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NICMAR GOA
SLUM REHABILITATION POLICIES
AND
BUSINESS MODEL
A Presentation on
National Institute Construction Management And Research GOA CAMPUS
Presented by
Chavan Abhilasha Pravin (G04105)
Patel Nirav Dineshbhai (G04131)
Rohit Rai (G04137)
Guided by
Asso. Prof. N. Ramesh Babu
NICMAR GOA
Slum Rehabilitation Policies And Business Model 2
Chapter Scheme
• Chapter 1: Introduction
1.1. Need for study
1.2. Objective of the Study
1.3. Scope of the Study
1.4. Methodology
NICMAR GOA
Slum Rehabilitation Policies And Business Model 3
Chapter Scheme
Chapter2: Present scenario
2.1. Demographic scenario
2.1.1 Indian demographic scenario
2.1.2. Maharashtra Demographic Scenario
2.1.3. Mumbai Demographic Scenario
2.2 Housing Scenario
2.3.Hosing efforts
2.4 Obstacles to housing efforts
NICMAR GOA
Slum Rehabilitation Policies And Business Model 4
Chapter Scheme
• Chapter 3: Slum Rehabilitation Policies In Maharashtra
3.1. Introduction
3.2. Evolution Of Slum Rehabilitation Policies
3.3. Policies
NICMAR GOA
Slum Rehabilitation Policies And Business Model 5
Chapter Scheme
Chapter 4: Slum Rehabilitation :Casestudy1
Tata Nagar , Mankhurd, Kurla, Land Development
Project
4.1. Introduction
4.2. Scheme implemented
4.3. Financial implications
NICMAR GOA
Slum Rehabilitation Policies And Business Model 6
Chapter Scheme
• Chapter 5: Slum Rehabilitation :Case study 2
– Mumbai Airport Rehabilitation Project , Kurla
5.1. Introduction
5.2. Scheme implemented
5.3. Financial implications
NICMAR GOA
Slum Rehabilitation Policies And Business Model 7
Chapter Scheme
• Chapter 6:Recomendations and Conclusion
6.1. Comparative Analysis
6.2. Recommendations
6.3. Conclusion
Bibliography
NICMAR GOA
Slum Rehabilitation Policies And Business Model 8
Contents
• Present Demographic Scenario• Present Housing Scenario
Introduction
Evolution of Policies
Various Policies
Unsuccessful Case study
Successful Case study
Conclusion.
NICMAR GOA
Slum Rehabilitation Policies And Business Model 9
Introduction
• Industrial revolution 1960’s
• Unplanned migration from rural to
urban areas
• Unbalanced economic development in
the country
2001 20300
100
200
300
400
500
600
700Urban Population Growth
Urban populationYear
Pop
ulat
ion
In M
illi
ons
25%
75%
Total Urban Population
Slums DwellersNon Slums Dwellers
Source: Census Of India 2001Source: Census Of India 2001
NICMAR GOA
Slum Rehabilitation Policies And Business Model 10
Wor
k/ E
mpl
oym
ent
Mov
ed w
ithHou
se ho
ld
Mar
riage
Mov
ed af
ter W
ork
Educa
tion
Busin
ess
Other
05
1015202530354045
Migration in Maharashtra
Reasons for Migration
Per
cent
age
of M
igra
tion
of
Tot
al P
opul
atio
n
NICMAR GOA
Slum Rehabilitation Policies And Business Model 11
Indian Demographic Scenario
Total population, slum population, and their percentage in municipal
corporation with population above 1 million in India 2001
City State Total
Population
Slum
Population
Percentage Slum
Population
Mumbai Maharashtra 11978450 6475440 54.1
Delhi Delhi 9879172 1851231 18.7
Chennai Tamilnadu 4572876 1485309 32.5
Kolkata West Bengal 4343645 819873 18.9
Bangaluru Karnataka 4301326 430501 10.0
Hyderabad Andhra Pradesh 3637483 626849 17.2
Ahmedabad Gujarat 3520085 473662 13.5
Source: Census Of India 2001
NICMAR GOA
Slum Rehabilitation Policies And Business Model 12
Mum
bai
Delhi
Chenn
ai
Kolka
ta
Banag
luru
Hyder
abad
Ahmed
abad
54.1
18.7
32.5
18.910
17.2 13.5
Percentage Slum Population in Major Cities in India
Percentage Slum Population
Source: Census Of India 2001
NICMAR GOA
Slum Rehabilitation Policies And Business Model 13
Maharashtra Demographic Scenario
Total population, slum population, and their percentage in municipal corporation
with population above 1 million in Maharashtra- 2001
City State Total
Population
Slum
Population
Percentage
Slum Population
Mumbai Maharashtra 11978450 6475440 54.1
Pune Maharashtra 2538473 492179 19.4
Nagpur Maharashtra 2052066 737219 35.9
Thane Maharashtra 1262551 351065 27.8
Kalyan-Dombiwali Maharashtra 1193512 34860 2.9
Nashik Maharashtra 1077236 138797 12.9
Pimpri Chichwad Maharashtra 1012472 123957 12.2
Source: Census Of India 2001
NICMAR GOA
Slum Rehabilitation Policies And Business Model 14
Mum
bai
Pune
Nagpu
r
Thane
Kalyan
-dom
biwali
Nashi
k
Pimpr
i chi
nchw
ad
54.1
