The Slum Rehabilitation Authority (SRA) will take over 500 slum redevelopment projects in Mumbai after it was found that developers availed of loans from financial institutions on the basis of Letter of Intent (LoI) from the authority and did not execute the project for many years, displacing slum-dwellers without providing them houses as per the law.
State Housing Minister Jitendra Awhad said, “The developers picked up loans from financial institutions on the basis on LOI. The institutions, however, did not contact the authority to check on the progress of the said projects. Hundreds of crores of rupees have been invested here. The SRA will take over these projects and complete them by itself.”
SRA issues LOI to the developer assigning a particular slum pocket to be redeveloped. “The LOI does not mean that the said builder owns the land,” the Minister said. On the basis of LOI, the developer provides accommodation to the eligible slum-dwellers at a different place till the project is completed and the slum razed.
He said, “We have hundreds of examples where the slum is razed and those residing in it have nowhere to go. The developer has not even paid for the rent of their new house. SRA under the housing department will execute such projects now.”
Mr. Awhad said the department will add a time-frame in which project has to be completed once the LOI is issued. “It has been observed that builders sits with the LOI, raises money from the financial institutes and does nothing. Nobody knows what happens to the money that has been raised through loans. We cannot let this happen,” he said.
As per the conservative estimate from sources in the department, ₹50,000 crore is invested by various financial institutions in all SRA schemes. “We cannot let people suffer for the sake of builders. We will be fixing the time frame and taking over the projects to ensure that people get their legitimate house,” he said.
