FOR PRIVATE CIRCULATION ONLY

VISAKHA VISION Vol- 4 Issu- 4 Jan-Feb’ 2014

TOP ARCHITECTURE FAILURES

DIRECT AND INDIRECT TAXES

editorial office bearers Chairman B. RAJA SRINIVAS Cell.No.98497 09999 E-Mail : [email protected] President K. RAMA KRISHNA RAO Cell.No.98480 37477 E-Mail : [email protected] Vice-Presidents P. VENKATA RAMANA Cell.No.98481 20452 editor’s message E-Mail: [email protected] G. V. V. S. NARAYANA Cell.No.98481 30272 E- Mail : [email protected] D. SRINIVASA RAO Cell No.98491 27011 E-Mail : [email protected] Dear Readers, Hon. Secretary Happy New Year. I wish 2014 was a good start for you all and hope the year P. KOTESWARA RAO ahead would be filled with love and happiness. At the dawn of another year, Cell.No.99086 00005 let us realize that this earth is not what we inherit from our ancestors, it is E-Mail : [email protected], what we borrow from our offspring. It is our duty and responsibility to pass Treasurer on this precious belonging in good shape so that future generations lead B. SRINIVASA RAO their life comfortably. Let us be wise and save non-renewable resources, Cell.No.98481 22825 trees and natural habitats. I do not intend to say that we have to give up all E-Mail: [email protected] that we do; however, we can incorporate little changes that can make the earth a better place. Joint Secretaries Have a nice day, K. S. R. K. RAJU (SAI) Cell.No.98481 85679 E-Mail : [email protected] P. RAMA KRISHNA Cell:98484 14051 K. S. Chandran E-Mail : [email protected] Bullettin editor Committee Members A. SHIVANAND Cell: 99633 22000 All the Members are requested to get their address updated with the association in order to ensure E-Mail: [email protected] timely delivery of magazine also your email ID for speedy communication. If you are not receiving a copy of magazine of CREDAI, VISAKHAPATNAM chapter. please contact @ 9848854448 P. R. K. RAJU Cell: 98490 01119 E-Mail: [email protected] Editorial Board K.S. Chandran K. V. R. RAJU (Ramesh) Cell: 95506 33399 Printed at Sathyam Offset Imprints, Brindavan, #49-28-5, Madhuranagar, E-Mail : [email protected] Visakhapatnam, Ph: +91 891 2735878 N. SIVAJI Layout & Design ideafirst, #9-18-1, 1st Floor, Vinayagar Enclave, CBM Compound, Cell : 98481 97643 Siripuram, Visakhapatnam, Ph: +91 891 2508150 E-Mail : [email protected] CH. GOVINDA RAJU Cell: 98485-21789 CREDAI VISAKHAPATNAM E-Mail: [email protected] (Regd. No : 231of 2010) Immediate Past Chairman M. V. V. SATYANARAYANA Published by #1, First Floor, KSR Complex, Seethammadhara, Visakhapatnam-530 013, Cell.No.96666 66600 Ph: 0891-2739612, Mob: 9848854448, 99120 54448 E-Mail : [email protected] Email : [email protected] Website: www.credaivisakhapatnam.org

06 Credai visakhapatnam

tax

Y Surya Chandra Rao Charterd Account Cell. 9848186662 BUILDERS/DEVELOPERS OF RESIDENTIAL/ COMMERCIAL COMPLEXES – COMPLIANCE OF DIRECT AND INDIRECT TAXES– A SYNOPIS India with a population of 1.2 Billion has a significant need of affordable housing keeping in view of the growth of the economy at a brisk pace. The Construction industry plays a vital role and an important indicator and a major contributor to the national GDP as well as revenue garner for the exchequer in the form of various taxes. At present the infrastructure is the need of the hour. Residential developers play a crucial role in creating the jobs (Direct and indirect), thus helping the economy. The Residential developers have to comply with so many statues in their day to day operations. We herewith list a few of them in brief which are encountered by them regularly in their business.

