Tuesday, November 26, 2013

Food licensing goes online in Maharashtra

AURANGABAD: The Maharashtra Food and Drugs Administration's (FDA) system saw an online launch on November 22, equipped with software for processing applications for food and beverage licensing. With this smart turn towards the Internet, heaped files at FDA offices will now be history.

"The FDA has gone online from November 22, all over the state. The status of hoteliers, traders and food joints who had earlier registered with the FDA and the food business operators who have procured licences according to the Food and Safety Act 2006, will be uploaded on the website www.fssai.gov.in," said Chandrashekhar Salunke, FDA joint commissioner (Food), Aurangabad division.

Salunkhe said that one can now apply for registration and licences at the click of a mouse. "This would help speed up the process and maintain complete clarity and smoother functioning on both sides throughout the process," Salunkhe told a news conference on Tuesday.

FDA assistant commissioner (Food), Aurangabad division, M D Shah said, "As per the Food Safety and Standards Authority of India (FSSAI) 2006, food business operators need to apply for renewal norms for licences one month before the expiry date."

"An operator would procure his/her licence within 60 days{why 60 days?why not 6days?delay may increase corruption} of the online application. Moreover, operators can also check the status of applications online and will receive alerts regarding renewal date and licence status," Shah said.

"Till now, 8,185 registrations and 4,365 licences have been issued manually in Aurangabad district. All these records will soon be available online. Food business operators with business worth less than Rs 12 lakh per annum have to register themselves with the FDA and if the annual business is more than Rs12 lakh, they have to obtain a licence from the FDA," said Shah.

No takers for 1.3 lakh flats in Mumbai, says report

MUMBAI: The city's residential market is in dire straits with 1.30 lakh unsold flats, while another 2.90 lakh homes are under construction, reveals a report.

A Knight Frank India Mumbai realty market research report released on Tuesday said the unsold inventory level in the Mumbai metropolitan region is almost 44%. Around 47,488 apartments were launched between January and September, a considerable 28% drop compared to last year.

Due to the weakening demand, the residential market will require over two years to exhaust the existing unsold inventory, the report stated. Shishir Baijal, chairman and managing director of Knight Frank said the rise in interest cost and decline in net profits during 2013 will compel developers to lighten inventory load and deleverage their balance sheets.

"Demand however, is likely to remain subdued over the initial part of 2014 as the market continues to bottom out against the backdrop of a sluggish economy," he added. The launch of new residential projects plummeted over 40% compared to peak levels in 2010. Approximately 47,488 units were launched during the January-September 2013 period; a considerable 28% drop compared to last year.

Interestingly, 34% of the projects were launched in Ambernath, Bhiwandi, Mumbra and Karjat. About 19% projects commenced in the Virar-Palghar stretch, 18% in Navi Mumbai, 10% in Bandra, Andheri, Goregaon, and a measly one per cent in south Mumbai. "The Navi Mumbai story lost some momentum as its share of units launched dropped 18% in 2013 from 22% last year. Inordinate delays in the execution of major infrastructure projects such as the new airport and Trans-Harbour link coupled with comparatively dearer inventory have caused a lull in market activity," the report mentioned. It predicts that a price correction is on the anvil as there are no takers for premium projects. "Developers are looking to tap into the largest chunk of buyers seeking apartments priced up to Rs 75 lakh. An estimated 74% of units under construction today are targeted at this price,'' it said.

"In a bid to liquidate their higher priced inventory, developers have been open to in the premium segment, to reduce prices up to a maximum of 25% in favour of a sizeable up-front payment," said the report. For instance, prices in some south and central Mumbai locations like Parel and Mahalaxmi have declined close to 10% over the previous three quarters. "Unsold inventory pressure in Mumbai is the highest among all other cities and is depicting a growing trend. We expect a more pronounced price correction which may drive the market to a better equilibrium," said Samantak Das, chief economist, director- research and advisory services, Knight Frank India.

Friday, November 22, 2013

SC orders elite Willingdon club to take BMC's eating house licence

MUMBAI: Putting to rest a two-decade-old dispute, the Supreme Court earlier this week ruled that the elite Willingdon Sports Club has to obtain a BMC 'eating house' licence for the food its serves its members.

