Approvals on slow track

The Tamil Nadu Government has to streamline building approval processes in Chennai and the rest of the State to fully realise the investment potential in the real-estate sector. The State has earned an unenviable reputation for delays in sanctioning building plan approvals and clearances — a clearance for a multi-storeyed building could take 18- 24 months, that is almost as long as it takes to construct the building.

Talk to anybody in the construction industry, the complaint is the same: Delay in approvals within the Chennai Metropolitan Development Authority (CMDA) jurisdiction in Chennai Metropolitan Area, and that of the Directorate of Town and Country Planning (DTCP) which is responsible for clearances elsewhere. Just the formalities involved in getting land use conversion — from agriculture to non-agriculture — alone could take nearly a year. Other States such as Karnataka, Andhra Pradesh or Maharashtra have a system for fast-track clearances of projects. Approvals are obtained in about 4-6 months, including land usage conversion.

Need to speed up

The Tamil Nadu Government has acknowledged the need for expediting the clearance procedures and has started taking steps to speed up approvals for IT and industrial buildings.

At a high-level meeting last February, called by the Chief Secretary, Mr L. K. Tripathy, the officials connected with various agencies involved in plan approvals, including the CMDA, DTCP, Chennai Corporation, Municipal Administration, Fire Department, Traffic and industry promotion agencies, had expressed an intention to put in place a system to accord clearances within 60 days for IT and industrial buildings. But the proposal continues to be on paper and is yet to take off.

At the meeting, the Electronics Corporation of Tamil Nadu (Elcot) was identified as the nodal agency that would act as a single window facilitation agency to accept the applications from IT building developers and SEZ developers and coordinate the process of obtaining clearances from various agencies. The Guidance Bureau, the agency under the Tamil Nadu Industrial Development Corporation, created to attract investments into the State, would play a similar role to get approvals for industrial buildings.

The plan was to institutionalise this structure with an appropriate legislation, a draft of which was to have been prepared during the Budget session of the Assembly. The legislation was to provide for a 60-day time limit for building plan approval, 30 days for issue of final building plan clearance by the local bodies and the formation of a single window facilitation authority. However, nearly three months after the proposal there does not appear to be much progress in this direction.

Shortage of space

The State Government has estimated that over 20 million sq.ft. of built-up space for the IT industry is needed within the SEZs over the next 18 months. If building approvals are not given on time, IT investments could migrate to other States where such space is available.

There is also an acute shortage of office and retail space which is driving up the costs. Industry estimates peg the demand for office space in Chennai at about 7-8 million sq.ft. and for retail space about 2 million sq.ft. this year. Developments have to be speeded up to meet the demand.

The Hindu Business Line : Approvals on slow track