tax

08 Credai visakhapatnam tax

1.Value Added Tax (Sales Tax): Under i.e to say practically all the apartment payable on actual value and not the Andhra Pradesh Value added tax complexes are now covered by service under composition scheme and the Any dealer engaged in construction tax. As per the provisions of the law value cannot be determined in such and selling of residential apartments, the residential complex developers a case, the person liable to pay tax houses, buildings or commercial are covered under the category of on the service portion involved in the complexes may opt to pay tax by “Construction of Residential Complex execution of the works contract shall way of composition at the rate of Services” and “Works Contract”. determine the service tax payable in 5% of twenty five percent (25%) The developers who have taken up the following manner: (i.e 1.25% on the total value) of the the “pure construction” activity i.e consideration received or receivable contractors engaged in construction A) In case of original works contract- or the market value fixed for the in general parlance and when VAT is 40% of the total amount charged for purpose of stamp duty whichever is paid on such services are subjected works contract higher as per Section 4(7)(d) of APVAT to service tax in the category of the read with Rule 17(4). This tax being an Works Contract. The value of the B) In case of works contract entered indirect levy the said amount is to be contract Where the VAT has been into for maintenance or repair or collected from the customer and has paid / payable on actual value and reconditioning or restoration or to be remitted to the government. If not under composition scheme is and servicing of any goods (Thus, activities the builder has failed to collect and Where the VAT has been paid on the relating to immovable property are remit the said amount he will also be actual value of goods transferred in not covered) -70% of the total amount liable for tax , interest and other penal execution of works contract, in such charged for the works contract consequences. a case, value of service portion in the execution of a works contract shall C) Other works contract not covered 2.Service tax: Service tax after be equivalent to the gross amount -by (A), or (B), above including numerous changes, circulars and charged for the works contract maintenance, repair, completion and notifications has brought down the less the value of property in goods finishing services such as glazing, clarity at last that the construction transferred in the execution of the plastering, floor and wall tiling, activity is liable for this tax also. At said works contract. installation of electrical fittings of an present a complex having more than immovable property -60% of the total one unit is also liable for service tax, Where the VAT has been paid / amount charged for the works.

Service tax on reverse charge is also be to be paid in certain cases. In the case of Construction of residential complex services

Description of taxable service Tax to be levied on percentage of Condition taxable value Construction of a complex, building, 25% (Effective rate will be 3.09% on (i) CENVAT credit on inputs used for civil structure or a part thereof, total value) providing the taxable service has not intended for a sale to a buyer, been taken under the provisions of the wholly or partly except where entire CENVAT Credit Rules, 2004; consideration is received after issuance of completion certificate by (ii) The value of land is included in the competent authority,- the amount charged from the service (a) for a residential unit satisfying receiver both the following conditions, namely:– (i) the carpet area of the unit is 30%(Effective rate will be 3.71% on less than 2000 square feet; and total value) (ii) the amount charged for the unit is less than rupees one crore; (iii) for other than the (i) above

Credai visakhapatnam 09 tax

This tax being an indirect levy the share Accordingly, the value of these used for arriving at the value for the said amount is to be collected from flats would be equal to the value of purpose of tax. Service tax is liable the customer and has to be remitted similar flats charged by the developer to be paid by the developer on the to the government. If the builder from the second category of service ‘construction service’ involved in the has failed to collect and remit the receivers i.e to say on the value of flats to be given to the land owner, said amount he will also be liable the similar flat charged from outside at the time when the possession or for tax , interest and other penal buyer. As the rates change over a right in the property of the said flats consequences. period of time during the course of are transferred to the land owner by completion of the project , the value entering into a conveyance deed or In the case of development of similar flats as are sold nearer to similar instrument(i.e to say at the agreements :, The service tax is the date on which land is being made time of handing over).( Circular No. also to be paid on the land owner available for construction should be 151 /2 /2012-ST).

What is due date of Service Tax required to be paid? 1. Payments through Bank :

Category Frequency Due Dates In case of Individuals, proprietary Quarterly as mentioned below - th Firms & Partnership Firms (i) For Q.E. 30th June - by 5 July th (ii) For Q.E. 30th Sept. - by 5 Oct th (iii) For Q.E. 31St Dec. - by 5 Jan. st (iv) For Q.E. 31st March - by 31 March Others (e.g. Companies, Societies, Monthly By 5th of the month immediately Trusts etc.) following the month in which payments are received towards the value of taxable services. However, in case of March, the payment should be made by 31st March.

2. Electronic Payments through Internet :

Category Frequency Due Dates In case of Individuals, Proprietary Quarterly as mentioned below - Firms & Partnership Firms (i) For Q.E. 30th June - by 6th July. (ii) For Q.E. 30th Sept. - by 6th Oct. (iii) For Q.E. 31St Dec. - by 6th Jan. (iv) For Q.E. 31st March - by 31st March. Others (e.g. Companies, Societies, Monthly By 6th of the month immediately Trusts etc.) following the month in which payments are received towards the value of taxable services. However, in case of March, the payment should be made by 31st March.