19.4
35.927.8
2.912.9 12.2
Percentage Slum Population in Major Cities in India
Percentage Slum Population
Source: Census Of India 2001
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Slum Rehabilitation Policies And Business Model 15
Mumbai Slum Population Scenario
Percent Land Aquired Percent Population0%
10%20%30%40%50%60%70%80%90%
100%13
54
Chart Title
NonSlum Dwellers Slum Population
Source: Census Of India 2001
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Slum Rehabilitation Policies And Business Model 16
Scenario1
Need for Slum Rehabilitation
Development
Slums
Population growth
Increase in Slums
Failure of slum Rehabilitation policies
Development stops
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Slum Rehabilitation Policies And Business Model 17
Housing Scenario
• Need 20 million new houses
• Substandard housing units which need structural and sanitary
improvements.
33%
67%
Urban Dwellings
1 Room dwellings
Sufficient large dwelling
37%
63%
Rural Dwellings
Source: Census Of India 2001
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Slum Rehabilitation Policies And Business Model 18
Housing Shortage in India.
Year
1991 1996 2001
Urban 8.23 7.71 6.64
Rural 14.67 13.85 12.76
Total 22.90 21.56 19.40
Source: National Building Organization, Government of India.
Millions Of Housing Units required
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Slum Rehabilitation Policies And Business Model 19
Effect Of Housing Shortage: Scenario 2
Opportunity for Development of
construction industry
Slum increase/Decrease in
Development
Slum growth
Increased housing demand
Boom to housing industry
Opportunity for construction industry
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Slum Rehabilitation Policies And Business Model 20
Supply Of Formal Housing
1960s 1970s 1980s 1990s 2000s0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
Supply of Formal Housing
DemandSupply
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Slum Rehabilitation Policies And Business Model 21
Chawl•Permanent multistoried dilapidated buildings
Patra chawls
• Semi permanent constructions both authorized and unauthorized built with corrugated iron sheets.
Zopadpatties:
• Built with scrap materials by squatters in additioan there are pavement dwellers.
Mumbai Slums
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Slum Rehabilitation Policies And Business Model 22
Housing development
Housing development
Subsidized ownership Subsidized rentalOwners are not able to
recover
cost
Tenants
sometimes ask
large bulk of
money to
vacate the house
India so far has not
started any rental housi
ng indust
ry
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Slum Rehabilitation Policies And Business Model 23
Obstacles in Indian housing efforts
Development lots -extremely short supply and very
expensive.
Developable lands- small land holders ,difficult to acquire plot.
India is not encouraging
private large scale developers.
No Long term home mortgage
loans .Home
construction for sale and rental
apartment construction has not developed.
Rental housing is in extremely short
supply
Innovative technologies have
not developed.
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Slum Rehabilitation Policies And Business Model 24
Introduction
Till 1970• Demolition
of slums• As illegal
squatter
1970-1980 • Slum
improvement works
• Census of slums • Issue of i-cards
1980-1990• Slum upgradation
works• Lease to the slum
dwellers• Soft loans were
extended• Only on non-
reserved govt. Lands.
1990 till today• The underlying
land treated as resource.
• Incentive FSI for constructing tenements
• The profits generated used for cross-subsidizing the free houses
Evolution of slum development policiesAnd approaches
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Slum Rehabilitation Policies And Business Model 25
Effect of PoliciesUrban population living in slumsReduced from around 60% to 35%
Source: UN Habitat
NICMAR GOA
Slum Rehabilitation Policies And Business Model 26
Success Of Policies
Failed85%
Succeeded 15%
Success Of Policies
FailedSucceeded
Source: UN Habitat
NICMAR GOA
Slum Rehabilitation Policies And Business Model 27
Objective Of Study
The objective of this study is to develop and propose a
business model for slum rehabilitation.
