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Economy Apr 10, 2013

Mumbra collapse: Politics is at the heart of this rubble

By Sunainaa Chadha

The dramatic collapse of Mumbra's Lucky Compound Building which claimed 74 lives, is a gut-wrenching reminder of the deepnexus between builders, politicians and officials.

This horrific event brings to focus, yet again, those who made it possible for incomplete flats to be sold and occupied - private architects, brokers, civil engineers and other civic and police authorities. But the real question is who should be held accountable and whether chief minister Prithviraj Chavan will dare to act?

"Penalty and suspension of municipal and other civic officials who sanction such plans is the need of the hour. But whether the government will pull up its socks and hold them accountable remains to be seen since even in the past- be it the parking scam or the Aadarsh Housing Scam- politicians and bureaucrats are involved hand-in-glove and no government has ever dared to take any action," says Pankaj Kapoor, MD at real estate research firm Liases Foras.

The problem of illegal construction finds its routes in political funding

While one can blame developers and officials for the mishap that resulted in the arrest of only 11 persons, such purge is only a half baked solution as this is not the first case of illegal construction. It is a systemic problem and can be corrected only if the government ensures no encroachment of public land by unscrupulous builders and brings about more transparency in political funding.

Mumbra

Rent control regulation is the biggest impediment to expanding land supply and thereby lowering prices

"The root cause of illegal construction is political funding. If there are strict laws in place to prevent such goodwill between the builder and politician, especially at the time of election, there will be no need for illegal buildings in the first place," says Dr Abhay Pethe, Professor of Economics at Mumbai University.

Gains are made by by exploiting the interval between the conception of a law and its enactment to secure their stake in any possible change for example, the Urban Land Ceiling and Regulation Act in Mumbai, he explains in an EPW article titled, Unravelling the Anatomy of Legal Corruption Focusing on 'Honest Graft' by Politicians.

"Besides, the political elite, in collusion with bureaucrats, can legally frame policies that may open up avenues to serve their private interests. We need reforms that satisfy the "goodness of law" and that can be done only by curbing legal corruption, especially the use of information by politicians to make personal gains," he told Firstpost.

IThe article further argue that there is an urgent need to revise the rules of funding election campaigns, "which place unrealistic ceilings on spending, leading to malpractices that not only flout the law but also provide a boost to the shadow economy."

Shortage of housing within city limits led to an influx of construction in unplanned suburbs

Rapid urbanisation and migration has put tremendous pressure on Mumbai's urban infrastructure, resulting in the shortage of urban housing within city limits and an unprecedented real estate boom in far flung suburbs as those who cannot afford a house in Mumbai are buying or renting houses in areas like Mumbra-Kalwa, Diva, Kharghar, Panvel, Kalyan-Dombivli, Bhiwandi, Mira-Bhayander or Vasai-Virar. Since supply fell radically short of demand due to the failure of urban planning, construction took place anywhere sheltered by a land mafia, irrespective of whether it was sanctioned or not.

And the Mumbra tragedy was a fallout of such illegal construction booms.

Mumbra is spread over the side of the hills that begin at the edge of Thane Creek. It spreads from the creek to the hills. From a population of 45,000 in the 1990s, Mumbra has now grown into a city with a population of over 15 lakh. A report in the Hindustan Times says 7.5 lakh people in the region live in slums. Such over-crowding led to an increased demand for affordable housing and local builders backed by political grandfathers made use of the vast agricultural land available in areas of Mumbra and Diva to construct illegal buildings. The outcome: At least 2 lakh unauthorized homes across Thane and Kalwa-Mumbra-Diva belt.

"Builders got away with it, because such areas were considered a blind spot by the state," says columnist and commentator Mahesh Vijapurkar.

"Dominated by minorities, areas like Mumbra is almost a ghetto with working class families, migrants, and riot affected people moving into illegal constructions in masses from nearby villages that are rarely visited by government officials," adds Sulakshna Mahajan, urban planner at Mumbai Transformation Support Unit.

Greed for profit leads to land grab, inferior-quality construction

With nobody to challenge them, builders continue to prosper, building more Lucky Compounds using inferior-quality construction material and offering 'goodwill' (bribes) to police, civil officials and politicians at every level, while flats are offered at negligible or low rates to lure occupants in an effort to prevent demolition.

Right from the identification of a forest land ( where construction is not allowed) to the no-objection certificate, bribes are paid between Rs 5,000 to Rs 10 lakh, depending on the rank and file of the civil official.

"Ninety out of 100 constructions in Thane will be illegal and in the know of civic officials. The reason nobody is brought to book today is because not only do civil officials demand things in kind, but are hand in glove with every real estate deal that takes place," says Pankaj Joshi, Executive Director, Urban Design Research Institute in Mumbai.

Need to streamline approval processes for realty projects is more urgent than ever before

In his view, the state should stop pussy-footying about who is to blame when it comes to illegal structures and rather start streamlining the approval processes so that builders don't have to run from piller to post to get their projects started.

" Each building requires at least 36 approvals. And each approval costs money, which in turn creates a very high real estate cost."

But how does one prevent more Mumbra-like diasters?

Pethe offers a three-fold solution to this.

1. Make real estate deals transparent by making all information regarding anytransaction made by politicians available to the public along with systematically recording such transactions. In that way, no one politician can use the information advantage about a proposed project to make profit in a "legitimate" manner.

2. Construction policy needs to be reworked. In its current form, the Floor Space Index is exploited and used as a financial instrument to first provide concessions to builders and then profits by promising additional FSI at a premium price. "Mumbai needs a granular FSI policy, not a universal one, notes Pethe.

3. Rent control regulation is the biggest impediment to expanding land supply and thereby lowering prices. Given the massive demand, rapidly growing immigration, and virtually depleted shelf of vacant lands, the only way to generate built-up space is by reforming the Rent Control Act and the Floor Area Ratio restrictions. Any other reform has to revolve around these two fundamental changes.

According to a study by conservation architech, Vikas Dilawari, Mumbai has approximately 16142 cessed properties of which more than 5000 are more than 100 years old. Chavan wants to redevelop such dangerous buildings through a cluster development model but given the nature of how deals are passed in the power corridors of Mumbai, it is likely that the new plan will not end up in the hands of the politician-builder-bureaucrat nexus too.

But apart from laws and policy reforms, the state government needs to give a boost to affordable housing too. But without the over reliance on private players.

"The state government already has various agencies to provide affordable housing. Unfortunately, both Mumbai Metropolitan Regional Development Authority (MMRDA) and the Slum Rehabiliation Authority are not doing their job. When the demand for cheap housing is more than a million, the government should not depend on the private sector to build for the poor. They will never do so without their own gain. By just building 3,000 houses, this very government has created an enabling environment for illegal houses and slums rather than for affordable housing, " laments Joshi.

If more Mumbra collapses are to be prevented, the 'enabling environment' that Joshi refers to, will have to be torn down at all costs.

by Sunainaa Chadha

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