The service tax return to be filed Half 3. Income Tax: Above taxes which are are very vital and can have huge yearly i.e For the months of April to discussed are indirect taxes, where repercussions and involve cost. September on or before 25th October as income tax is a direct tax which and for the period October to March has direct bearing on the developer a) TDS on Property Purchase(194IA) on or before 25th April. E-filing of and the cost is huge. Some of the :With a view of improving the return has been made mandatory. provisions which are listed below reporting of the real estate

10 Credai visakhapatnam tax

transactions Budget 2013 has of the owner’s interest in the land. such as masanory work, centering introduced a provision w.e.f 01-06- However, depending on the terms of work, plastering etc if the amount paid 2013. It says TDS @1% on transactions the agreement, even a development to one person (contractor) exceeds of purchase of immovable property agreement could be regarded as a Rs 30,000/- in single instance or is to be made if the transaction value transfer. This could result in section cumulatively exceeds Rs 75,000/- in exceeds Rs 50 lakhs. For depositing 194-IA being triggered.(There are a financial year @1% or 2% as the this TDS there is no requirement certain issues which are to be clarified case may be. TDS also need to be of TAN. This tax is considered on by Department) made on the fees paid for engaging par with all other TDS. The onus of professionals such as Architects, TDS is on the buyer of the property. Form-16B is to be issued by the buyer Engineers, lawyer, Chartered The tax is to be paid in electronic of the property to seller. accountant etc @10% on the amount mode (E-payment) only . Tax shall paid. TDS is also to be made on rent be deducted at the time of payment Non compliance of the above, interest if the rent exceeds Rs 1,80,000/- per or at the time of giving credit to the and penalty are charged on the annum @10% on building rent and transferor, whichever is earlier. If purchaser of the property. Interest @2% on rent paid towards plant and advance payment is being made then will be charged @ 1% p.m or part of machinery hire charges. TDS would be required to be deducted the month for failure to deduct tax at the time of advance payment itself. or short deduction of tax from the If the TDS is not made on the above And if instalment payment is made, date the tax was deductible till the payments the entire expenditure the TDS would be required to be date the same is deducted. Interest claimed will be disallowed by invoking deducted at each such installment. will be charged @ 1.5% p.m or part the provisions of Section 40a(ia) and The tax deducted shall be paid to the of the month for tax deducted also the builder is treated as assessee credit of Central Government within a but not paid to the government under default for non adherence of period of seven days from the end of from the date of deduction till the TDS provisions and liable for interest the month of deduction. date of actual payment. This tax is and penalty. equally applicable in the category of Where property is held by Joint- purchaser and seller as the builder/ Quarterly TDS returns 26Q are to owners:- In case of joint owners, the developer is purchaser of land and as be filed in time for the above TDS threshold limit of Rs 50,00,000/- is well as selling the flats. made from 15 days from the end to be determined property-wise and of the quarter(Except for March not transferee-wise. The number b) TDS on property purchased from Quarter for which due date is 15th of buyer or seller would not matter NRI (Sec 195): As most of us are May). Otherwise penalty @200 per at all. The value of property should unaware of this provision i.e when any day will be charged mandatorily/ be more than Rs 50,00,000/- for payment is made to Non Resident (or Automatically. applicability of deduction of tax. For agent of Non- resident) TDS is need to example:- A,B and C jointly purchased be made from such payments. When d) Situations where consideration paid an immovable property. The purchase the developers purchase land from is less than Market Value(SRO Value) price for each owner is Rs 20lakhs, Rs NRI the TDS is to be made. Tax is to Implications: 15 lakhs and Rs 35 Lakhs respectively. be deducted @20% on the entire sum In this case individual purchase price paid/payable. If the developer/builder When the property is purchased or is less than Rs 50,00,000 but the fails to make the TDS the said cost sold for a value lesser than the value aggregate value of the transaction of land is liable to be disallowed as determined by the Sub Registrar exceeds Rs 50,00,000. Thus section expenses by invoking the provisions the following implications are 194-IA would be applicable. of section 40a(i) and also the builder encountered is liable as assessee under default for Generally, under a development non making of TDS U/s 201. n The Seller of the property has agreement, a developer is given to pay capital gain on the Sub possession of the property by the c) TDS on payments to be made to Registrar value (50C) in the case of owner with a Power of Attorney contractors, Architect fees etc : Apart capital gains(In the hands of the (‘POA’) to the developer for certain from the above TDS provisions, TDS Seller) i.e to say the capital gain rights like right to sell undivided share is also to be made when the builder tax will be levied on the value as of land to prospective buyers. This is engaging the services of labour per Sub-registrar even though the may not be regarded as the transfer contractors for performance of work amount is not received by the seller.

