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Vanishing mill lands

Print edition : Sep 23, 2005 T+T-
An apartment block that has come upon the surplus land sold by a private textile mill.-PAUL NORONHA

An apartment block that has come upon the surplus land sold by a private textile mill.-PAUL NORONHA

If the Maharashtra government and the real estate developers have their way, more mill lands in Central Mumbai will have shopping malls and apartment complexes coming up on them though the metropolis is in no position to bear the pressure of such construction.

CENTRAL Mumbai is acquiring a new landscape, which seeks to obliterate any trace of its vibrant industrial past. The textile mills, which played an important role in the industrialisation of Mumbai and evolved around the culture of the city's working class, are now giving way to development of upscale neighbourhoods. Mill floors that resounded with the clang of machinery have been converted into shopping arcades, and residential towers have replaced their chimneys in the new skyline.

Essentially, if the Maharashtra government and the construction companies have their way, which in all likelihood they will, the now-defunct mills will soon be sold and they will make way for shopping complexes, luxury apartments, high-tech corporate offices, entertainment parks and star hotels.

Until recently, there was little activity in the area, mainly owing to various Development Control Regulations (DCR). But an amendment to the DCR and a Supreme Court order permitting the National Textile Corporation (NTC) to sell five of its properties have opened up vast tracts of prime land for development.

Although the Mumbai High Court is yet to give its verdict on the mill properties, close to 600 acres (240 hectares) of land will soon be up for grabs, with absolutely no conditions on how it should be developed. "Judicious use of this land is extremely important as the city is primarily an island, and real estate is limited here. Lawmakers have to prioritise and decide what is important for the city's growth," says Chandrashekhar Prabhu, an architect and urban planner who has closely followed the mill issue. Mumbai craves open spaces, desperately requires housing for the urban poor and needs better infrastructure to support millions who make their way to the city to earn a living.

Since real estate prices in Mumbai are among the highest in the world, the availability of prime land is a bonanza for builders and realtors. In June, the NTC's Mumbai Textile Mill was sold for a staggering Rs.702 crores to the Delhi-based DLF Group in one of the most expensive real estate deals in the country. Earlier in the year, the NTC sold its first property, Jupiter Mills, for Rs.276 crores. Subsequently, it sold Apollo Mills for Rs.180 crores. Recently, it sold Kohinoor Mill No.3 for Rs.421 crores to Kohinoor Projects, a company owned by Shiv Sena leader Manohar Joshi's son Unmesh Joshi and Matoshree Realtors, of which Sena leader Raj Thackeray is director.

At these prices, infrastructure, housing for the poor, and green space will certainly not be a priority. With the amended DCR and the court's order, people were ready to bid huge amounts for these properties. Realising this, some urban planners, environmentalists and concerned citizens filed a public interest petition in the High Court. The Bombay Environment and Action Group (BEAG), which spearheaded the petition, says Mumbai will not be able to bear the pressure of anymore massive construction. Any development in Mumbai needs to be carefully thought through, it argues. More important, the PIL challenges the State government, which it claims surreptitiously amended the DCR in favour of the mill owners and developers. Furthermore, the BEAG contends that several mills have not got the necessary clearance from the Pollution Control Board and other organisations to begin construction.

The controversy over the sale of mill land dates back to 1991 when the government, in response to pleas by mill owners, introduced Section 58 in the DCR. Better known as the "one-third formula", DCR-58 allowed mill owners to carve up the entire mill land into three parts. They could then sell one-third and give one part to the Municipal Corporation of Greater Mumbai to create open spaces and the third to the Maharashtra Housing and Area Development Authority (MHADA) for providing affordable housing to the families of mill workers who lost their livelihoods on the closure of the mills. In 2001, however, the government used a loophole in the Maharashtra Town and Planning Act, 1966, and amended DCR-58 to DCR 53 (I), which states that only land that is vacant, that is, with no built-up structure, shall be divided under the one-third formula. Thus the mill owners managed to keep the bulk of the land and the area to be given to the corporation and to the workers was reduced to just 6 per cent of the 600 acres.