.
NICMAR GOA
Slum Rehabilitation Policies And Business Model 28
Scope Of Study
The scope of this project is limited to study of various cases
and arriving at suitable financing strategy for appropriate
schemes in Maharashtra.
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Slum Rehabilitation Policies And Business Model 29
Methodology
To study the present demographic trends in regard of urbanization
Study History And Evolution of slum rehabilitation approaches
To Study Various Schemes And Policies
To Study Various Cases And Analyzing Their Success
Guidelines For Proposal
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Slum Rehabilitation Policies And Business Model 30
Need For Study
• Around 28% of Indian population lives in city. Around 1/3rd of that
population reside in slums.
• Understand the various policies.
• Sources of funds.
• Help to understand the failure of previous business model.
• Prepare business model for appropriate schemes.
• Zero slum development
NICMAR GOA
POLICIES
Slum Rehabilitation Policies And Business Model
31
NICMAR GOA
Slum Rehabilitation Policies And Business Model 32
1960’s
• 1967 & 1969:Special Slum Improvement Cell was
created in BMC ( Bombay Municipal Corporation )
– To clear and resettle slums on municipal lands
– To improve in the basic amenities like drainage, drinking water, roads
toilets etc
NICMAR GOA
. •In 1970 : Slum Improvement Program (SIP)
• To provide water supply, toilets, roads, drainage and streetlights for slum dwellers.
• The Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971:
• Where competent authority may by notification in the official Gazette,• Declare area to be ‘slum’ .
•The Maharashtra Vacant Lands (Prohibition of Unauthorized Structures and Summary Eviction) Act, 1975
• All lands encroached by squatters can be considered vacant,• All slums covered by the Act are temporary and can be removed,• Police can be mobilized for eviction and alternative accommodation has to be provided.
1970’s
NICMAR GOA
• Slum Upgrading Programme (SUP) funded by the World Bank, 1985
• World Bank’s Rs 53 crore Bombay Urban Development Project (BUDP)
• With Programmes –
– The Slum Upgradation Programme (SUP)
– And the Low Income Group Shelter Programme (LISP).
• The Prime Minister’s Grant Project (PMGP), 1985
– This is to improve living conditions of slum dwellers in Mumbai.
1980’s
NICMAR GOA
• Slum Redevelopment Scheme (SRD), 1991
• The Slum Redevelopment Scheme of the SRA aimed to provide enough
incentives
– Such as increasing the Floor Space Index (FSI) allowed in slum areas
– The ability to transfer development rights to other areas of the city
– For private developers and builders to redevelop slums.
The theory was that by selling the extra space in the open market,
tenements for slum dwellers would be cross-subsidized and made
affordable to them.
1990’s
NICMAR GOA
Slum Rehabilitation Scheme (SRS), 1995
– After the change of government, the Afzalpurkar Committee further modified the
SRD and the new scheme was called Slum Rehabilitation Scheme (SRS).
Departures from previous policies were made on various levels.
The scheme was opened to all slum dwellers included in the 1995 electoral
rolls, including pavement dwellers.
The carpet area of tenements was increased to 225 sq. ft. (approx 20 sq.
m.). The tenements were to be given free of cost to slum dwellers.
For every 10 sq. ft. (1 sq. m.) of rehabilitated floor space constructed in
the Island City, the builders were offered a free sale component of 7.5 sq.
ft. (0.5 sq. m.).
1990’s
NICMAR GOA
• In 2000’s: Govt-NGO Partnership in Slum Resettlement
A major resettlement of about 60,000 people was carried out with popular
participation and partnerships with NGOs in the recent past for the
Mumbai Urban Transport Project (MUTP).