Credai visakhapatnam 11 tax

For Eg: The property is sold for Rs e) Cash payments in Excess of Rs builder and the land owner 15,00,000/- when SRO value is Rs 20,000/- (Sec 40A(3)): The Income relinquishes his right and the 18,00,000/- capital gain has to be tax Act 1961 is very stringent in the property from such date will be in paid on Rs 18,00,000/-. case of cash payments. Any payment the possession of the builder (as he which is treated as expenditure if undertakes the construction on the n The builder property has to account paid in cash in excess of Rs 20,000/- said piece of land). Hence the date the value of the Sub Registrar is bound to be disallowed fully and on which the capital gain accrued as income even though such no deduction can be claimed for will be on the date of development amount is not received by him as the same. It applies even for the agreement and handing over the business income (Section 43CA) in purchase of immovable property such property to the builder. certain cases. (In the hands of the as land /building for construction Purchaser). For Eg the property of apartments is an expense in the 4.Labour Cess: The Building and Other value is Rs 25,00,000/- as per case of builder /developer. Hence Construction Workers (Regulation SRO but sold by the builder for abundant caution is to be taken of Employment and Conditions of Rs 20,00,000/- the difference of while making the payments while Service) Act, 1996 was introduced by Rs 5,00,000/- is charged to tax in purchasing the site/land/building the Government of India to regulate the hands of Builder as Business as usually the payments are made the employment and conditions income. in cash. It must be paid by through of service of building and other Account payee cheque /draft. construction workers and to provide n When the individual or HUF has for their safety, health and welfare received an immovable property f) Incidence of Tax in case of measure and for other matter for a consideration which is less development agreements in the connected therewith or incidental than the stamp duty value of the hands of landowner: thereto. The rules to the Act were property by an amount exceeding bought into force by the Andhra Rs 50,000/- the difference in value In the case of the land owner the Pradesh Government with effect of stamp duty and purchase value capital gain will arise as and when the from 26.06.2007. Cess @1% of the will be treated as income from other development agreement is entered cost of construction incurred to be sources (Section56). (In the hands of into. Many are of the opinion that paid to the state government within the purchaser) the capital gain is payable at the thirty days of completion of the the time of handing over of the flats by construction project or within thirty the builder to the land days of the date on which assessment owner. Various judicial of cess payable is finalised, whichever forums have rendered is earlier, to the cess collector. the verdict that as the property is These are some of the statutory handed over compliances which need to be made to the by the builder/developer.

These above illustrations are not exhaustive and are summarized to have brief idea regarding the duties and taxes payable by a developer during his course of business. Expert advice to be obtained on case to case basis depending on circumstances/facts of the case.

12 Credai visakhapatnam

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gallery GALLERY

Sri K.S.Chandran, Past Chairman addressing the gathering. The Diginatories on stage (from left to right) Sri G.Viswanatha Kumar, HOD & Guest of Prof. Ch.V.Ramachandramurthy,Principal, AUCE honor, Ar.K.Srinivasa Rao, Past Chairman IIA, Prof. inaugurating the BR Raju Memorial award presentation Ch.V.Ramachandra Murthy, Principal, AUCE and the ceremony by lightning the lamp. Chief Guest seen with Credai office bearers.

Sri K.Ramakrishna rao, President, CREDAI VSP Ms. Sheik Aasmeena, 1 year student receiving the addressing the gathering. award from Sri K.Srinivasa Rao, Past Chairman IIA.

Parents of Ms. A. Navya Sri receiving the award from Ms.K.Sai Harshita, 2nd Yr. student receiving the award the Prof. Ch.V.Ramachandra Murthy, Principal, AUCE from Prof. G.Viswanatha Kumar, HOD, AUCE. in the absence of original recipient.

Audience Present at the B.R. Raju memorial award Members engrossed in the speach on “Architecture function celebrated at principal’s conference hall, A.U. and Emerging Cities. on 3rd Feb-2014. college of engineering.

16 Credai visakhapatnam gallery GALLERY

Ar. Y. Narasimharao, Past Chairman, IIA receiving a memento from Sri K.S.Chandran, Past Chairman on Office Bearers submitted a memorandum to Sri delivering guest lecture on “City-Citizen’s role” during M.Maheendhar Reddy, Hon’ble Minister for MA & the regular meeting held on 4-11-2013. UD during his visit to city.

Sri B.Vidyasagar, our member is presenting a flower bouquet welcoming Mr. R.K.Ganga Raju, Architect, Interactive meeting of Credai office bearers with who has delivered a guest lecture on “Architecture commissioner, GVMC and officers-Regular monthly and Emerging Cities on 3rd Feb-2014. meeting on 1-6-2013.

Sri B.Raja Srinivas, Chairman, Sri K.Ramakrishna Rao- President, Sri P.Koteswara Rao, Secretary and other members in a meeting they had with the Commissioner, Office bearers in a meeting with Sri S.Bala Krishna, GVMC Sri M.V. Satyanarayana on VLT/BWS. CCP, GVMC on 1.6.13 on VLT/BWS.