For almost two years, no one realised the impact of the DCR amendment. When real estate prices started skyrocketing in 2003, hectic construction activity began on private mill lands. Similarly, the NTC, realising that property prices were good, approached the Supreme Court for permission to sell its lands to settle the workers' dues and repair the losses incurred by it. The court ordered that private mills were permitted to take up construction if they got the permission from the authorities. But the court ruled that any construction would be at their own risk, and subject to the judgment of the High Court on how the land should be divided.

In spite of the uncertainty surrounding the issue, massive structures are already coming up on several properties. Apparently, the owners and builders are confident the court will rule in their favour. "The strategy they adopt is to bid high, which will invite a public interest petition. The High Court will then rule against the builders. The matter would then go to the Supreme Court, which will call off the bids and order fresh tenders to be issued. Then the builders would come back with a lower bid, which will not be objected to, or bid high and do not show up. That way another bid can be called and the property would go for a lower amount," says Prabhu. "This is what happened in the Bandra-Kurla complex case," he told Frontline. At that time there were bids as high as Rs.1,600 crores for a hotel complex. In the end, the bidder did not show up.

The fact is that something had to be done about the land. But it has to be thought through in a holistic manner, says Prabhu. "If rampant development is allowed, we could have another July 26-type situation." A cloudburst caused severe flooding in most areas of northern Mumbai on July 26. The widespread development in the suburbs had become a strain on the infrastructure. The system could not cope with the downpour that led to the massive waterlogging.

"We need housing and areas of employment, not towers and malls," says Datta Iswalkar, leader of the Girni Kamgar Sangharsh Samiti, a trade union in the textile industry. Iswalkar says the government should have created an industrial zone for non-polluting industries, such as garment or diamond enterprises. Although the new complexes may provide employment to a few thousands, an industrial zone would have given employment to a few lakhs, he says.

"But setting up commercial complexes is the most profitable business," says Rajan Shirodkar, head of Kohinoor Projects Company. The company is raising the necessary funds with the help of Infrastructure Leasing and Financial Services Limited (IL&FS). Shirodkar says, "We have been in the area for 20 years and know what is the most viable. Central Mumbai is ideal as it services the south and north of the city."

Ironically, the Shiv Sena earned its spurs as a party when it took up the cause of mill workers in the 1960s. Today Shiv Sena unions have lost most of their ground in the area as they failed to protect the workers' interests.

The first textile mill, Bombay Spinning Mill, was set up in 1854 in response to Britain's need for cotton textiles. At that time, cotton was imported from the United States but when the Civil War broke out in that country supplies stopped. This enabled the Indian textile industry to flourish. In 1961, the mills employed more than 2.5 lakh people. But a decline in imports owing to stiff competition from other countries started to lead the mills to ruin. By the 1980s the majority of the mills closed after a prolonged strike. Today, there are 58 mills employing a mere 20,000 people. Of these, 32 are privately owned, 25 are owned by the NTC and one by the State government. Twenty-nine private mills, declared sick by the Board for Industrial and Financial Reconstruction (BIFR), have shut down. The few mills operated by the NTC have incurred massive losses. By selling its land, the NTC hopes to raise Rs.1,800 crores to settle its dues.

The mills issue has remained mired in controversy for years. For instance, activists say many private mills do not have the right to sell their property as they were given the land on lease for industrial purposes. Then there is the issue of compensation for workers. Former Managing Director of the NTC (South) V.K. Tripathi told Frontline that NTC had settled all the dues to workers who had worked on the lands that had been sold.

Over the years, several plans to restructure and make optimum use of the mill area were proposed. They remain on paper. The plan that received much publicity was that of the architect Charles Correa, which attempted to retain the character of the area and yet give it a new life. Neera Adarkar, an architect and a champion of the mill workers' cause, maintains that it will be a pity to lose the Girangoan (mill) area, which has a rich tradition and culture, to development. There are other alternatives to explore, she contends. New York and Manchester have restored their defunct industrial zones without altering the character of the area.

If the mill lands go, a whole chapter of Mumbai's history would be lost. But a government keen on redevelopment does not want a millstone round its neck in the form of the obligation to preserve the past.