NGT's Message To Developers: Come Clean To Get Green

Theirs is an inspiring home page: The website of SSM Builders & Promoters refers to the company as a 'charitable trust' and the trustees as “great philanthropists… serving the humanity at large”. The part on 'serving the humanity' was in focus recently as the National Green Tribunal (NGT) passed an order on the company's project in Chennai.

The company, which also has an active interest in the education sector, might just have taught about 1,000 developers in the country how to get out of a mess and move on.

The National Green Tribunal (NGT) had in July 2015 decided to put on hold all real estate projects that had commenced work without prior environment clearance, despite the Centre from time to time issuing directives that the green body should clear these projects. Developers had to stop construction, the home buyers who had invested in these projects were left in the lurch, and the sector at large took a hit.

SSM Builders' SSM Nagar Housing Complex at Perungalathur, Chennai, which on completion would offer 1,688 two-bedroom units, 760 three-bedroom units and 504 one-bedroom flats, besides 135 shopping complexes, was being built at the cost of Rs 720 crore. Any delay in the project would have affected about 1,600 home buyers. To avoid this, the company approached NGT, and in September last year paid Rs 36 crore as penalty for initiating construction without prior clearance. The environment body had directed the company to pay five per cent of its total project cost as penalty. By December, a panel had already done an inspection of the housing site. Based on the team's report, NGT directed the State-level Environmental Impact Assessment Authority (SEIAA) in Tamil Nadu to issue the project an environment-clearance certificate. Last week, it was all clear, with some terms & conditions of course, for SSM Builders and its ambitious project in Chennai's southwestern periphery.

“Since the project has been granted environmental clearance by SEIAA, Tamil Nadu, and the project proponent has also paid the amount directed under the judgment, it is necessary for us to dispose of these matters with certain further additional terms & conditions over and above the conditions imposed in the order granting environmental clearance to the project proponent,” the NGT order read.

Here are the key takeaways from SSM Builders' approach in the case, and the NGT order:

The authority: Many projects in the country are stuck over delays in environment clearances. In fact, in many cases developers have had to approach multiple agencies for a closure, without any gain. By its latest ruling, NGT has indicated that the final authority on environment clearances lies with it.

Set the priority straight: The present case proves that when huge investments are at stake, it makes sense to pay the requisite penalty to set the ball rolling. Also, a developer's track record will matter even more as the proposed Real Estate Regulatory Authority will come into force. Maintaining a good track record and keeping customers happy will now be very important for developers to be able to operate.

The larger interest: Bringing down or delaying what has already been constructed disturb all stakeholders. By granting go-ahead to developers, after due-diligence and necessary actions, the green tribunal can give the sector a fine push in the right direction. Construction activity will pick up, buyers will invest, and developers will ensure timely delivery.