Sri D.Srinivas, Vice President, Sri P. Koteswara Rao, Sri B.Raja Srinivas, Chairman and Sri P.Koteswara Rao Secretary and B. Rajasrinivas Chairman giving a flower receiving orders on VLT from Sri S.Balakrishna, CCP. bouquet to the Commissioner, GVMC on 18.2.2014 on 19.2.2014. thanking him for considering their long standing Issues.

Credai visakhapatnam 17 g.o.

GOVERNMENT OF ANDHRA PRADESH MUNICIPAL ADMINISTRATION & URBAN DEVELOPMENT DEPARTMENT

Memo.No.l5114/M1/20l3 Dated: 15.02,2014 Sub: MA&.UD - Vacant Land Tax (VLT) - Resolution of Issues on Vacant Land Tax, Applicability of VLT - Instructions Issued - Reg.

Ref: 1.From CEO, CREDAI, Andhra Pradesh, Lr.No. CREDAIAP/48/2013-14, Dated: 28.06.2013 2.Memo.No.15H4/Ml/2013, Dated: 09.07.2013, 11.12.2013”*”..... 3.Circular C.IMo.0l8/.13th FC/CDMA/2013, Dated: 16.10.2013 4.From the Commissioner, GVMC Lr.Rc.No. 14764/ 2010/DC(R), Dated; 12.12.2013 5.Memo. No.15U4/Ml/2013, dt:27.01.2014 **** It has came to the notice of the Government that, in most of the Municipal Corporations Vacant Land Tax (VLT) is being collected at the time of sanction of building permission and it Is not being collected regularly on half year / annual basis as done in the case of Property Tax. VLT is levied for different periods of time in different Municipal Corporations when applicants are approaching for building permissions. In respect of Hyderabad and Vijayawada, VLT is levied immediately preceding year. In respect of GVMC, tax is levied immediately preceding 3years. From the provisions of Act, it is not clear whether the VLT is to be levied during the construction period or not.’ 2. Hence, Government vide reference 5th cited constituted a Committee with the Commissioner & Director of Municipal Administration, Hyderabad as Chairman and the Director of Town & Country Planning, A.P. Hyderabad and the Additional Director, MA&UD Department as Members to suggest uniformity of application of levying VLT as per Act and Rules in all Urban Local Bodies in the State. 3. Accordingly the Committee has submitted its report stating that, as per the Act provisions, any assessment or reassessment can be imposed for a period less than ‘3 years retrospectively and it shall not be beyond 3 years. Since the Act provision indicates only the upper limit i.e., not beyond 3 years, the Government can issue orders specifying the rime period for which VLT to be collected at the time of issue of Building Permission in order to have uniformity, to avoid any malpractices and to remove discretation at the level of Municipal Commissioner. 4. Government after careful examination of the matter & in the light of report submitted by the Committee, in order to have uniformity and to avoid any malpractices and to remove discretation at the level of Municipal Commissioners, hereby instruct to collect Vacant Land Tax (VLT) for one (1) year at the time o”’issue of Building permission. 5. All the officers noted in the address entry shall take necessary action accordingly and issue instructions to the concerned in the matter. Dr. S.K. JOSHI PRINCIPAL SECRETARY TO GOVERNMENT To, The Commissioner, Greater Hyderabad Municipal-Corporation, Hyderabad The Metropolitan Commissioner, Hyderabad Metropolitan Development Authority, Hyderabad The Commissioner & Director of Municipal Administration, Hyderabad The Director of Town & Country Planning, Hyderabad All the Municipal Commissioner’s of Municipalities/ Corporations/ Nagar Panchayats through Commissioner & Director of Municipal Administration, Hyderabad All Vice Chairmen of Uroan Development Authorities in the State.

Copy to The PS to Hon’bie Minister for MA&UD MA&UD (TC) Department. //FORWARDED :: BY ORDER //

section officer 18 Credai visakhapatnam moment celebratations

A moment to celebrate for the Apartment owners of Visakhapatnam Dt:13-2-2014 Municipal tap connection, an essential in every household, required the owners to pay a deposit charge of Rs. 5,000/- per connection. These charges have now been waived off making the relentless efforts of the CREDAI, Viasakhapatnam Chapter all worth it. Putting in more happiness to the package is the facility to obtain multiple connections for apartments having more dwelling units (with a maximum of 100).

After thorough consideration and research from the side of GVMC and a number of meetings of GVMC and CREDAI, the above conclusion has been reached. The necessary instruction were issued by the Commissioner GVMC and Special Officer vide Rc.No26/2012-13/E E.II(WS).

