Builders may lose MHADA contract if project is delayed

To expedite the completion of projects undertaken by the MHADA, the Maharashtra government is planning to introduce a termination clause, which will enable the agency to cancel contracts with private builders, if they do not complete the projects on time

The Maharashtra government is planning to amend the law and provide for the termination of contracts with private builders, if they do not complete the projects of the Maharashtra Housing and Area Development Authority (MHADA), the state housing agency, in time. The Slum Rehabilitation Authority Act, under which private builders can construct houses for slum dwellers and get rights for commercial development in return, has a provision for the termination of contract for delays. However, the Act governing the MHADA does not have any such provision.

The authority, whose mandate is to build affordable houses, has 104 colonies in Mumbai alone. It hires private builders for its projects, for constructing new buildings, as well as for the redevelopment of old ones.

See also: MHADA to be planning body for future government housing schemes in Mumbai: CM

“To expedite pending projects, we are going to introduce a contract termination clause in the MHADA Act, on the lines of the SRA Act,” said the state’s housing minister, Prakash Mehta. “It will empower MHADA to select a new builder and complete the pending construction. There are hundreds of projects, where private builders could not finish the construction, because of various reasons,” Mehta said.

In the case of redevelopment of old MHADA buildings, the delay creates problems for residents, as they have to live in temporary shelters for many years, the minister said. The proposal to amend the Act has been sent to the Law Department, he said.

“Several MHADA colonies in Mumbai are due for redevelopment. We are also planning to bring both MHADA and SRA projects under the Real Estate (Regulation and Development) Act (RERA), which will also ensure completion of projects on time,” he said. The RERA provides for penalties on builders, if they do not complete projects in the promised time.


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