2000’s
NICMAR GOA
Slum Rehabilitation Policies And Business Model 38
Case study 1
NICMAR GOA
Slum Rehabilitation Policies And Business Model 39
Project Land development at Mankhurd Kurla
Project assignee MMRDA ( Mumbai Metropolitan Regional Development Authority)
Project implementing authority
MUIP (MumbaiUrban Infrastructure Project)
Project executed by Akruti Hiranandani joint venture
Location Village Mankhurd, Taluka Kurla, Mumbai Suburban district
Total area 62091.30 sq.ms
Tata Nagar , Mankhurd, Kurla, Land Development Project
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Slum Rehabilitation Policies And Business Model 40
• Project Schedule:
Date Event
17.11.2003 Commencement Certificate Received
17.11.2003 Work Commenced
09.12.2003 Plinth Certificate Received
08.07.2005, 21.12.2005 Project Completed
28.12.2005 Houses Constructed Handed Over to MMRDA
23.01.2006 Allotted by MMRDA to RAP in public function
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Slum Rehabilitation Policies And Business Model 41
The Details Of The Constructed Area
Max BUA permissible(iii) Non CRZ area (9 x10 a)(iv) CRZ area ( 8 x 10b)Total ( I+ii)
87993.624651.4992645.11
Prop BUA on plot for rehab including staircase, lift, lift lobby area as per approved building plans
92207.72
Area of B/W, W/C & S/O & passages as per approved building plans
3503.88
No. of rehab tenements of size equivalent to 20.90 sq.m 3736
No. of B/W, W/C & S/O 104
NICMAR GOA
42Slum Rehabilitation Policies And Business Model
During the F.Y. 2005-06 (A.Y.2006-07) on Completion,
Gross Profit Rs. 51,06,27,772/-
Cost of Project Rs. 51,06,05,521/-,
Resulting in Total Income Rs. 22,251/-
As on 31st mar 2006
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Slum Rehabilitation Policies And Business Model 43
Reasons of Failure
• Total area for development: 81,046 sq.mts.
• Total built up area of commercial units : 11,161.07 sq.mts.
(1,17,800 sq.ft.)
According to the Assessing Officer, as the provisions of section
80IB(10)(d) as applicable w.e.f. 1-4-2005, the limit for having
commercial space in the housing projects is 5% of the total built up
area or 2000 sq.ft. whichever is less
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Parameters Conditions as per Section 80IB (10) Facts in the Case of the Assessee
1 Date of approval should be before 31.03.2007 Approved on 10.09.2003
2 Date of commencement
Should have commenced after 1. 10 1998 Commences in December 2003
3 date of completion should be completed by 31.03.2008 or four years from the end of the financial year in which approval was given, if the same was given after 31.03.2004
Completed on 21.12.2005
4 evidence of completion
Full occupation certificate issued by local authority
full occupation certificate received by the assessee on 21. 12.2005
5 Size of plot 1 acre 46881.01 sq m ie around 10 acres
6 Size of each unit 1000 sq.ft if located in mentors and 1500 sq.ft elsewhere
Each residential tenements is of 225 sq.ft.
7 Size of commercial spaces
5% of the total built up area or 2000 sq. ft whichever is less
More than 1 lakh sq. ft.
8 Whether notified by the board or not
Slum rehabilitation schemes notified by the board are exempted of the conditions of completion and size of the plot
Not notified by the board
NICMAR GOA
Slum Rehabilitation Policies And Business Model 45
Case study 2
NICMAR GOA
Slum Rehabilitation Policies And Business Model 46
MIAL : Mumbai Airport Rehabilitation Project
Project Land development at Kurla
Project assignee SRA ( Slum Rehabilitation Authority)
Project implementing authority
MIAL ( Mumbai International Airport Private Limited)
Project executed by HDIL (Housing Development And Infrastructure Limited)and GVK
Location Airport vicinity, Bandra
Total area 276 Acres
Rehabilitation of 82,500 Families
Granted FSI 4
NICMAR GOA
Slum Rehabilitation Policies And Business Model 47
Distribution Of Shares
Mumbai International
airport
GVK ( 76% shares)
GVK
slum rehabilitation
HDIL
slum rehabilitation
Phase1 Pashe2 Phase3 Phase4
MIAL ( 24% shares)
NICMAR GOA
Slum Rehabilitation Policies And Business Model 48
Total area for development 276 Acres Airports; 158
Rehabilitation; 118
Airports; 158HDIL; 65
GVK; 53
MIAL : Mumbai Airport Rehabilitation Project
NICMAR GOA
Slum Rehabilitation Policies And Business Model 49
Phase1
Rs. 1900 cr Land
Cost 53 Acres Land
38 Acres
Slum Rehabilitation
15 Acres
Commercial Purpose
NICMAR GOA
Slum Rehabilitation Policies And Business Model 50
Financial Source For The ProjectT
DR Rights costing
Rs 3000/ sq. ft - Rs 3250/ sq.ft
Res
iden
tial
Upf
ront Advanced
booking during Phase-i worth Rs 5000 cr.
FD
I From US and Europe,
10%Dilution of control.
