The Bolgatty island land deal controversy is getting murkier.
The Hindu has learnt that the proposed “service” apartments are no appendage to any hotel project and that they have been clearly defined as residential units by the promoters themselves. So far, the Cochin Port Trust (CPT) had defended the undervaluation of land at the Bolgatty island and possible breach of contract by the LuLu group, claiming that the land would be used solely for commercial activities. But The Hindu is in possession of documents that prove that the group was actually seeking to build residential units, distinctly different from the hotel and the convention centre and their allied structures.
CPT Chairman Paul Antony, in a widely televised press conference on Tuesday, had slammed the media for “confusing” serviced apartments with residential units and had claimed the LuLu group’s proposal to build 572 “service” apartments was part of its hotel project. He termed these apartments as the hotel’s allied structures.
In the case of valuation of property, Mr. Antony insisted that the land was valued at just Rs 2.1 crore an acre or Rs 2.1 lakh per cent because, unlike other Marine Drive projects in the neighbourhood, this piece of land at Bolgatty island was not meant for residential units. The upfront payment for 26 acres of Bolgatty land was fixed at Rs 71.3 crore on the basis of a valuation that pegged the cost of land at just Rs 2.1 lakh per cent. The State government had recently paid Rs 50 lakh per cent at MG Road.
Now, it is being revealed that the LuLu group had actually sought permission to build residential units, which were not part of the hotel. In its application to the Mulavukad panchayat, seeking permission to begin construction work at the leased land at Bolgatty, the LuLu group clearly mentioned the nature of apartments as “multi-family residential” with 416 dwelling units.
Though the term “service apartments” was mentioned in brackets, the occupancy category under which the permission was sought by the LuLu group leaves no doubt at all: “Residential Group A1”. Under this category, the applicant also has to state the number of dwelling units proposed to be built. And LuLu answered it by stating that it is planning to build “416 dwelling units”.
The application has another category, “Non-residential/others”. It is under this category that the LuLu group has sought permission to build its hotel and convention centre. Thus, the application submitted to the Mulavukad panchayat in June-July 2012, obtained by The Hindu under the Right to Information Act (RTI) on Friday, makes it very clear that the apartments were not part of the hotel project and that they had clearly distinguished the apartment complex as a residential project and the hotel and the convention centre as non-residential or commercial activity. The applicant has to specify the nature of the non-residential construction and the LuLu group termed them, hotel and convention centre.
Moreover, Pollution Control Board Chairman K. Sajeevan had given clearance to the project on August 17, 2012 terming the units only as “apartments”. The confusing prefix “service” is not used in the official consent given to the group. It just says, “624 apartments, convention centre with 2,500 seating capacity, three restaurants with 250 seating capacity, one bar with 50 seating capacity, hotel having 250 rooms and 4 presidential villas.”
Despite repeated attempts, Mr. Paul Antony was not available for a response.
When these inconsistencies were brought to the notice of Cyril C. George, secretary of the CPT, he said that the port was unaware of the LuLu group’s application submitted to the Mulavukad panchayat. “No such applications have come to the notice of the Port Trust. The trust has not received any such application,” he said. Mr. George said that the port stood by its earlier decision not to allow residential apartments on the land. “Such positions need not be stated repeatedly,” he said.
A.K. Dinakaran, president of the Mulavukad village panchayat, said that the local body had forwarded the application to the Town Planning Department of the State government as the construction on the site involved clearances pertaining to the Coastal Regulation Zone Act. “Moreover, the panchayat was not authorised to issue permission for such huge structures,” Mr. Dinakaran said.
Interestingly, the three distinct portions of the mega project have been numbered by the applicant. The multi-family residential project is number one, the hotel is number two and the convention centre is number three. The apartment complex is undoubtedly the biggest of all the three projects. According to the details given to the panchayat, these “service” apartments are for “residential use” and it will occupy 73,500 sqm and this proposal is separate from that of the hotel. The hotel which comes under the category of “special residential use” will have only 36,930 sqm. Even with just 416 dwelling units, the apartment complex overshadows all the other buildings on the LuLu map (see the conceptual plan map).
In three different applications to as many agencies, the group kept on changing the number of the proposed apartments.
If the number of “service” apartments is 572 as proposed in the latest application to the Kerala Coastal Zone Management Authority on March 18, 2013, then the apartment complex becomes bigger than all other portions of the project put together.
Though construction of the residential complex was not permissible and it was conveyed to the group during the pre-bid meeting itself, the CPT Chairman had been defending the LuLu group’s move to build 572 “service” apartments claiming that such apartments were part of the modern hotel concept. The fact that the port was not informed about building the apartments was condoned by Mr. Antony, saying that the group could apply for service apartments at a later stage though the lease deed had no reference to it.
Normally, serviced apartments are part of the hotel that operates it, and in the same building as in the case of Mumbai’s Grand Hyatt. Other operators like Fraser Suites have only serviced apartments on their premises and their commercial activity has no ambiguity. But here the “service” apartments are not part of the hotel building and permission was sought under the residential category for the “service” apartments instead of clubbing it along with the hotel under the “non-residential” category.
It is in this context that the clause for sub-leasing of all buildings that are being built by the LuLu group, including the apartments, assumes significance. The group has an open-ended lease for 30 years which can be renewed for one more term of 30 years and there is nothing in the deed that forecloses the renewal of the deed even after 60 years. All these provisions are applicable to the sublease of the structures too.
Legal position
Section 2 (g) of the Kerala Panchayat Building Rules, 2011, defines apartment as “a part of a building intended for any type of independent use including one or more rooms or enclosed spaces located on one or more floors or parts thereof in a building, intended to be used for residential purposes and with a direct exit to a public street, road or highway or to a common area, leading to such street, road or highway. This word is synonymous with residential flat.”
Legal circles pointed out that the nomenclature “service” apartment (without being part of a commercial activity like a hotel and as an independent residential unit) did not have any legal sanctity as it was not defined in the Kerala Municipal Building Rules and the Kerala Panchayat Building Rules, which govern the construction of buildings in the State.
