST

New Delhi: After the government auditor recently questioned the collection of development fees at private airports, the airport regulator has asked Airports Authority of India (AAI) to consider investing more equity in Mumbai airport so that passengers need not be taxed more for its development, two government officials said.

If AAI agrees, GVK Power and Infrastructure Ltd, the majority owner in Mumbai International Airport Pvt. Ltd (Mial) with a 50.5% stake held by a subsidiary, may have to infuse more money so its holding is not diluted. AAI has a 26% stake in the airport company.

Mial invested about Rs.12,300 crore in the modernization of Mumbai airport through a mix of equity, debt and land lease. It wants to collect a development fee from passengers of about Rs.3,400 crore, of which the Airports Economic Regulatory Authority (Aera) has approved for about Rs.1,400 crore.

The balance requirement will need fresh funding but the key question is whether passengers should pay for the development of the airport, which will be complete in 2014, or if the existing stakeholders can add funds.

Aera in late August wrote to state-owned AAI asking if it was in a position to pump more equity into Mial’s equity base of Rs.1,200 crore, the two government officials mentioned above said, declining to be identified.

With the Comptroller and Auditor General (CAG) criticizing the clearance given for the collection of airport development fees from passengers in public-private-partnership projects such as the Delhi airport, there is a rethink in the civil aviation ministry on the levy, one of them said.

A public accounts committee headed by Murli Manohar Joshi, a leader of the principal opposition Bharatiya Janata Party, is examining the CAG’s report, which alleges that the government gave post-contractual benefits to Delhi International Airport Pvt. Ltd (DIAL).

The aviation ministry is thus exploring if Rs.1,000 crore in equity can be brought into the Mumbai airport project, and if AAI can bring in Rs.260 crore with its 26% stake.

This will mean GVK would have to infuse about Rs.500 crore in equity if it does not want to dilute its stake in Mial.

Bid Services Division (Mauritius) Ltd has a 13.5% stake in Mumbai airport and ACSA Global the remaining 10%.

The aviation ministry’s view now is that the “public should not suffer”, the government official quoted above said. “AAI has indicated it maybe in a position to give about Rs.200 crore.”

The second government official confirmed the parleys between AAI and the ministry.

“Since the development fee is the last resort of financing, other avenues of additional financing must be explored. In case more equity is obtained then the development fee will be less,” this official said, adding the airport also has the support of profit under “retained earnings” amounting to Rs.500-600 crore on its balance sheet.

A Mial spokesperson did not offer any comment for the story. An email sent to the spokesperson remained unanswered.

Delhi airport, in which AAI holds 26%, had brought in a total equity of Rs.2,400 crore to fund the project. When the funding requirement escalated, AAI refused to give more equity citing a fund crunch as it is modernizing some 35 non-metro airports across the country.

While the development fee at Delhi airport “is difficult to revisit”, said the first government official, since the matter is with PAC, the Mumbai airport is being discussed keeping the recent developments in mind.

GVK increased its stake in Mial from 37% to 50.5% in 2011 and plans to sell some stake to private equity players to raise Rs.3,000 crore to reduce its debt that had taken to buy the additional stake, according to a 9 August report by Mumbai based brokerage ICICI Direct.

The holding company, GVK Power and Infrastructure, had a debt of Rs.14,000 crore in March. In fiscal 2012, it had a revenue of Rs.2,500 crore.

A private equity deal meant to retire part of this debt is yet to materialize.

On Friday, the airport tariff regulator asked the Mumbai facility to sharply scale back its demand for an increase in aeronautical charges, Mint reported on Saturday.

GVK shares rose 2.61% on the BSE on Friday to close at Rs.14.53, on a day when the benchmark Sensex fell 0.69%.

“I should think that the airport operators should be looking at recovering their costs in the long term by increasing volumes and number of passengers, thus increasing revenue, rather the short term way of getting the maximum amount from a small number of passengers,” said Suresh Nair, India head of Malaysian low-fare airline AirAsia.

The airline, which operates 60 weekly flights to five Indian cities, stopped flying to Hyderabad, Delhi and Mumbai citing increased costs. Nair pointed out that AirAsia on 1 October moved its entire operations from Suvarnabhumi International Airport in Bangkok to the old Don Mueang International Airport in the city, which is 30-40% cheaper.

Even a 1% increase in airport costs is a significant burden on airlines, Nair said. “I should think that this factor would be the same or more important for Indian low-cost carriers, who now form more than 70% of the domestic operations in India,” he said.

GVK reports Q2 consolidated net loss of Rs.43.66 crore

Higher interest expenses and underutilization of capacities at power projects drag on Sep quarter earnings

Viswanath Pilla

First Published: Sat, Nov 10 2012. 07 06 PM IST

Revenues from the Mumbai International Airport Pvt. Ltd were down 6% year-on-year at Rs.314.45 crore. Photo: Hindustan Times

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