BRTS Premium Row: CREDAI Supports GB Resolution For Rate Reduction

(Pune Mirror, October 12, 2010)
The Pimpri Chinchwad Municipal Corporation (PCMC) has invited objections and suggestions for the reduction in the BRTS premium rates that have been passed by the general body (GB) of the municipal corporation.
More importantly, the Confederation of Real Estate Developers’ Associations of India (CREDAI) has come out in favour of the proposed reduction in premium rates effectively pitting the builder lobby against municipal commissioner.
Anil-Pharande
 
 
Anil Pharande, president, CREDAI Pimpri Chinchwad unit, said, “The premium rates decided earlier are very high and not practical. It will increase the cost of construction. Suppose, the rate for TDR is Rs 700 per sq ft and then PCMC asks us to pay a premium of Rs 900 per sq ft.
This itself adds up to Rs 1600 per sq feet to the overall cost. Hence, it is necessary to reduce the premium rates. The current proposal to charge 25 per cent of the ready reckoner rate is appropriate.”
In August, the PCMC GB passed a resolution to reduce the premium charges to 25 per cent of the ready reckoner rate for allowing extra FSI. The ready reckoner rate is the rate of the land decided by the government, which is generally very less as compared to the market rate of the land in that area. So, the premium cost would also come down substantially.
After the suggestions and objections have been tabled, the proposal would be sent to the State government for approval. The issue had created quite a furore, after Opposition members alleged that the reduction in premium would cause loss of thousands of crores of rupees in revenue to PCMC. Sharma had remarked then that the GB is asking for a drastic reduction in premium rates, which, in his view, should not be done.
The PCMC had planned eight BRTS corridors in PCMC and would be spending in excess of Rs 2,100 crore for consructing these. The PCMC would be spending around 30 to 40 per cent of this amount, while the rest would be funded under JNNURM by the Central and the State governments.
So, to recover to construction cost of these roads, PCMC is allowing 0.8 extra FSI upto 100 metres on each side of the BRTS roads. For giving this extra FSI, PCMC would charge premium rates of 300,600,900 per sq. ft in A,B,C zones in PCMC. The state government also approved the proposal.
“PCMC had earlier given the powers of deciding the rates of BRTS premium to the municipal commisioner and the administration. But they made a blunder and proposed very high premium rates, which would make construction costs unviable.
The rates that have been passed by the general body now are appropriate. We expect the State government to give approval to the same in the next two to three months.”
Current Development Control Rule
TDR generated from any of the zone, from the sanctioned development plan (DP) of old and extended limit shall be allowed in the BRT corridor on payment of premium charges, which should not be less than what is decided by the general body (GB).
These premium charges are to be decided by the PCMC Commisioner from time to time. Premium shall not be charged for the 0.4 FSI of road widening area of the receiving plot
Modification Proposed
TDR generated from any of the zone, from the sanctioned DP of old and extended limit shall be allowed in the BRT corridor on payment of premium charges, and the said premium shall not be charged as per the policy sanctioned by the govt but shall be charged at the rate of 25 per cent of the govt ready reckoner rate of the receiving plot. Premium shall not be charged for the 0.40 FSI of road widening area of the receiving plot.

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