MHADA Loses 1,000 Crore in Redevelopment Project

The Maharashtra Housing and Area Development Authority (MHADA) is expected to have lost close to Rs. 1,000 crore in a redevelopment project in Goregaon (West), according to its internal audit. The redevelopment was pertaining to the Patrawala Chawl, a MHADA colony in Siddharth Nagar, Goregaon (West).

The chairman of housing board’s repair and reconstruction board stated that financial hit was damaging for the housing board, and has now requested MHADA to cancel the permission given to Guru Ashish Constructions for redevelopment, which is the redeveloper of the chawl. The repair and reconstruction board claimed that the firm had appointed Housing Development & Infrastructure Ltd (HDIL) as its project management consultant.

Redevelopment of the chawl

Patrawala Chawl is a MHADA colony in Siddharth Nagar and is spread across 40 acres. It has about 675 tenants in the colony. MHADA had awarded the chawl redevelopment project to Guru Ashish Constructions in 2007. The project involved redeveloping and rehabilitating all the 675 chawl tenants.

The allegation

The repair and reconstruction board alleged that it found certain irregularities in the project which has caused severe problems for the tenants. It alleged that though Guru Ashish is the official developer, the entire project is being handled by HDIL. It is believed that HDIL has in turn sold some developable space to builders such as Ekta Group through sub-lease agreements. This was done even before all the tenants of the chawl were completely rehabilitated in a new building.

The developer was alleged of delaying the project though the permissions for redevelopment were given as early as 2007. MHADA had granted the developer a time extension and extended the letter of intent (LOI) despite delays. In 2010, the then vice-president of MHADA had raised objections over the delay in work and canceled the LOI as the work did not commence. It had also received complaints that Guru Ashish had sold the contract to HDIL. In 2011, the housing board again renewed the agreement when the developer claimed that HDIL was just a project management consultant for the project.

The repair and reconstruction board has further claimed that MHADA is yet to get its share of 300 transit accommodations.