Approval processes too cumbersome for builders

Real estate developers have long been stating that the most difficult part of executing projects is the beginning - not only are very high number of approvals required, the time taken for each approval is huge. Delayed projects escalate the costs of construction and eventually results in a costlier apartment.

The average number of approvals for apartment projects is around 10 to 15 depending on the size of the project. Larger the size, higher the number of approvals or no objection certificates (NoCs). If you wait to get the approvals, if you have the patience and staying power, the NoCs will come after a very long time. But if the wait results in escalation of costs, then the only way out is to pay bribe across the board. Builders say they are forced to pay bribes because officials otherwise would not approve projects.

 A builder who did not want to be named told this newspaper that they have to run from pillar to post to get approvals. “The authorities will make you come to them a hundred times by citing “minor lapses” in documentation. Even after several visits, they point out to ‘one flaw or the other”. When you realise you keep running around for the project and the approval isn’t coming, the only option left is to meet the demand of the official concerned, which is to pay bribe. The system is so well-oiled that the money flows right from below all the way up. Somebody has to take a call and start monitoring officials in different departments.” The builder adds: “If you come with me not as a press person but as a buyer, we can show you how each official interacts with us and what they say they require.”

The approvals are many - environment, water, electricity, fire, khata, plan documents, legal, conversion, financial, betterment and many more if there are works which come in departments within bigger departments. Each one takes time and files keep moving between these departments. In one project taken up in Bangalore, officials took almost one year to give environmental clearance. The construction costs would have shot up in that time - with cement, sand, iron all costing 20-25 per cent more.

For long, developers have been asking for a single window approval - all clearances to be give by one central agency. A formal request and proposal has also been handed over to the central urban development department, which responded positively. But there has been no operationalisation post the dialogue between builders and the urban department that was held in New Delhi recently.

Developers are also looking forward to a simplification of rules. A real estate representative said: “At the time of approval, numerous laws and bye-laws and regulations are cited, many of which are not comprehensible and necessary. To follow each of them to the end would be a nightmare. Instead, if the government can frame certain broad regulations that every developer has to strictly adhere to, the overall compliance and the culture of asking for bribes would end.”

Online submission of records is another strategy to fight corruption. Builders say the approvals will all be automatic if documents meet the requirements listed online. This has been operationalised to some extent, but glitches need to be ironed out. The regional transport authorities have automated issue of licences which has redu­ced to some extent the menace of touts who demand money. This online system can be replicated in real estate sector too, to bring down bribery.