In what is perhaps the first such move by a state, Maharashtra, which has seen the most aggressive land acquisition for Special Economic Zones (SEZs), has permitted a developer to utilise the bulk of his acquired land for a residential-cum-commercial township. Chief Minister Devendra Fadnavis approved a proposal last week, allowing real estate major Hiranandani Communities to develop the 135-hectare land in Navi Mumbai’s Khalapur taluka, which was notified for an SEZ, as an integrated township, comprising residential complexes, shopping malls, multiplexes, hotels, schools, colleges and hospitals.
The approval comes about a year Fadnavis revised Maharashtra’s policy for such integrated townships, promising higher buildable area incentives and sops to its developer. On December 26, 2016, the CM rolled out his new policy, allowing township developers to build up to 2.2 times the plot area, depending on the size of the township.
While confirming the development, senior government sources said the CM’s approval was “conditional” in nature. “A locational clearance has been approved for the development of the township. The developer would have to get the SEZ denotified for the land parcel before going ahead with the project,” said a senior official. Interestingly, when the proposal for the conversion of the development model was first put before the CM, he had declined permission, insisting that the developer must first get the SEZ land denotified. The Union ministry of commerce has to approve the denotification.
When contacted, a company spokesperson for Hiranandani Communities said, “We have already applied for identification of some of the land. We are hopeful for the denotification exercise to complete in the next few weeks.” In the meantime, government officials said the developer had submitted officials documents, including a communication from the ministry, showing that the denotification process had been initiated.
The SEZ land is close to the location where Maharashtra is setting up a new international airport, the Navi Mumbai International Airport. The state-run City and Industrial Development Corporation (CIDCO) has announced plans to develop the surrounding area as a new showpiece city —NAINA — which is coined after the Navi Mumbai Airport Influence Notified Area.
According to the document, Persipina Developers Private Limited, a Hiranandani group company, holds around 210 hectares in the region. Of which, about 140 hectares had been notified for an SEZ. Fadnavis has now permitted about 135 hectares from this notified land to be utilised for developing the township. Incidentally, some residential space has already been constructed in the “non-processing” area of the SEZ, where purchasers have booked investments too.
The company’s spokesperson said, “Our motto has always been to create mixed-use township. The original SEZ law had a very clear mandate permitting both processing and non-processing area (including residential). While the recent dual-use policy (of the commerce ministry) with respect to the SEZs exists, there is still no clarity over the status of residential purchasers. We believe that in order for the SEZs to exist and flourish, there must be sufficient residential space close by. While both the SEZs and integrated townships continue to have USP, we also believe that people will see IT SEZs within integrated townships similar to what we have in Powai.”
The company is already building a similar mixed-use township in neighbouring Thane, where a top IT firm has invested in office space. Senior officials said the state has not permitted conversion of 5 hectares of constructed SEZ land. But sources said most of the residential buildings constructed previously had been included in portion to be denotified. “The building in the SEZ land would continue as SEZ building and the buildings in the integrated township land would become integrated township buildings,” the spokesperson said.
There is also a zoning issue with regards to the site. Officials said while some of the land falls inside the NAINA jurisdiction, the Maharashtra State Road Development Corporation (MSRDC) is the town planning agency for some portion. The developer has also had to obtain Right of Way for some portions in the proposed township for non-contiguous land parcels. The company has said SEZ incentives availed for the denotified areas would be refunded.
Over the last decade after the SEZ Act came into force, Maharashtra witnessed a scramble by developers to create export-oriented enclaves, which enjoy various tax and other concessions. Of the 68 SEZs approved in the state, records show that 49 were notified. But the records show that so far only 28 among these have been operationalised. While 24,819 hectares have been acquired across the state for SEZs, only about 3,059 hectare has been put to use for the purpose.