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India Property
New CRZ notification
The Ministry of Environment and Forests (MoEF) has released
a new Coastal Regulation Zone (CRZ) notification, which
includes a special provision for the coastal regions of Greater
Mumbai. Such a notification will positively impact all Mumbaibased
developers; companies such as Orbit Corporation and
Ackruti City that have ongoing redevelopment projects and slum
rehab schemes (SRS) respectively would benefit more under
CRZ rules.
CRZ rules. CRZ includes regions with shore-lines. CRZ rules
disallow construction and development in zones notified as CRZ-
1, certain areas of CRZ-3 and limited construction on CRZ-2;
these rules protect coastal zones from being exploited.
New CRZ ’11 notification. Among other notifications in CRZ
’11, FSI/FAR will be in accordance with town and country
planning regulations prevailing for SRS, and FSI of 2.5 for
redevelopment of dilapidated buildings. This means such schemes
falling under CRZ-2 will get higher FSI than before vs. FSI being
restricted to 50% of the permissible FSI earlier.
Some caveats. Though the new notification on CRZ allows more
FSI, it also notifies that the government would have at least 51%
stake in the project. Clarity on government stake (whether on the
total project or free sale area) is needed in SRS. The MoEF may
appoint auditors who are empanelled with the Comptroller and
Auditor General to ‘undertake fiscal audit’ of such projects since
these would be in JVs with the government.
Impact on developers. All Mumbai developers who have, or
plan to have, SRS and redevelopment projects falling under CRZ
will be positively impacted owing to the higher FSI. Among listed
players, Orbit Corporation and Ackruti City already have some
projects under CRZ that are under construction or in the approval
stage and are, hence, likely to get higher FSI. We await clarity on
which projects the new CRZ notification would be effective.
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