BHUBANESWAR: Real estate developers have to deposit one per cent of the project cost to Bhubaneswar Municipal Corporation (BMC) in advance so that the civic body may build infrastructure such as drains, streetlights and roads.
Such deposit would be mandatory for obtaining building plan approval from the Bhubaneswar Development Authority (BDA) without which construction work can't start.
Irked real estate developers said the BMC move was retrograde and would seriously impact apartment plans.
According to the minutes of a meeting of the BMC general body on July 31, circulated among developers last week, the developers have to deposit one per cent of the total project cost and expenses to be incurred by BMC for infrastructure development for the proposed multi-storied structures (stilt+3) in advance.
BDA would approve building plans only after the developers produce receipts of such deposits. BMC already charges two per cent of the project cost from developers towards such periphery infrastructure development charges. After deposit of the total fee, the civic body issues no objection certificates (NOCs). As per the ongoing practice, several builders were evading the fee, as the same was not mandatory to complete the projects.
"However, since BMC is not paid the two per cent, it is unable to create necessary infrastructure for such projects, causing inconvenience to the buyers. It can't take further action on the projects as the same would affect the buyers not the developers," a senior BMC officer said.
Following the new decision, along with the building plan application, the developers will submit a full set of infrastructure plans showing details of proposals for storm water disposal and sewerage plans for joint scrutiny of BDA and BMC within two months.
After completion of the building works, a joint team of BMC and BDA would visit the project site to inspect whether the builder has developed infrastructure as required. After that, BMC will issue no objection certificates (NOCs), which will be made mandatory for obtaining occupancy certificates from BDA. To make the process of issuing NOCs more efficient, a standard operating procedure would be prepared. The plan was first mooted by BDA on February 10.
BMC has decided to calculate the project cost by adopting Rs 1821 per square feet for lower segment type houses, Rs 1920.50 for premium type and Rs 2020.50 per square feet for high premium type.
Association for Odisha Real Estate Developers (AFORD) president Umesh Patnaik said the BMC move would further complicate the building plan approval process and breed corruption.
"There will always be chances of manipulating project costs. Since the BMC will incur the same cost on periphery development irrespective of the type of houses, such charge should be fixed depending on project size not project type," Patnaik said.
Real Estate Developers Association of Odisha president Pradipta Biswasroy said that while BMC was focusing on collecting fees, several newer areas under its fold lack basic amenities. "The agency should create common minimum infrastructure for all areas under it and charge a uniformly fixed amount towards periphery development charges," Biswasroy said.