Thanks to the consideration of the Commissioner of GVMC

Thanks to CREDAI AND ITS TEAM

MEMBER CREDAI

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TOP ARCHITECTURAL FAILURES Millennium Dome (London, England)

1 Opened for $1.25 billion & derided When the Millennium Experience major teams. In the end none of the as being hideous. Only drawing in opened on 31st Dec 1999, initial teams were interested. For many half of it’s expected visitors, it was reaction from the press was poor. years the venue remained empty closed within a year which in itself Lack of content, lack of clear themes while the British government sought cost $41 million. and lack of creativity were common an appropriate buyer. The cost to criticisms. I did actually attended the maintain the structure was reported The Millennium Dome in London, exhibition myself and I would rank to be £1M per month and as a result UK was a purpose built structure it as mediocre compared to other the venue remained a liability that the created to house a year long major public events I’ve attended. opposing political parties were more “Millennium Experience” exhibition For budgeting purposes government than willing to leverage. that was to celebrate the year 2000 officials had projected 12M visitors. In milestone. Originally proposed by reality only 6 1/2M people attended. Contributing factors as reported in the ruling Conservative government, the press: the project concept was expanded Largely funded using money raised and championed by Labour party through the British lottery, the Lack of vision. Poor execution Prime Minister Tony Blair when he construction and event costs totalled (lackluster content resulting in negative took office in 1997. The Millennium £789M. Higher than anticipated experiences for visitors and the Experience exhibition as to feature construction costs and the shortfall in resulting negative PR stemming for interactive exhibits, shows and ticket sales meant that the total cost those experiences). Failure to manage other entertainment that were built to the lottery commission was £600M. expectations (prior to the opening around three primary themes: “who Money that otherwise would have the Prime Minister claimed the event we are”, “what we do” and “where been channeled to charities. would be “a triumph of confidence over we live”. The event was designed to cynicism, boldness over blandness, draw tourists into London during the Following the exhibition the original excellence over mediocrity”. Failure Millennium year and was intended plan had been to transform the to plan properly for the post event to be a celebration of mankind’s Millennium Dome itself into a soccer disposition of the venue. achievements. pitch for use by one of London’s

22 Credai visakhapatnam architecture failure The Burj Khalifa (Dubai)

Tallest building in the world, made for wealth. Abu Dhabi provided direct “It’s a lot more robust,” he said. “A $1.5 billion. The financial crisis meant and indirect injections totaling $25 plane won’t be able to slice through the building had to be renamed for billion last year as Dubai’s debt the Burj like it did through the steel the united arab emirates president problems deepened. columns of the World Trade Center.” who bailed Dubai out. Dubai’s hereditary ruler, Sheik Dubai was little more than a sleepy Dubai opened the world’s tallest Mohammed bin Rashid Al Maktoum, fishing village a generation ago but skyscraper Monday, and in a surprise in recent months has increasingly it boomed into the Middle East’s move renamed the gleaming glass-and- underscored the close relationship commercial hub over the past two metal tower Burj Khalifa in a nod to the between the two emirates. Sheik decades on the back of business- leader of neighboring Abu Dhabi -- the Mohammed serves as vice president friendly trading policies, relative oil-rich sheikdom which came to its and prime minister of the UAE security, and vast amounts of rescue during the financial meltdown. federation. The developer of the overseas investment. Then property A lavish presentation witnessed newly opened tower said it costs prices in parts of sheikdom collapsed by Dubai’s ruler and thousands of about $1.5 billion to build the tapering by nearly half over the past year. onlookers at the base of the tower said metal-and-glass spire billed as a Now Dubai is mired in debt and many the building was 828 meters, or 2717 “vertical city” of luxury apartments buildings sit largely empty -- the result feet, tall. Dubai is opening the tower and offices. It boasts four swimming of overbuilding during a property in the midst of a deep financial crisis. pools, a private library and a hotel bubble that has since burst. Despite Its oil rich neighbor Abu Dhabi has designed by Giorgio Armani. the past year of hardships, the tower’s pumped billions of dollars in bailout developer and other officials were funds into the emirate as it struggles to The Burj’s developers say they are in a festive mood, trying to bring pay its debts. confident in the safety of the tower, the world’s focus on Dubai’s future which is more than twice the height of potential rather than past mistakes. Sheik Khalifa bin Zayed Al Nahyan New York’s Empire State Building’s roof. is the ruler of Abu Dhabi and serves “Crises come and go. And cities move as the president of the United Arab Greg Sang, Emaar’s director of projects, on,” Mohammed Alabbar, chairman Emirates, the federation of seven said the Burj has “refuge floors” at 25 of the tower’s developer Emaar small emirates, including Dubai and to 30 story intervals that are more fire Properties, told reporters before the Abu Dhabi. Analysts have questioned resistant and have separate air supplies inauguration. “You have to move on. what Dubai might need to offer in in case of emergency. And its reinforced Because if you stop taking decisions, exchange for the financial support it concrete structure, he said, makes it you stop growing.” has received from Abu Dhabi, which stronger than steel-frame skyscrapers. controls nearly all of the UAE’s oil 2