A division bench of Justices G S Singhvi and V Gopala Gowda struck down a Bombay high court verdict and gave the club four weeks to apply. It added that the BMC was free to impose penalty on the institution for failing to take a licence and asked the club to shell out Rs 50,000 as litigation cost.

The order is likely to have a cascading effect on other exclusive clubs in the city, mainly requiring them to apply to the BMC for an eating house license.

"The object of incorporating the requirement of a licence for an 'eating house' or 'catering establishment' is to ensure that public hygiene is maintained at the place/premises where the food is prepared and/or supplied for consumption. It is also intended to ensure safety of the people engaged in the preparation of food and supply thereof as well as all those who consume the articles at the particular place/premises," said the judges.

Willingdon club had argued that it did not need the license because its main activity is providing sporting facilities to its members, and the catering facilities were incidental. It added that its services were exclusively for its members and not for the general public.

The Bombay high court in 2009 upheld this contention and ruled that the club was not required to take an eating house license.

The apex court, hearing a BMC appeal, did not agree. It said the club's catering facilities fell within the definition of eating house in the BMC Act and members of the club came within the term "public".

"No doubt the primary activity of the club is to provide sporting facilities to the members, but the supply of food is an integral part of such activity and the catering department of the club satisfies an essential component of the facilities provided by the club," said the judges.

"Not only this, many join the club in the name of availing sporting facilities only for the purpose of spending their time in leisure and for enjoying the facilities provided by the catering department of the club. Thus, even though profit may not be the motto of catering facilities provided by Willingdon Club, it certainly gains by these facilities," the court added.

The dispute goes back to 1990 when the BMC asked the club to get the licence. 
Letters passed between the corporation and the club, and the later also deposited Rs 2.7 lakh. In 1999, the BMC insisted on the licence and asked it to pay a further Rs 1.2 lakh. The club challenged the notice in the high court and won the first round before the SC accepted the BMC view.

New cluster plan to include illegal flats

MUMBAI: Occupants of unauthorized flats and shops will be legally rehabilitated as part of the state government new cluster redevelopment policy. Critics said this sop is a virtual indictment of the government, which has failed to curb illegal constructions.

TOI has learnt that the government plans to offer rehabilitation area of 250 sq ft to 700 sq ft premises to all such occupants.

These residents will have to bear the cost of construction and there will be no incentive for the developer for rehabilitating them, said sources.

Congress MLA Amin Patel from South Mumbai who has the maximum number of old and dilapidated buildings in his constituency said the government has to accept that there has been a systemic failure. " "We cannot throw them out. Where will they go? We need to rehabilitate else the planned development of the city cannot happen,'' he said. The Campa Cola society is a glaring example of the systemic failure.

The cluster redevelopment policy was formulated post-2005 floods when a number of old and dilapidated buildings crashed. The state government then decided to take up block redevelopment rather than single buildings that were resulting in a very skewed development of the city. However, the 2009 policy did not find many takers and now the government is drawing up a fresh policy to replace the earlier one. This is likely to apply across the city.

Like in case of slum-dwellers, here too there will be a cut-off date. "The debate is should it be January 1, 1995 as for all slums or January 1, 2000 as for slums on land meant for vital projects like Dharavi, the airport and the Mumbai Urban Transport Project or should it be 2011 wherein slum-dwellers who have bought pre-1995 structures as late as 2011 are to be considered eligible on payment of a transfer fee.''

Sources said the new cluster redevelopment policy was submitted to chief minister Prithviraj Chavan on Thursday by the urban development department. "It is likely that he may approve it by Saturday,'' said sources.

Amongst the incentives of residents is a minimum rehab flat of 323 sq feet or 30 sq metres if the cluster rehabilitation is limited to one acre. "But if it is a mega-cluster then depending on the size of the plot the incentive will go up by 10%, 15% to a maximum of 25%. Along with fungible fsi, the flat size can go up to 545 sq feet,'' said sources.

The government will also relax the condition on property ownership for redevelopment from 100% to 70% . Similarly 70% of tenants will need to give consent. Patel who had proposed the change said the government has conveyed it will accept the proposal.

Unlike the old policy where the government had no role to play in land acquisition, under the new policy it will step in and aid in acquiring the remaining 30% of land.

The BMC as planning authority will draw the boundaries of each cluster thereby ensuring that the city gets its infrastructure and public amenities. The cluster redevelopment will be detailed in a Urban Renewal Scheme master plan along with the civic Development Plan and a comprehensive plan for every cluster. Each of these plans have to merge into each other so that there is planned development of the city, said sources.

Once the Mumbai plan is approved the governme

Dabhol lies idle but consumers continue to pay

NAGPUR: The Union ministry of power (MoP) has suddenly woken up from its deep slumber over the 1,980 MW Dabhol plant lying idle since July 15 as banks have sounded an alarm over a massive loan default. Ratnagiri Gas and Power Private Limited (RGPPL), the company that runs the plant, collectively owes Rs8,500 crore to ICICI Bank, IDBI Bank, SBI and Canara Bank.

However, the state government has never taken up the issue with MoP even though MSEDCL consumers are paying around 17 paise per unit for a plant that is not generating a single unit of electricity. The consumers are effectively paying over 19.5 paise per unit due to electricity duty. The state government is pocketing this 2.5 paise per unit amount. Interestingly, MSEDCL, which is collecting this money from consumers, is not passing it on to RGPPL, which has complained to MoP in this regard.

This is not the first time that consumers are being unnecessarily penalized for the jinxed plant. They had paid a surcharge of 35 paise unit for four months from December 2009 to March 2010 to meet extra Rs650 crore maintenance cost of Dabhol.

Even otherwise Dabhol power has almost been the costliest for MSEDCL. According to MSEDCL official if the plant functioned at full capacity then the price of power would have been around Rs3.75 per unit (at earlier Reliance gas price). "However, when it functions at only one-third capacity it increases to Rs5.81 per unit. This shows that whenever the generation reduces the power rate goes up because the fixed cost remains the same."

The 17 paise per unit surcharge was finalized by Maharashtra Electricity Regulatory Commission (MERC) in the tariff order for 2012-13. RGPPL was to be paid Rs1,854 crore as fixed charges by MSEDCL in addition to variable charges that depend on fuel cost.

Dabhol needs 8.5 mmscmd (million standard cubic meters per day) gas for running at full capacity of 1,800 MW. However, the supply from Reliance' KG basin has been dwindling continuously and now has stopped completely. The plant can't be run on imported gas because it is far costlier and will make power rate too high.

RGPPL is in bad financial shape.[Ratnagiri Gas and Power Private limited (RGPPL] It incurred a loss of Rs1,156 crore in 2012-13 as the generation was less by over 9,000 million units (MUs) than the target. This is up from over 3,000 MUs in 2011-12.

Sunday, November 17, 2013

Mhada ‘gifts’ newly repaired society to builder for redevelopment

MUMBAI: For a nominal premium of Rs 165 crore, Mhada, the state agency entrusted with providing affordable homes, has allowed a builder to redevelop a Worli housing society with a development potential of around Rs 2,000 crore. The buildings were repaired and painted three years ago, but the Maharashtra housing and area development authority still declared them dilapidated so that the project could be pushed through to procure a much higher FSI since the plot falls under coastal regulation zone (CRZ II).

Mhada's role in the Shivshahi cooperative housing society case raises questions about whose interests the housing authority has at heart: economically weaker flat-buyers or influential developers. In 2010, Shivshahi CHS, comprising 192 flats allotted to low-income families in 12 buildings, awarded the redevelopment rights to Wonder Value Realty, a joint venture floated by HBS Realtors and IL&FS.

Earlier that year, a Mhada policy had scrapped the premium option and instead made it mandatory for it to receive a proportionate share in the built-up area from the builder when such properties are redeveloped. But the housing authority did not insist on its share: at least 600 new tenements for economically weaker sections (EWS) in a prime area like Worli. "This has caused a huge loss to Mhada, whose basic principle is to create housing stock for the common man,'' said sources.

