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NHB Conference Plan Sanctions for Affordable Housing PPP Projects Ramesh Ramanathan Chairman Janaadhar Constructions.

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Presentation on theme: "NHB Conference Plan Sanctions for Affordable Housing PPP Projects Ramesh Ramanathan Chairman Janaadhar Constructions."— Presentation transcript:

1 NHB Conference Plan Sanctions for Affordable Housing PPP Projects Ramesh Ramanathan Chairman Janaadhar Constructions

2 About Janaadhar Constructions (P) Ltd. Janaadhar Constructions Pvt. Ltd. is a for-profit affordable housing development company, focused on bringing well-designed, quality homes for the urban under-served LIG population. The majority stake in Janaadhar is held in a Section 25 not-for-profit company Janalakshmi Social Services (see below) About Janalakshmi Janalakshmi (literal translation, Peoples Wealth), is a social business. It embraces market principles while pursuing a social objective. To accomplish this, Janalakshmi has been designed in a 2-tier structure: for- profit operating companies for investors; and a (Section 25) not-for-profit holding company called Janalakshmi Social Services - in which promoter stakes are held. Funds in Janalakshmi Social Services can only be used to address social issues. This 2-tier structure addresses one of the key criticisms about the social business sector that has arisen in India - about promoters generating wealth from the success of their initiatives. In Janalakshmis case, while investors can get the returns that they deserve for putting up capital, all promoter stakes are held in the Section 25 company, thereby ensuring that there is no personal enrichment for promoters.

3 Contents Background and Context RAY and its implications Bangalore Case Study Challenges in Plan Sanctions for Affordable Housing Streamlining Plan Sanctions for Affordable Housing PPP What it can look like Benefits of Affordable Housing Plan Sanction Process Suggested next steps

4 Bangalore Case Study – Agencies and Statutes LevelAgency National levelMoEF State levelKSPCB BIAAPA Fire Department Para-statalsBMRDA, BDA BESCOM BWSSB City LevelBBMP Relevant Statutes National Building Code of India 2005 Karnataka Town and Country Planning Act, 1961 Karnataka Municipal Corporations Act BDA Act Bangalore Metropolitan Region Development Authority Act 1985 Environment (Protection) Act 1986 Air (Prevention and Control of Pollution) Act 1981 Karnataka Fire Department Statutes Agencies involved in plan sanction stages BMRDABangalore Metropolitan Region Development Authority MoEF Ministry of Environment and Forests KSPCB Karnataka State Pollution Control Board BESCOMBangalore Electricity Company BWSSB Bangalore Water Supply and Sewerage Board BIAAPABangalore International Airport Area Planning Authority

5 AH Developer [scheme preparation &plan submission] MoEF and KSPCB: [plan evaluation and approval] BMRDA /MoEF/KSPCB Bangalore Case Study – Timeline of sanction events Apr 09 May Jun Jul Aug Sep Oct Nov Dec Jan 10 Feb Plan Version: A B C DE F G A B C Plan Version: A B C 95 days 94 days 120 days Note: These steps begin AFTER land acquisition has taken place – an independent process that takes anywhere between 12 – 24 months

6 Bangalore Case Study – Details of activities SubmittalDateRemarks Meeting between client/architect on project brief09-Apr-09 Final Scheme Presentation to Client30-Apr-0940 days required for preparing sanction drawings Development Plans Submitted to BMRDA: Version-A 08-Jun-09 Phase-01,02 - S+G+3 and Phase 3-B+G+8 Commercial Block (Area of 50,000 Sft) Facing Road Version-B07-Aug-09 S+G+3 floors only, Outline of Commercial revised (area reduced 50,000 Sft T0 15,000 Sft = 3%). Unclear Guidelines. Version-C13-Aug-09 S+G+3, Distribution of Commercial space in 2 location, demarcation of visitors car parking. Arbitrary Decision Version-D15-Sep-09 S+G+3 floors, Area Calculation format revised for CA, Open spaces etc. No Standard Format Available. Version-E25-Sep-09S+G+3 floors, Area Calculation format revised for CA, Open spaces etc., Version-F05-Oct-09 Nala profile as per tippany. Refer back to village records. Civic amenities, green open spaces relinquished to BMRDA on October 3 rd 2009. 25% of site? Version-G23-Nov-09Revision of Visitors car park location. Arbitrary Decision Version-H (Submitted with commercial space separation) 25-Nov-09 Commercial space separated from Residential and earmarked as landscape area. BMRDA denied accepting this earlier. Signed copy development plan received from client 22-Dec-09 Submittal of Detailed Floor plans to BMRDA Version-A31-Dec-09Floor plan revised as per approved Development Plan Version-B28-Jan-10Area statement revision. No Standard Format Available. Version-C15-Feb-10 Demarcation of 2 wheeler parking in Stilt floor, Section/Elevations for all Blocks. Not required as per by-law Signed copy of floor plans received from client02-Mar-10Plan sanctioned only for G+ 3 floors