Credai visakhapatnam 23 architecture failure

Citigroup Center (Manhattan, USA)

Built on stilts, construction ignored statement has some credibility since half the diagonals vanish and double safety to cut corners. any storm LeMessurier’s Cambridge office was on the other half, a “very peculiar could have knocked it down. rather the one that provided the design behavior.” (LeMessurier, 1995) than own up, workers were hired forces to Bethlehem Steel. at night to do secret repairs. While This critical design flaw may not working on a new building design In June of 1978 LeMessurier received have been as crucial if the original in the spring of 1978, LeMessurier a call from an architectural student full-penetration welds had been planned once to again implement from New Jersey who was assigned used but since the New York design diagonals. During a meeting with the the Citicorp building as a project. firm ignored quartering winds when steel fabricator the question The student told LeMessurier that choosing bolts over welds for the his professor says columns should connections, these connections were came up on the connections of these always be put on the building corners. now undersized. By going through diagonals; field welded full-penetration LeMessurier explained the site the shop drawings, LeMessurier also welds are expensive. LeMessurier called restrictions of the project and told noticed that the New York contractors his associate to confirm the success the student that due to the building’s exempted many diagonal braces on the field-welded connections used innovative column layout, it was from load-bearing calculations by on the Citicorp building and was particularly resistant to quartering interpreting the building code in a told that the welded connections or diagonal winds. After hanging certain way. LeMessurier’s firm used were replaced by bolted connections up he gave this final statement New York City’s truss safety factor designed by Bethleham Steel for some thought and chose to further of 1:1 instead of the column safety a savings to the bank of $250,000. investigate. In conventional buildings; factor of 1:2. The code states that This was common practice for steel columns on the four corners, the since columns in tall buildings are put erectors at the time and the new worst loading case is when the wind in tension from wind when bldg is joint design was based on the loads is pushing straight on the building. leading over, you should only subtract provided by LeMessuriers’ Cambridge Upon investigating he discovered from the tension of the wind 3/4 of office. There is a discrepancy in the that the worst loading case on the the dead load. The engineers said that account of events, whether or not Citicorp building was not when the the diagonals aren’t like a column in a LeMessurier was aware of the change wind is perpendicular but when the bldg, but instead, more like a diagonal from bolts to welds. McNamara claims wind is on the diagonal . LeMessurier of a truss therefore you can subtract LeMessurier knew of the switch to calculated the forces in the diagonals by the full dead load. What this did was bolts, this method of virtual work and determined reduced the required number of bolts that with diagonal wind the stresses on by one-half. Each bolt was good for 3

24 Credai visakhapatnam architecture failure

100 kips load, this meant that with the a 60% increase in member stress was ever look at the diagonal winds, assumptions made by the engineer, possible when he checked the max that is just not in the mindset.” This each connection needed a total of force in any diagonals in the building statement is contested by two senior four bolts instead of eight bolts. The in 100 years, the members could members of LeMessurier’s firm who original design connection consists of vibrate synchronously during a storm. claim that it was common to check high strength, 1 1/4 to 1 1/2 in. bolts, A 40% increase in member stress diagonal winds when designing through the holes. (ENR, 1978) meant a 160% increase of the stress tall buildings. There is debate as on the building joints. He also to whether the structure was at all (2000k tension vs. (2000k ten- discovered that if a storm pulled a checked for quartering winds during wind) - (1600k sion wind) joint apart on the 13th floor, the the design phase. LeMeassurier dead load) = - [3/4(1600k whole building would collapse. Also if claims that he did not because the 400k dead load)]=800k the storm causes the power to go out, code did not demand it. However, the damper would not work. The Robert J. McNamara, the managing bolts good for bolts good for design was for 55 year wind speed principal for Citicorp in LeMessurier 100k each... 4 100k each... 8 with the damper and 16 year design if Associates’ Cambridge office at the bolts bolts the damper didn’t work. In other time, states that LeMesssurier did in Too few bolts used in the first place words, there was a one in sixteen fact check the effects of quartering without even considering diagonal chance every year that the building winds and deemed that they did not winds. According to LeMessurier’s will collapse. govern the design and need not be calculations, diagonal winds increase furthered considered. This suggests member load by 40%. Le Messurier In a video recording of LeMessurier’s that LeMessurier may have used the reran the tunnel tests to include account of the 59 Story Crisis, he code as a shield from fully accepting quartering winds and bolts, the states “Have you done everything fault on the flawed design of the wind quartering winds were calculated to as well as your peers have done? resisting system. be 70mph ( 113 km/h). He discovered Nobody and his brother would

