Plug and play for Real Estate projects

Unshakling Real Estate through plug and play system

The FM in his budget for FY 2015-16 has introduced concept of plug and play projects in the power sector where all approvals will be in place before a project is allowed to be bid for. This represents an understanding and, perhaps, acceptance of the hard reality that projects take years to navigate through the maze of approval systems, often being doled out by people who do not understand the complexities of the project and who have no stake, whatsoever, in the project and its viability/necessity etc. Just for example the project may have been designed by highly qualified architects yet the plans get scrutinized by people with little or no knowledge of architecture. The fact only mechanical scrutiny is to be done and they have power to delay places them in a position of superiority. Same is case with other approvals including, if one may dare to say so, environment clearances. We have instances of each building requiring clearance from the air-port authority even when taller buildings are already existing in neighborhood. All these are following a pattern without any thought for change or desire to improve and facilitate.
Can this current provisions of getting clearances be changed? Should it be changed? Will it benefit the society? Will it allow better delivery more compliance? Answer to all these questions is a big YES.
All those involved in the business of developing real estate are well aware of the numerous approvals that are required to be obtained before a project can be taken to execution stage. Some of these are- Plan approval from concerned local body or TCP department, Environment clearances, approval from fire department, approval from PCB, Approvals from mining department in case you are digging a basement, Airport Authority, labour department and then there are people who will be coming during construction like sales tax, income tax, labour, ESI, EPF and so on. After having been in the business of making buildings for nearly 38 years I can say with full conviction that all these approvals, inspections are not contributing to better compliance of laws or a better & efficient product. What this does lead to is  considerable delays, corruption and an attempt to bye pass many of these requirements by manipulation.
So the question is can we have a different system? As I said yest we can and at the least give it a try. Here is my take on how it can be managed or put in place.

• Start by licensing the real estate developers based on their financial and technical competencies. The process HAS to be online with no manual interface. All that the Developer needs to establish is the credit worthiness through banks, credentials of his technical team, which can be linked through the Aadhar number of the concerned people or his desire to retain a PMC for the project
• Since no real estate project can be taken up without land and trunk infrastructure and in places which have already been declared fit for development half the job is already done. The Authority which develops the 'Master Plan' can be tasked to define the parameters which each individual project will have to comply with such as permissible FAR, Density, minimum/maximum sizes ( though this should really not be done), heights, ground coverage, water requirements, green area requirements-detailing which and how many trees should be planted as is asked by env. approval committees, amenities and facilities required to be provided etc. These should be published clearly and the project proponent asked to comply with. Since all projects are designed by licensed Architects it should be mandated on them that these are NOT VIOLATED. In case of any violation the project should be scrapped and heavy penalties imposed and if the Architect failed to report these then action should be taken against him as per the provisions of the Council of Architecture guidelines. What this proposes is that NO application need to be made for obtaining any approval and the onus to comply with the requirements is passed on to the promoters and professionals. To ensure compliance we could introduce a system of licensed 'commissioning agents' as exists in many places whose responsibility to certify that the project complies with all requirements. The system of commissioning agents will help in reporting compliance and ensuring that quality product gets delivered.
• Plug and play requires not only prior approvals BEFORE a project is started it also requires easy and quick connections to trunk services such as electricity, sewerage, water supply, drainage, roads etc. Where sectors have been earmerked for development in places like Gurgaon, Faridabad etc. why can we not have these services in place before? Why must onus lie on developer to approach the service providers? Why can the service provider not be mandated to supply the service and ensure that the end user is not discomfited? It can be done and it should be done. All it needs is a will power to implement.
• Another crucial component of plug and play will have to be payments required to be made for various services, approvals compliance etc. All that we need to do is put in place a list or schedule of payments that are to be made and payments must be made in one shot through a single window. let the distribution of the monies so received be distributed to concerned departments authorities by the concerned Government. What this will ensure is reduction or elimination of interface by the project developer with various departments thus reducing harassment and corruption. It will also ensure clear and clean collections by the Government.

None of the suggestions that I have proposed above are such as that cannot be implemented or which will lead to unregulated developments. All that we need is a desire to change and a realization that construction and real estate can act as catalysts for stronger economic development.
In the end I have request to make to all who might read this. If you think the suggestions made are reasonable let us try and spread this thought around and see if we can get things to change