Investment road shows by governments are notorious for announcing MoUs worth lakhs of crores. Most of these MoUs are meant to capture media headlines. They remain on paper and are not even a faint memory by the time the road show returns the following year with a fresh set of MoUs.
But the Maharashtra government, it seems, does not consign useless MoUs to the dustbin. Not only does it remember them, but revives them as well. That is exactly what the Devendra Fadnavis government did with its much publicised MoU for constructing 5.69 lakh houses for the urban poor. It picked up a dud MoU singed by the earlier Congress government with a builders' body and just regurgitated it, adding a new dimension to Narendra Modi's Make in India: Cut-paste in India!
This is what happened:
Circa February 2010: Ashok Chavan, chief minister. Chhagan Bhujbal, deputy chief minister. JP Dange, chief secretary. Paras Gundecha, president of Maharashtra Chamber of Housing Industry (MCHI), an apex body builders. They sign an MoU in February to construct five lakh houses for the urban poor. The MoU runs through its five-year course without a single brick being laid. It expires somewhere around the time that the incumbent government plans its Make in India extravaganza in Mumbai.
Circa February 2016: There's a change of government. A new chief minister, Fadnavis, is in place. Subhash Desai is the new industry minister. Shreekant Singh the new principal secretary, housing. And Dharmesh Jain, the new president of the MCHI. These new incumbents pick up the old, useless piece of paper that has just run out of even its legal sanctity, dust it up and announce to the world as a brand new plan to build 5.69 lakh houses for the poor in the Mumbai Metropolitan Region at a total cost of Rs 1.10 lakh crore.
The similarity of this farce does not end here. Fanfare and events was the hallmark of the previous government too.
It is not surprising that the same lobby of babus was present in the Make in India week in Mumbai to witness the same farce being recreated. The new MoU was signed during the Maharashtra Investment Seminar, a part of the Make in India week.
A senior official from the state housing department says, "Over 82 reputed builders are part of MCHI and this project will generate around 7.65 lakh direct jobs. We will ensure land and other clearances to ensure speedy execution of the projects," he added.
Fadnavis on MCHI and investments
On February 17, on the back of the Make in India week, Fadnavis declared that the state had attracted investments worth about Rs 8 lakh crore. "We have signed many memoranda of understanding (MoU) with several companies across sectors to the tune of Rs 8 lakh crore during the 'Make in India' week," he said.
"This MoU (with MCHI) is in line with our aim to develop 5.69 lakh affordable homes in the MMR by 2020. We will act as a facilitator for the developers, who would submit their proposals under the scheme to develop affordable homes. We will ensure land and other clearances to ensure speedy execution of the projects," Fadnavis said.
This dusted up MoU accounts for more than one-eighth of all promised investments generated during the Make in India (Rs 1.10 lakh crore out of Rs 8 lakh crore), putting a big question mark over the entire road show and its so-called success.
A senior officer from the housing department confirmed that the MoU signed by Chavan lapsed in February 2015, and claimed that CM Fadnavis had decided to give the builders one more chance. "Early January this year, the housing department once again sent a letter to MCHI, asking whether they are interested in the work," the officer added.
The developers, on the face of it, are putting up a positive spin to it despite not fulfilling the terms of the previous MoU. "In the last five years, hardly any work happened on the real estate front. But we are keen on taking up the project of constructing affordable homes once again,” promised Paras Gundecha, former president of the MCHI — and one of the architects of the dud MoU of 2010.
It must be said in fairness that affordable housing has been one of the key concerns of the Fadnavis government. Three months ago, Fadnavis had asked the Slum Rehabilitation Authority to give Rs 500 crore to the Konkan board of MHADA to buy land in the MMR and construct affordable homes. He had also assured Rs 500 crore to Shivshahi Punarvasan Prakalp Limited (SPPL) to build affordable houses in the MMR region. In an interaction with senior officers before Make in India, Fadnavis reportedly said that roping in private developers was important to construct affordable homes. He had emphasised, however, that care needed to be taken to ensure that builders received no untoward benefits.
When Firstpost asked why the same MoU with MCHI was signed again, a senior official of the housing department said that this time MoU would be backed not just by good intent, but quick action. He said the government will facilitate the members of MCHI-CREDAI, to obtain necessary permissions, registrations, approvals, clearance and fiscal incentives. "Like the MCGM, we have been implementing Ease of Doing Business across all sectors," he added.
While Firstpost has acquired a copy of the new MoU, the earlier one is said to have been gutted in the Mantralaya Fire.
Confirming that there was a similar, if not same, MoU between the two sides, SS Husain, CEO of MCHI, told Firstpost that the earlier one signed with the state government in 2010 did not workout form both ends and hardly any work was done on it in the last five years. "It could not be executed from both sides," he admitted. Asked why, he simply said: "Ask the previous MCHI president, not me."
But this time, Hussain claimed, the intent was genuine and that the MCHI, which has more than 1,500 builder-members, will execute the project in all earnestness. "In 2016 we will build 3 lakh affordable homes," he said with inexplicable confidence, built as it is on the ruins of a defunct MoU.
Talking to Firstpost former chief minister and senior Congress leader Ashok Chavan said, "I signed several MoUs, and I don't remember if I signed one with the MCHI. If the present CM also signed the same MoU, then like the Centre, the state is also doing fake business like PM Narendra Modi. If this true then it's very shocking to us." Chavan's shock, of course, is selective, not extending to the fact that his government and the one that followed (with Prithviraj Chavan as chief minister), were content to keep this project on paper.
Prithviraj Chavan recalled that he his government received the MoU in inheritance from Ashok Chavan. "We did not act upon it because the builders wanted to extract unreasonable concessions. If I had agreed to those conditions I would have committed illegalities."
It is a mystery how the Fadnavis government will execute a similar MoU with the same body of builders that is hungry for short cuts and government give-aways.
Here's a copy of the new MoU: