MMRDA tells Jet to pay Rs 101-cr penalty for delay

Mumbai: The Mumbai Metropolitan Region Development Authority (MMRDA) has decided to slap a penalty of Rs 101 crore on Jet Airways for failing to carry out construction on a plot it had bought in Bandra-Kurla Complex (BKC) in August 2006.
Jet, which is carrying a debt burden of nearly Rs 13,500 crore, has appealed to MMRDA to waive the penalty, citing a troubled aviation business and slump in the commercial realty market. The penalty amounts to a third of the original price of Rs 341 crore Jet paid for the 2.5 acre plot.
Under MMRDA rules, the winning bidder for a plot in BKC has to finish construction within four years of signing a lease. On expiry of this period, developers can get a maximum three-year extension provided they pay 10 per cent of the land’s value for each of the first two years and 15 per cent for the third year, as penalty.
“Since Jet has just about dug up the basement of the plot, we estimate that the project will take three years to be completed. According to our calculations, the penalty will add up to Rs 101 crore,” said Deputy MMRDA Commissioner A R Wankhede.
04/07/11 Shalini Nair/Indian Express

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Categories: Jet Airways Jul 2011