Pie in the sky

Print edition : September 29, 2001

The S.S. Tinaikar Committee report exposes the truths about the Shiv Sena-BJP government's scheme for the resettlement of Mumbai's slum-dwellers.

A DAY before Deepavali last year, bulldozers knocked down Anjana Pandurang Nalawade's slum home in the upmarket Mumbai suburb of West Andheri. The demolition was, officials claimed, for her own good. Nalawade, like the 700-odd families who live in the D.N. Nagar slum, would be relocated into spanking new one-room apartments. The Shivshahi Purnasvasan Prakalp (SPP), an ambitious slum rehabilitation project launched by the Shiv Sena-Bharatiya Janata Party alliance government in December 1997, was to have built 200,000 homes by the end of 1999. Now a year later, Nalwade and her neighbours live in makeshift shelters put together with tarpaulin and sack-cloth. And most of the slum residents have lost their means of livelihood. Worst of all, the new homes they were promised are nowhere near completion.

Part of the D.N. Nagar slum in West Andheri, where the houses were demolished on the eve of last year's Deepavali.-PRAVEEN SWAMI

In August 2001, the report of the S.S. Tinaikar Committee on slum rehabilitation exposed the SPP as nothing but a fraud, designed to enrich Mumbai's powerful construction lobby by robbing both public assets and the urban poor. The Committee, headed by the highly-regarded bureaucrat S.S. Tinaikar, who retired as Mumbai's Municipal Commissioner a decade ago, found that by the end of March 2001, only 7,461 rehabilitation tenements were ready for occupation, and another 39,146 units were in various stages of construction. The Committee found that several projects had simply been abandoned by builders. Of the Rs.73 crores that the SPP handed over to construction firms in the first two months of its existence, over Rs.50 crores is yet to be repaid. Also, building regulations were routinely violated. "Relaxation of guidelines were made," the Tinaikar report asserts. "Funds in excess of the actual need were disbursed. Special favours to a few developers were made," the report points out.

The conceptual basis of the SPP was simple. In return for building public housing for the displaced, private developers would be allowed to undertake commercial development on slum lands. Where there was no land available for commercial construction, builders would be granted an instrument called "development rights", which would allow them to construct an equivalent amount of floor space elsewhere. In this case with Shiv Sena chief Bal Thackeray personally committed to the project, the most basic regulations governing slum rehabilitation were waived. For example, Mumbai slum rehabilitation rules mandated that 70 per cent of a slum's residents had to agree to a project before it could be initiated. But the SPP was exempted from such democratic niceties. A new Slum Rehabilitation Authority (SRA) was given the right to exercise all legal powers related to land issues.

But from the outset, the Tinaikar Committee report makes clear, the project had all the makings of a huge scam. For one, the bulk of the lands on which private builders were allowed to start projects were public lands, handed over at a pittance of between Rs.1,000 to Rs.4,000 per square metre. "The private builders," the report records on page 213, "picked up premium lands of public authorities, which had been grabbed by encroaching slums, and got a quick clearance from (the) SRA. Clearance from the land-owning government departments - the Maharashtra Housing and Area Development Authority (MHADA) or the Municipal Corporation of Greater Mumbai (MCGM) - was not a precondition. It was to follow within 30 days of the SRA approving the project of redevelopment. Lease or similar authority in respect of land was not insisted (on) by (the) SRA from the developer". Of the 270 hectares of land covered by the SPP, 62 per cent was state-owned.

HAVING taken control of public land at rock-bottom prices - the Tinaikar report says that prices were charged "almost free" - developers moved on to the next stage of the SPP fraud. Until March 1999, SPP officials tried to raise funds from the Housing and Urban Development Corporation (HUDCO) and the Housing Development Finance Corporation (HDFC). However, both organisations flatly refused to lend money to private developers for slum rehabilitation projects. In the case of HUDCO, after appraising 16 projects that were submitted, it refused to go through any more. Without passing any judgment on the financial credibility of the projects it had assessed, HUDCO suggested that they be passed on to the Investment and Credit Rating Agency (ICRA). The SPP board agreed. But then, suddenly it changed its mind and allowed the SPP Managing Director to choose any credit rating organisation he wished.

At this time, Maharashtra's new Housing Secretary, Govind Swaroop, had taken charge as Managing Director of the SPP. Instead of ICRA, he appointed two obscure New Delhi-based organisations as appraisers. Within two months, 51 projects were approved, and Rs.73 crores released to 30 projects, controlled by just 11 builders. The Tinaikar Committee found that the appraisers' reports were not subject to scrutiny by the SPP, and rules obliging builders to contribute start-up funds were waived. The Finance Secretary and SPP Director R.B. Buddhiraja mounted a stoic rear-guard action to block these flagrant violations, but to little avail. Owing to such unplanned disbursal of money, a cash-starved SPP began to default on payments to contractors and incur penalties. Of the Rs.408 crores that the MHADA and the Maharashtra Metropolitan Region Development Authority had given to the State government to be invested as share capital in the SPP, Rs.105 crores had already been committed when the Democratic Front government took power in October 1999 and stopped further spending.

