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

NHB Conference Plan Sanctions for Affordable Housing PPP Projects Ramesh Ramanathan Chairman Janaadhar Constructions. About Janaadhar Constructions (P) Ltd.

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

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  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, ‘People’s 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 Janalakshmi’s 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 Agencies involved in plan sanction stages BMRDA Bangalore Metropolitan Region Development Authority MoEF Ministry of Environment and Forests KSPCB Karnataka State Pollution Control Board BESCOM Bangalore Electricity Company BWSSB Bangalore Water Supply and Sewerage Board BIAAPA Bangalore International Airport Area Planning Authority

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

  6. Bangalore Case Study – Details of activities

  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 Month1 Month2 Month3 Month4 Month5 Month6…………… Month 15 – 18 • 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 Land Acquisition completed AHDP* Plan Sanctions completed Construction Phase Delivery completed

  12. What it can look like – Total Cycle time of 18 months • 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

  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 • Environmental Clearance from MoEF required if • Project involves developing more than 20,000 sq. metres • Project serves 1,000 persons or above • Discharges sewage of 50,000 litres per day or above • With an investment of Rs. 50 crores or above

  16. Bangalore Case Study – Timeline of sanction events

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