7 Challenges in Affordable Housing Plan Sanction Complexity of rules Faulty urban planning and by-laws, restricting FAR and building height Ambiguity in interpretation Ill-defined zoning laws, resulting in fragmented design/approval process and sub-optimal outcomes Time delays Multiple agencies/iterations/ambiguity causes enormous delays Uncertainty Overall uncertainty in the process has two consequences – Reduced risk-appetite from Developers to enter this space – Increased desired returns to offset uncertainties

8 Making PPP in Affordable Housing a reality Improve access to clear land for developers Crucial element to address Not discussed in this presentation Streamline the Plan Sanction Process Strategic Issues Tactical Issues Operational Issues Simplify access to subsidies JNNURM/RAY subsidies on capital/interest not easily available to private developers Not discussed in this presentation

9 Streamlining Plan Sanctions – Affordable Housing Development Plan (AHDP) Sanctions Strategic Issues Densification – Community perspective – Min/Max persons/hectare standards based on location/ context/climate – Diversity of unit types – Allow for incremental growth – Open / Built space ratio based spatial / temporal standards Integrated Use – Land use should permit Live/Work/Play/School/Leisure automatically – Community needs oriented mixed use models – Create participative communities Sustainable Development – Low or zero carbon developments – Passive & Active climate oriented design to optimize energy consumption – Reduce, Reuse, Recycle philosophy in the design – Meet Griha standards

10 Streamlining Plan Sanctions – Affordable Housing Development Plan (AHDP) Sanctions Tactical Issues Single Window Approvals for Plan Submissions Simplified access to subsidies and other benefits (e.g. Carbon credits etc) Examine self-certification Operational Issues Rationalise building regulations like set-backs/parking/road- width etc to reflect EWS/LIG requirements Establish SLAs for turnaround times for sanction processes

11 What it can look like – Total Cycle time of 18 months 2-Step AHDP Sanction Process Step 1: Qualifying criteria for AHDP window – Project details/Financials/Construction details etc Step 2: AHDP Sanction window – Layout Plan with unit sizes etc. – Plan for Civic Services Month1 Month2 Month3 Month4 Month5 Month6…………… Month 15 – 18 AHDP* Plan Sanctions completed Land Acquisition completed Construction Phase Delivery completed

12 Benefits of the proposed AHDP Sanction process Removes Uncertainty Reduced Timelines Improves Economics and Market Functioning WIN-WIN-WIN-WIN – For Affordable Housing Clients – For the AH PPP Developer – For Union/State/Local governments What it can look like – Total Cycle time of 18 months

13 Thank You!

14 Background and Context – Rajiv Awas Yojana Support provided by MoHUPA under RAY Financial support – Existing slum-based support – Surveys/maps/slum-free city plans/training – Part 2 State plans for preventing new slums Capacity building/tools Admissible components Integrated development of existing slums Development/improvement/maintenance of services Convergence with other schemes and connectivity infrastructure Creation of affordable housing stock, including rental housing

15 Bangalore Case Study – Environmental Clearances Submittal of plans & documents to MOEFDate Remarks Version-A06-Jun-09Phase -01, 2 G+3 floors Phase -03 B+G+8 Version-B09-Sep-09 load calculation, Design brief, UG Sump, OHT, Water balancing Version-C12-Dec-09 Central Ground Water Board-Water Availability, NOC from Deputy Commissioner Final acceptance copy received from MOEF/KSPCBMar '10 Environmental Clearance from MoEF required if 1.Project involves developing more than 20,000 sq. metres 2.Project serves 1,000 persons or above 3.Discharges sewage of 50,000 litres per day or above 4.With an investment of Rs. 50 crores or above

16 Bangalore Case Study – Timeline of sanction events StepStatute(s)AgencyTime Scheme Presentation to Client by Architect -AH Developer 1 Month (April 2009) Submittal of Plans to Airport AuthorityBMRDA Norms, BIAAPA Norms BIAAPAMay – June 2009(1.5 months) Submittal of Plans to Fire DepartmentFire Department Rules, NBC Rules Fire Dept.June – August 2009(3 months) Submittal of Plans to KSPCB, MoEF for Env. Clearance Environment (Protection) Act 1986) KSPCB, MoEF June– March 2010(8 Months) Submittal of Plans to BESCOM, BSNLBESCOM, BSNL August- September 2009 (1 month) Submittal of Plans to BWSSBBWSSB Submittal of Plans to BMRDA for Sanction BMRDA Act 1985, National Building Code of India 2005 BMRDAJune 2009 – March 2010

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