Congress Accuses BMC of Aiding Rs 5000 Crore Real Estate Scam

Opposition Congress on Monday accused the Brihanmumbai Municipal Corporation (BMC), currently controlled by the administrator appointed by the state government, of aiding an alleged real estate scam worth Rs 5000 crore. The scam involves changing the No Development Zone (NDZ) tag of an 8.71 lakh square feet plot in a hilly area near the ecologically sensitive Sanjay Gandhi National Park (SGNP) to a Residential Zone (R-Zone).

Mumbai’s New Development Plan (DCPR-2034) was approved on May 8, 2018. According to government documents, this plot was marked as a ‘No Development Zone’ (NDZ) in the plan. On May 12, 2023, the land was reclassified as a Residential Zone (R-Zone) and was reserved as ‘Police Housing,’ said Lok Sabha MP and Mumbai Congress chief Varsha Gaikwad.

She alleged that not a single brick has been laid for the police housing. On June 20, 2023, DB Realty (now Valor Estate) participated in the tender floated by the BMC for Project Affected Person (PAP), whereby 13,347 PAPs (300 sq ft each) were to get houses under the Accommodation Reservation Policy. In return, it was to get land TDR, construction TDR, and credit notes.

Out of the entire area, 3.48 lakh sq ft has been reserved for police housing, while 5.23 lakh sq ft is for PAP houses. As per the rules, while implementing a project under the Accommodation Reservation Policy on a reserved plot, it was mandatory to implement the PAP project on the remaining area only after the reservation for which the land is reserved is built and transferred to the civic body. However, the rules have changed, and on August 17, 2023, the Urban Development Department approved simultaneous development, Gaikwad said.

As per the allegations, the cost of each PAP was inflated to Rs 58.18 lakh (including GST) from Rs 32.21 lakh (excluding GST), and an additional Rs 44 lakh as “viability gap funding” for each PAP was sought. The Mumbai Congress chief alleged that the builder has pocketed more than Rs 1000 crore through credit notes and land TDRs without laying a single brick.

The government should immediately cancel the Malad PAP project, recover all credit notes and land TDRs given to the builder in full, conduct a high-level inquiry into the entire scam in a time-bound manner, and take disciplinary and criminal action against every officer responsible for this loot, she demanded.

A senior official from the BMC said that the civic body does not change land use and only the Urban Development Department (UDD) is authorized to do so. An official from the UDD said that changing land use is not an unusual move. If there are any irregularities, we will look into it if we get an appropriate complaint, the official added.

When contacted, the real estate company said, The Malad (East) parcel, now owned by the Brihanmumbai Municipal Corporation (never owned by Valor Estate Limited nor a part of Borivali East National Park – SGNP), was reclassified by the Government of Maharashtra vide order dated 12 May 2023 for public purposes, namely police housing and project-affected persons (PAP) rehabilitation. Pursuant thereto, the Brihanmumbai Municipal Corporation issued a public tender and, on 11 October 2024, issued a Letter of Acceptance to a consortium for the construction and handover of approximately 13,374 PAP/affordable units on the said land.

This is a competitively tendered, public-purpose housing assignment for police and project affected persons, and not a private commercial development. Valor Estate Limited – a part of the consortium – and we categorically deny that Valor received any special or preferential treatment in this matter, it said.