CMDA gives green light to CREDAI proposal to convert IT buildings for non-IT purposes

 

C Shivakumar

Chennai:

Chennai Metropolitan Development Authority has given a green signal to the proposal by Confederation of Real Estate Developers' Associations of India (CREDAI) to convert IT buildings into non-IT purpose.

Sources told Express that the authority had a detailed discussion on the request from CREDAI to permit conversion of IT and Information Technology Enabled Services (ITES) buildings into non-IT use recently.

The IT buildings were constructed due to incentives given by the state government to builders to promote IT. The state government’s liberal sops by way of increased FSI at 3.75 FSI for IT buildings encouraged builders. Now these buildings are lying vacant due to lack of tenants.

Sources said that the authority during the meeting held last month resolved that such conversion of use may be permitted provided the additional FSI availed of by individual developers at the time of obtaining earlier approval as concessions over and above the normally permissible on the site under reference may be treated as premium FSI on case by case basis subject to compliance with the land use regulation.

However, the measure could be detrimental to the state exchequer as the authority has decided that the premium FSI charge may be collected at the rate of guideline value that was prevailing at the time of obtaining earlier planning permission instead of current guideline value.

“This could result in huge loss to the state exchequer. The CMDA should charge as per the existing guideline value instead of the old guideline value,” said a town planner. He also demanded that the government abolish the concept of granting premium FSI.

The proposal to convert IT building into non-IT purpose was made following slump in the IT sector. It is believed the city has over five million square feet of commercial space in IT buildings.

Chief executive officer of Akshaya Private Limited and former president of Confederation of Real Estate Developers Association of India T Chitty Babu said that the move by CMDA authorities is a welcome one. “It will help government get more revenue,” he added. He also said that the buildings would now be converted to banks, malls, hospitals, schools and institutions.

Former national president of Builders Association of India, Radhakrishnan has welcomed the move by CMDA. “This move will be beneficial for promoters to convert the IT buildings to non-IT purpose,” he added. However, he said that it will be difficult to convert the IT buildings to residential ones. These could be used for other purposes like banks, malls or office accommodation, he added.

He also justified the move by CMDA’s move to charge premium FSI charge at the rate of guideline value that was prevailing at the time of obtaining earlier planning permission instead of current guideline value. “It is a win win situation for both government and builders. They are atleast getting revenue from the building,” he said.

Interestingly, this could result in builders under the regularization scheme seeking guideline value prevailing at that time. Small builders say if the government can relax rules for CREDAI why not it consider the same for builders under the regularization scheme. “I have built the building when the guideline value was at previous rate and now they are charging the current guideline value. This is discriminatory,” they said.

Box:

PREMIUM FSI:

As per the Development Regulation (36), the Authority may allow Premium FSI over and above the normally allowable FSI subject to a maximum of 1 relating the same to the road width parameters as follows:

Sl.No.	Road Width	Premium FSI ( (% of normally allowable FSI)
1.	18 mts. and above	40%
2.	12 mts. to below 18 mts.	30%
3.	9 mts.to below 12 mts.	20%

          2.       The Premium FSI shall be allowed in the Chennai Metropolitan Area excluding Red Hills Catchment area restricted for development and area of water bodies maintained by the Chennai Metropolitan Water Supply and Sewerage Board for drinking water purpose. 

          3.       Additional benefit by way of Premium FSI accrued to the developer is related to the proportionate land extent as per the guideline value of the Registration Department.

          4.       In case where normally permissible FSI is 1.50, for every 1 Sq.m. of additional floor area constructed availing Premium FSI, proportionate land required will be 2/3 or 0.66 Sq.m.

          5.       In case where normally permissible FSI is 2.0 to 2.5, for every 1 Sq.m. of additional floor area constructed availing Premium FSI, proportionate land required will be 1/2  or 0.50 Sq.m., 2/5 or 0.40 Sq.m., respectively.  Accordingly, the land cost is collected based on the prevailing Guideline value as determined by the Registration Department.