Who were the beneficiaries of Swaroop's conduct? Consider the case of Akruti Nirman, a construction company which the Tinaikar report describes as "the worst of all the cases this Committee has observed". Akruti's owners, Vimal Shah and Hemant Shah, were both officially associated with the setting up of the SPP. Despite the objections that the SPP General Manager in charge of Finance raised that very large loans to developers were risky, Swaroop made over a Rs.30-crore first instalment to Akruti Nirman, claiming to have the support of then Chief Minister Narayan Rane. Similarly, another construction company, S.D. Corporation, was granted over Rs.18 crores overruling earlier demands that its project - the largest single SPP enterprise - be audited by ICRA. Thus, three of the 30 builders who received loans, alone accounted for over 66 per cent of the total funds disbursed. While Akruti and S.D. Corporation paid up, others did not. Builder Kiran Hemani, for example, has so far returned just Rs.2 crores out of Rs.13 crores due.

Since the SPP did not provide either for a deadline for the completion of the buildings or for any penalties, construction was delayed. With real estate prices at low levels in Mumbai, developers have an obvious interest in delaying construction, so that they can sell the commercial portion of projects at a higher price. "The fate of buildings under construction, many of which have been left abandoned or are showing very little progress," the report notes, "is at the mercy of developers." More important, slum residents who are the intended beneficiaries of rehabilitation projects, have no rights over the tenements they have been allotted. Although government organisations like the MHADA and the MCGM had been ordered to lease lands to private developers, in fact they did not do so. As a result, the Tinaikar report says, "occupants have no title or rights of any type in respect of property on which they are settled or which they claim to have purchased."

The building that would house the slum's residents, which is yet to be completed, and makeshift shelters outside it.-PRAVEEN SWAMI

WHAT is most appalling about the SPP story is that the project had no real chance of working in the first place. As the Tinaikar report notes on page 236, "it is well established, after 10 years' experience, that utilising the agency of private property developers for construction of formal houses for slum dwellers in replacement of hutments has failed miserably." "The size of problem," the report continues, "is of a magnitude with reference to which the achievement over the last ten years of the slum rehabilitation scheme is so minuscule; the gains derived by some developers by grabbing premium plots of public authorities for a song, so high; and excessively liberal development control rules to 'facilitate' the developers to make unlimited profit at the cost of integrated development of (this) metro city so brazen; that the continuation of this policy... is bound to be disastrous."

Consider the case of the D.N. Nagar slum. In September 1999, just before the Democratic Front government took office, bulldozers moved in and demolished at least 300 of the slum's 905 homes. While an estimated 200 families moved to a transit camp, the rest held out. Their reasons were simple. "First, we were given no guarantees on when our houses would be complete, and what would be done if the construction took too long," says car repair mechanic Dileep Nalavade. "But more important," he continues, "they will, at best, give us only a one-room tenement. In the slum, I used to run a workshop. That has been demolished, but I will be given no space for business in the building. How will I survive?" Out of work since the company he worked for closed down five years ago, Nalawade understands that the SPP will, in effect, strip him of his last economic asset.

Several others agree. Dileep's mother, Anjana Nalavade, used to earn upwards of Rs.100 a day from her spice and dal grinding machines, run from the space outside her slum hut. "The building they are constructing," she says, "is like a chawl (worker tenement). The corridor is very narrow, and there is no space to do any work there. How will I make a living?"

Others are resisting the project on even more practical grounds. Sunita More has lived in the D.N. Nagar slum for over 15 years. Although her family has a welter of legal documents testifying to their residence, the SPP authorities claim she is not entitled to a new home. "What proof do they want," she asks, "aren't my two children proof of how long I have lived here?" she asks. Hard hit by unemployment, some slum residents say they just cannot afford the Rs.40,000 they will have to pay for the new one-room flats, whenever they are complete.

But holding out is proving tougher than most people thought. Electricity connections have been cut off, and efforts by residents to "rent" lines from neighbouring shops and homes have been blocked by authorities. Anjana Nalawade lost her grinding machines when bulldozers, backed by policemen, moved in for the second time before Deepavali. Residents of the ten homes demolished have moved court, but feel that this is an expensive option. "My sons have to go at least twice a week," says Nalavade, "what with the lawyer's fees and so on, we've spent thousands so far." Although some slum residents have made several rounds of top politicians' homes, including the home of Deputy Chief Minister Chhagan Bhujbal, others have stayed out of political activity, fearing reprisals from the police and builders. Sooner or later, most people will accept the patently bad deal that the SPP has to offer. The Tinaikar report's findings should have encouraged the Democratic Front government to initiate action and put an end to people's suffering. Unfortunately, the State Cabinet has showed a strange reluctance to discuss, let alone act, on the report. Whoever might be in office, it seems, Mumbai's poor will continue to pay for its rich to get even richer.

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