The recast plan for Mumbai is set to get a fillip with the World Bank agreeing to provide a helping hand. It has asked the state to specify the modalities of the fund flow.
The state government in a two-pronged strategy has sought the WB's backing (read guarantee) for its market borrowings and also asked for a low coupon rate loan of around $one billion for projects to be taken up by the private sector.
The private sector is expected to fund most of the infrastructure projects that will transform the city into an international megapolis.
However, a portion of the project cost will have to be financed by the state government to make the project more feasible for the private sector to recover costs later through toll rights.
Confirming this, a government official told Business Standard, "Even on Saturday, the WB team held consultations with us where it expressed satisfaction on the progress of the city recast plan."
A senior WB official Christopher Push was expected in Mumbai so that the bank's nominee on the panel for preparing the business plan may begin its work. The business plan for Mumbai city's recast is expected to be completed by June 2005.
As per the WB estimates, $50 billion can be easily attracted for the city's modernisation, mostly from private sector.
The panel for preparing the business plan has been decided by the state government. It includes the commissioners of Mira-Bhayander, Kalyan, Dombivali, Thane and Navi Mumbai municipal corporations as per the WB wishes.
In addition, the Mumbai municipal corporation, Indian Railways, non-governmental organisations, Mumbai Metropolitan Regional Development Authority also have representatives on this panel.
The World Bank is also keen that the state government acts quickly to initiate reforms by repealing the Urban Land Ceiling Act, rationalising the Rent Control Act and permits a much higher floor space index for commercial construction (between five and 10) while FSI for residential projects from 1.33 to 2.
The World Bank team has suggested that huge tracts of privately held mill lands, Bombay Port Trust land, salt pan land, railway land, besides land holdings currently locked under the Coastal Regulation Zone stipulations and No Development Zone be brought to the market.
This will not only result in checking skyrocketing real estate prices in the city, but also lead to cheaper housing options becoming available, the WB mission said.
It also felt that the city no longer plays the catalytic role of development but actually boasts of the most expensive markets for real estate.
According to the World Bank, Mumbai is expected to witness an additional influx of 38 lakh migrants between 2001 and 2021. In order to cater to the resulting housing demand, the mission has sought a rationalised increase in the FSI stipulations in Mumbai.
While currently 1.33 is the permitted FSI for both residential and housing construction in the city, the bank has recommended a sharp increase of the FSI to 2 for housing projects, and as much as between 5 and 10 for commercial property.