An Unceremonious Burial?

In March this year, the prickly issue was once again reopened when the Shiv Sena-BJP government set up a study group in order to prepare an integrated development plan for the textile mill lands. The group headed by Charles Correa, the famous architect and city planner, also includes Deepak Parekh, chairman HDFC, and other senior executives from the state government machinery. However, the report which was submitted to the state government a few months ago, seems to have gone the way of all such reports—no concrete steps seem to be on the way. 

"My interest in the city is much more than the mill land. Since Independence, only two cities in the country have seen planned improvement—Delhi and Bhopal. We have created nothing in any other city of the country. Look at the way Mumbai has grown—from almost 2 million after Independence to over 11 million now. Way back in 1962 when yet another committee had recommended the concept of New Bombay, the government had projected a population of 9 million. Yet nothing was done. Given this pattern of Mumbai, you have to increase the supply of land, which is not a mean task considering the geographical constraints it faces," says Correa.

 There are 58 cotton textile mills in the city. Of these, 26 were deemed ‘sick’ and were taken over by the Government of India. The National Textile Corporation (NTC) manages 25 of these and the Maharashtra State Textile Corporation (MSTC) manages one. The remaining 32 mills remain in the private sector. Most are losing money or just about surviving. Says Sen Kapadia, the group’s project director: "Since the study group was denied access to the 32 mills in the private sector, except for three which appeared to be keen to sell some of their land right away, the report deals principally with the 25 mills with NTC."

In March 1991, the state government passed the development control (DC) regulations, which provided for development of lands of sick or closed cotton textile mills. The conditions were that one-third of the land be given to the Mumbai Municipal Corporation (MMC) for public open spaces and 27 to 37 per cent (depending on the area of the site) given to the Maharashtra Housing Area Development Authority (MHADA) and Public Sector Undertakings (PSUs) for housing. The remaining land could then be developed by the owner for residential or commercial uses.

 The intention was to regulate the development of textile mills land so as to generate open spaces and public housing for the city, in a manner which would create coherent urban form. Unfortunately this did not happen. Whatever redevelopment occurred was on a piecemeal basis, on a totally commercial scale, without any part of the land being available either for low-income housing or for public amenities. There was no strategy for overall urban planning and to generate employment opportunities for workers who lost jobs because of the closure of the mills.

The report of the Correa Committee states: "The piece-meal approach necessitated by the intransigence of the private mills denies to Parel the integrated development it needs. To indicate just how decisively beneficial results such mutual cooperation could provide to the owners as well as to the city, we have identified a triangular area between Matulya, Paragon and Mumbai Mills, a sort of ‘Golden Triangle’ on a scale slightly larger than the area between Bori Bunder, Horniman Circle and Flora Fountain. Since the holdings of these eight mills are contiguous, it would be an enormous advantage to all concerned if a way can be found and a mechanism devised to facilitate mutual cooperation for coordinated and integrated development of lands of all the mills involved." 

The present division of land, as per the DC regulations, discourages the amalgamation of plots, since the larger the area of land, the less can be retained by the owner. The study group has recommended that the division between the city, MHADA and the owner should be fixed at one-third each, regardless of the size of the site. Between the eight mills in the Golden Triangle, the total surplus land available for development is 567,718 sq m, of which 1,89,591 sq m will be given to MMC for city amenities and an equal amount to the developer for commercial purposes (over 20 lakh square feet), while MHADA gets 1,88,536 sq m for developing low-income housing. 

The total area of land retained by the mill-owners is 1,89,591 sq m. And the report recommends that this land should not be restricted to housing which is likely to end up at the luxury end of the market, but should also include the setting up of high-tech industrial units which will generate employment. Says Correa: "Some sites could also be developed for hotels and export-oriented units of electronic industries." The space given to MMC could also be used for schools, hospitals and other social activities. 

"Properly done, such recycling of land essential to the health and vitality of any of the world’s cities, can generate at least as much semi-skilled and unskilled employment per hectare," says Correa.

 The group also recommends a higher floor space index (FSI) of 2.0 from the current 1.0 in the area. Justifies Correa: "The government has allowed a higher FSI of 2.0 in the BandraKurla complex and in Belapur region. A similar FSI within the ‘Golden Triangle’ would not only create large new public spaces within the dense heart of the city, the cluster of taller buildings generated by the additional FSI would create a visible landmark, recognisable across the city’s skyline as a symbol of the regeneration of Parel—and with it, the city of Mumbai.

However, according to Deepak Parekh, in order to enable the textile mills to provide vacant possession of the land, which is a prerequisite for the sale of land, immediate funds are required by the mill-owners, primarily to pay compensation to mill-workers who will be retrenched, to purchase land at an alternate site where the mill could shift its existing plant and machinery and to pay the dues of financial institutions. While these would require large outlay of funds, many of the textile mills in Mumbai are carrying huge accumulated losses in their books. The only asset of these mills is the land on which they are located.

The land laws in India are so complex that no bank or financial institution is likely to provide finance to these mills. In this context, the state government has a role to play. It must create a corpus of providing finance to the mills through a consortium of banks and financial institutions. "The funds could be provided by the consortium against the purchase of FSI from the mills. Alternatively, a separate financial institution could be set up by the state government which could receive funding support from various financial intermediaries," the report notes. 

Not everyone is happy with the Correa Committee report. Lamenting the increased FSI allowed by the government in the past (from 0.5 to 1.0), Chandrashekhar Prabhu, former Congress MP and ex-MHADA chief says: "As if enough damage hasn’t already been done, the Correa Committee Report now suggests a further increase in FSI to 2.0! They want to beautify the skyline at the cost of the mill-owners."

 The government is maintaining the status quo under the pretext of "studying the report". While the study group has exhorted the state government to implement the scheme "right away by allowing NTC to proceed with the development," it is also awaiting government clearance for access to the land held by the private sector mills, after which it will proceed with the second part of the report.

 However, the falling real estate prices in Mumbai, according to sources, have inhibited action being taken on the development of the mill land scheme. "A great many vested interests—both in the government and in the mill-owners community—will ensure that all decisions concerning the Correa Committee Report remain pending till real estate prices start perking up," says a city planner. Till then, like many other committee reports, the first part of Charles Correa study group recommendations may remain just that—recommendations.