Responding to TOI's query as to why it let go of its share, Mhada CEO Satish Gavai said, "Your information is maliciously incorrect on fact and law.''

R B Mitkar, Mhada's resident executive engineer, said the builder's proposal was received on August 18, 2010, just before the new policy stipulating sharing of built-up area came into force. "The Mumbai board approved the proposal as per the earlier premium policy,'' he said.

Yet, documents including official file notings made available to this newspaper show that the proposal was submitted to Mhada on December 23, 2010—several months after the revised policy was introduced. In fact, on the same day Shivshahi housing society wrote to the chief officer, Mumbai board, proposing to redevelop the property under development control regulation 33 (5).

Also, the modified CRZ notification of January 2011 stipulates that only buildings declared dilapidated are eligible for a floor space index of 2.5 FSI for redevelopment in CRZ areas. All other redevelopment projects for Mhada colonies in CRZ II are entitled to 1.59 FSI.

In an email reply, Kayvanna Shah, CEO of Wondervalue Realty, said, "Mhada cannot undertake redevelopment of an ownership society like Shivshahi without the express consent of the society. There is no provision in law where Mhada can unilaterally decide to become a developer of an ownership society without their express consent. Therefore, there is no question of Mhada generating 600 EWS flats from the society.''

Asked why the buildings were declared dilapidated despite being repaired recently, Shah said, "Dilapidation is an existing established state of the building. However, they had to be repaired partially to be made habitable, for the safety of the existing members of the society since prevention is better than cure.''

The three-acre land on which the Shivshahi society stands, was leased to Mhada by the municipal corporation for 999 years for building EWS tenements for industrial workers. The buildings came up in 1950.

Shivshahi is just one of the five societies in the 34,000 sq m (8.5 acres) Mhada layout. Of this, Shivshahi occupies about 12,325 sq m (3 acres). Sources said open spaces and recreation ground belong to all the five societies. Yet, the FSI generated from these common areas was parcelled off to the developer by Mhada. "This additional FSI belongs to all societies within the Mhada layout and not just Shivshahi,'' they said. TOI has learned that as a result, the construction permission is a phenomenal 9.57 times the plot area.

Residents decided to go in for redevelopment by inviting tenders from builders in April 2004. Since then, it is alleged, several state politicians were interested in this property because of its prime location.

The plot thickens

Shivshai CHS At Worli

Society Plot Area: 12,325 sqm

Total FSI On Plot: 30,814 sqm

Market Rate In Worli: Rs 40,000 to Rs 60,000 a sqft

Mhada Gets Premium Of Only: Rs 165 crore

Estimated Loss: 600 Affordable Homes

Saturday, November 16, 2013

farmers loan suicides \/s Rs 1 lakh crore bad loans of corporates written off

Rs 1 lakh crore bad loans of corporates written off: RBI


Banks have sacrificed over Rs 1 lakh crore by writing off bad loans to corporates, data collected by RBI reveals.
MUMBAI: Data collected by Reserve Bank of India over a period of one year blows the lid off what goes as loan classification in banks. In a presentation at the annual bankers' conference, RBI deputy governor K C Chakrabarty showed how banks have sacrificed over Rs 1 lakh crore by writing off bad loans to corporates, which is much higher than Union finance minister P Chidambaram's farm loan waiver in 2008—a move that received flak from the industry.

Under the Debt Waiver and Debt Relief Scheme, 2008, the Centre had waived off around Rs 60,000 crore to farmers.

"In the last 13 years, banks have written off 1 lakh crore and 95% of these are large loans. Everyone talks of the farm loan write-off, but it is the medium and large enterprises segment that has a 50% share in NPAs," said Chakrabarty.

The deputy governor flayed banks for using 'technical write-offs' to reduce their non-performing assets (bad loans) over the years. Technical write-off is a process adopted by banks whereby they take a hit on their profits and stop including the defaulting loan in the list of those from whom repayments are due. It is called a technical write-off because although banks do not show these loans as receivables in their books, they continue to pursue recovery in courts or other forum.