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Slum Rehabilitation Policies And Business Model 51
• Location: map•Major potential for slum
rehabilitation and
development
•Major investment in
infrastructure in the region
MIAL : Mumbai Airport Rehabilitation Project
NICMAR GOA
Slum Rehabilitation Policies And Business Model 52
•Largest rehabilitation scheme
in India
• Rehabilitation >1 million
people
• Generation of more than
10000 jobs over next few
years
MIAL : Mumbai Airport Rehabilitation Project
NICMAR GOA
Slum Rehabilitation Policies And Business Model 53
SRS projects with low slum density can avail FSI up to 3.0x, while high density projects can avail FSI of 4.0x
Developers can execute SRS only on getting consent from at least 70% of the slum owners.
During the slum rehabilitation period, the developer can construct and sell free sale area available to him as part of the SRS scheme with a cap of 90%.
. Source: SRA
MIAL: Incentives
NICMAR GOA
Slum Rehabilitation Policies And Business Model 54
NICMAR GOA
Slum Rehabilitation Policies And Business Model 55
Particulars Sealable area
Phase 1
Phase ii
Phase iii
Remarks
Mn sq.ft.
Land TDR 8.9 2.6 2.7 3.6 (82500 (families)x269sqft x1.2 (loadings)/4)
Construction TDR
35.4 10.3 10.7 14.4 82500 (families)x269sqft x1.2 (loadings)/1.33(FSI)
FSI at Airport site
9.9 9.9 65 acres x 2.5 (FSI) x1.4 ( Loading)
Total 54.2 12.9 13.4 27.9
Source: Company, Angel Research
HDIL’s Saleable Interest from MIAL Project.
NICMAR GOA
Slum Rehabilitation Policies And Business Model 56
Financial Impact
2007 2008 2009 2010 2011 2012
Gross sales
1214 2395 1750 1479 1775 3106
Net sales 1214 2395 1750 1479 1775 3106
Total operating income
1214 2395 1750 1479 1775 3106
EBIT 620 1568 798 680 682 1602
PAT 548 1410 677 590 734 1310
% of Sales 45.1 58.9 38.7 39.9 41.4 42.2
Source: Company, Angel Research
All figures in Crore Rupees
NICMAR GOA
Slum Rehabilitation Policies And Business Model 57
ConsiderationsThere is possibility of increasing FSI in suburbs from 1x to 1.33x which will Impact TDRvolumes and thereby prices negatively
Fall in TDR prices
Over-dependence
on MMR
Delay in execution
Long gestation
SRS projects
•Mumbai property prices have gone up by 20-30% from its low.• With MMR accountingfor 87% of HDIL's saleable area, any decline in demand or prices could impact our NAV
•As the company follows project completion method to book revenues we expect substantial jump in Revenues in FY2012E.
•Any delay in executionwill impact our estimates and in turn our NAV.
• SRS has long gestation period
•Any delay in above processes could increase project costs and delay in sales from project FSI, creating a cash trap
NICMAR GOA
Slum Rehabilitation Policies And Business Model 58
Comparative analysis
Tata Nagar MIAL
No consideration for fall of TDR prices Consideration for Fall in TDR prices
Over-dependence on MMR No Over-dependence on MMR
No Consideration for Delay in execution Consideration for Delay in execution
No Consideration for Long gestation SRS projects
Consideration for Long gestation SRS projects
No proper planning removing above flaws
Proper Pre-Planning
Socio-cultural imbalance Social considerations
NICMAR GOA
Slum Rehabilitation Policies And Business Model 59
Conclusion:
By studying various Slum rehabilitation policies and cases it is
clear that, along with appropriate policies socio- cultural
considerations and financial strategies are the foundation for
the successful business model of slum rehabilitation projects.
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Slum Rehabilitation Policies And Business Model 60
Bibliography
1. Woods Robert, “Slums and Sustainable Development”, International conference
on habitat and sustainable development vol-1” dec-97, New Delhi.
2. Das, Amiyakumar, “Urban Planning In India”, Jaipur, Rawat publication 2007
3. Spence, Michael, Annez, Patricia Clarke, Buckley Robert.M. “Urbanization And
Growth- Commission On Growth And Development”. Jaipur, Rawat Publication-
2010.
4. Cherunilam, Francis, “Housing In India”, Himalaya publishing house, Delhi
1987
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Slum Rehabilitation Policies And Business Model 61
Bibliography
1. http://www.sra.gov.in/
2. http://propertybytes.indiaproperty.com/index.php
3. http://www.theglobeandmail.com/report-on-business/
mumbais-slums-reach-for-the-sky/article1889462/
4. http://www.hdil.gov.in/
5. http://www.mial.gov.in/
6. http://www.altlaw.org/
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Slum Rehabilitation Policies And Business Model 62
Thankyou!!!
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