Thursday, December 27, 2007

New fees push up construction cost

New fees push up construction cost
Effective From Nov, Independent Houses Spared
Chandrashekar G | TNN

Bangalore: The cost of construction activity in the city has truly skyrocketed. After the recent guidance value and building valuation rate revision by the state government, the BBMP has hiked the fees for pre-construction sanctions — licence fee, ground rent, certified copy fee, building plan copy fee and compound wall fee. This apart, the BBMP has also introduced fees under two new heads — commencement and application fees. These new rates came into effect on Nov 17, 2007.
The BBMP also increased the security deposit to Rs 100/sq mtr for four-dwelling residential units from the earlier Rs 25/ sqmtr for five dwelling residential units and above. It has been hiked to Rs 100/ sqmtr for all kinds of commercial buildings from the earlier Rs 25/ sq mtr for 300 sqmtrs and above commercial buildings.
The fee revision will apply to apartments, commercial buildings, hospitals, educational institutions and semipublic buildings.
These fees will now be between 7 and 11 times higher. Licence fee, collected before commencing construction, used to be Rs 30/sqmtr for apartments. It now stands at Rs 250/sqmtr. For industries and semi-public buildings, it will be Rs 350/sqmtr. Educational institutions, hospitals and commercial buildings will have to pay Rs 500/sqmtr. However, there is no revision for single dwelling units.
The ground rent for single dwelling residential unit with an area ranging from 100 sqmtr to 501 sqmtr and above has been hiked from Rs 5-15 to Rs 10-40. For apartments, it is Rs 40/sqmtr from Rs 15/sqmtr; non-residential building, Rs 30-100/sqmtr as against the earlier Rs 15-40/sqmtr.
Of the two new fees, the commencement certificate fee ranges from Rs 10/sqmtr to Rs 40/sqmtr for single dwelling unit; for apartments it’s Rs 50/sqmtr and non-residential, it is Rs 80/sqmtr.
The application fee has been divided into four categories — residential building, apartment, high-rise apartments and non-residential building. The fees range from Rs 100/sqmtr to Rs 500/sqmtr.
Even the registration fee for diploma holders, engineers and architects has been hiked. From now on, diploma holders have to pay Rs 1,500 as against Rs 1,000, while engineers and architects have to pay Rs 3,000 against the previous Rs 2,000. These engineers, architects and diploma holders have to register with the BBMP to prepare building plans for their clients.
BBMP’s response: There is a huge gap between the existing and the required infrastructure. It has become essential to upgrade the infrastructure facilities to international standards. The BBMP’s revenue is insufficient to meet the demand. So, it has become necessary to increase the plan sanction fee and licence fee to mobilise more resources.


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