A technical write-off enables banks to claim that they do not have any bad loans on their books by fully providing for the loans from their earnings. It also reduces their tax outgo.

Chakrabarty also raised the issue of restructured loans—advances where potential defaulters are given more time to repay without being called defaulters. "Restructuring of loans with retrospective effect has killed credit quality in banks," he said. He warned banks that the leeway might not be available in future.

"We must move away from restructuring, there should not be any category called restructuring. The moment it is restructured, it should be declared as NPA, there should not be any technical write-off... be prepared for that, unless you do that you might not be able to get out of the mess," he said.

RBI numbers showed that the banks added Rs 4,94,836 crore to their bad loans between 2007 and 2013. During the same period, they reduced NPAs to the extent of Rs 3,50,332 crore. This was possible because loans worth Rs 1,41,295 crore were written off and another Rs 90,887 crore were upgraded to repaying loans and Rs 1,18,149 crore was recovered from defaulters. According to Chakrabarty, after a technical write-off, there is no incentive to pursue recovery.

The deputy governor said that in the case of large loans, there is no one who is accountable for monitoring the loan, as these are sanctioned by the board or a committee. "Between 2007-13, credit to 10 large corporate groups has more than doubled. We have seen that wherever credit growth has been higher, NPAs are also higher."

Ranbaxy fined $ 500 mn for selling adulterated drugs made in India

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Friday, November 15, 2013

island airport option alternative to the proposed Navi Mumbai airport

Shot in the arm for island airport plan

MUMBAI/ NAVI MUMBAI: The City and Industrial Development Corporation (Cidco) has written to a Dutch consultant to give the cost and time estimate for a feasibility study on building a 1,200-hectare artificial island airport.

The plan envisages reclaiming land off the coast near the Panvel creek on the lines of Chek Lap Kok airport at Hong Kong, the Bangkok airport and the Osaka Airport in Japan.

Chief minister Prithviraj Chavan on Friday said that the government wants to keep the island airport option alive as an alternative to the proposed Navi Mumbai airport as differences still persist among villagers on the deal reached last week for acquisition of land.

Chavan said that the government had asked for a feasibility study, but Cidco sources said that the letter, written on Thursday by the planning body, asked the Netherlands Airport Consultants (Naco) to provide the cost and time estimates for the study. This study will also look at the artifical island airport's impact on the nearby Jawaharlal Nehru Port Trust (JNPT).

Sources said that Cidco is veering around to the view that it would be very difficult to get all the villagers involved to agree to the land acquisition terms as differences exist among them-about eight villages are still holding out on the deal. Cidco has acquired 2,288 hectares of land for the Navi Mumbai airport project; the stalemate is about the remaining 271 hectares.

The letter is also a clear signal to the villagers that Cidco would not wait forever for them to agree to the terms. "We have some time, but we won't wait for long either,'' a source said.

Naco has already made a presentation to Cidco, which involved building several islands. But sources said that Cidco is currently interested in building only one island for the proposed airport. If other agencies, such as the JNPT, were interested, they could look at the other islands, the sources said.

If the island airport becomes a reality, the Mumbai Trans-Harbour Link will have to be realigned. In the eventuality, about 6 km of the 22-km sea link will run through the island and this stretch will be subsidized, Cidco sources said.

The sources added that the joint secretary of the Union ministry of enviornment and forests, who had reviewed the project, was very positive on the artificial island airport option and has given Cidco a go-ahead for the feasibility study.

(Inputs from Clara Lewis)

Sea option attractive

* Cidco finds the airport-on-sea option attractive as it would only cost about a third to build-about Rs 3,000 crore-as against more than Rs 10,000 crore for the Navi Mumbai airport

* The island airport plan would also free up the prime commercial land near Kharghar earmarked for building Pushpak Nagar township for project-affected people. The planning body calculates that this land would be of immense value

* Cidco has already acquired 2,288 hectares of land, including 1,160 core aeronautical area, for the Navi Mumbai airport project; the current stalemate is about the remaining 271 hectares

* While the island airport is expected to be completed in 18 months, it would take two years to build and hand over Pushpak Nagar to the affected villagers of the Navi Mumbai project