Aon Center (Chicago, USA) 4 The exterior was a beautiful marble after a 350-pound chunk of marble half the original construction price that was weak & cracked. A huge slab smashed through their roof during the and quite possibly one of the reasons detached, pulverizing the ground. skyscraper’s construction.Additional why you don’t see many Amoco Refacing with granite cost $80 million. precautions were taken to make sure stations any more. the marble stayed where it was Completed in 1974, the Amoco Building supposed to, but a 1985 inspection The building itself is currently named was the world’s tallest marble-clad revealed that the slabs were still Aon Center after its new owners, building, surfaced with 43,000 slabs of cracking and bowing under the strain. while the crumbled cladding was lightweight Italian marble. Of course, Finally, from 1990 to 1992, the entire either used for landscaping at other “lightweight” is a pretty relative term, building was refaced with white Amoco facilities or donated to anyone as the residents of the neighboring granite at a cost believed to be some who seemed like they needed several Prudential Center would argue $80 million, considerably more than thousand tons of Italian marble Credai visakhapatnam 25 architecture failure Lotus Riverside (Shanghai, China) Eleven 13 story flats. Excavation caused one toppled building to topple construction company’s “ignorance”, cause a river to flood the foundations, into the next, creating a horrifying rather than flaws in the design or turning them to mud. One collapsed, domino effect that, thankfully, did building materials. This report also barely missing the other towers. not come to pass. According to said the collapse was caused by earth, information, a 70 meter section of as an underground garage was being Shanghai is known for its striking the flood prevention wall in nearby dug on the south side, to a depth of skyline and gorgeous buildings. But Dianpu River may have something 4.6 meters and the excavated dirt was the Lotus Riverside is a residential to do with this building collapse. An being piled up on the north side, to apartment complex in Shanghai official investigation revealed that a height of 10 meters. As result the consisting of eleven 13-story firm’s ignorance led to toppling of building experienced uneven lateral buildings. On the morning of June 27, Shanghai building. The official Report pressure from south and north and this 2009, one of them toppled over, just by Will Clem and Lillian Zhang has resulted in a lateral pressure of 3,000 barely missing an adjacent building. said the collapse of an unfinished tonnes, which was greater than the Had it not missed, it might have building in Shanghai was due to the pilings could tolerate. Thus the building toppled over in the southerly direction.

Nine people linked to the building collapse, including the real estate 5 developer, contractor and the supervisor for the project, have been put “under appropriate control”, said the official Xinhua News Agency Sunday evening. This incident is a sheer lesson for all the architecture and engineer to check all the pros and cons of the earth and its climate conditions before executing the final construction plan or any development. John Hancock Tower (Boston, USA) Built in 1976, this 60 floor building while that was being made the 6 swayed scarily in winds. It’s windows missing panes were replaced with also fell out, smashing to the big slabs of plywood that didn’t ground. All 10,000 windows had to do much for the original design’s be replaced for $5 million. minimalist façade.

Not to be confused with Chicago’s To add insult to injury, after the John Hancock Center, Boston’s tower was opened the residents of eye-catching blue-glass skyscraper the upper floor began complaining is known officially as Hancock Place of motion sickness. While all and is occasionally referred to as modern skyscrapers are designed “The Hancock” by people looking to allow a little sway, the Hancock to score a cheap laugh. During its was wobbling all over the place, long and problematic construction, and while the installation of a mass however, the tower was popularly damper cut down on most of the known as the “Plywood Palace.” detectable movement, a 1995 study A series of glass shatterings led to revealed that the building was still the sobering conclusion that all the dangerously susceptible to high existing panes of glass had to be winds, necessitating a $5 million replaced with stronger stuff, and bracing project. 26 Credai visakhapatnam TM

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7 Vdara Hotel & Spa (Las Vegas, USA)

A curved, mirrored glass building that Hotel pool employees call the reflected rays. But that’s not enough, unknowingly concentrated the sun’s phenomenon the “Vdara death ray.” Absher acknowledged, as some pool rays like a giant magnifying glass. guests are still uncomfortable. Beaming into the swimming pool, it A spokesman for MGM Resorts burned guests. International, which owns Vdara, Chicago visitor Bill Pintas experienced said he prefers the term “hot spot” Vdara’s “death ray” recently. A lawyer, The tall, sleek, curving Vdara Hotel at or “solar convergence” to describe it. he was here on business for Preferred City Center on the Strip is a thing of He went on to say that designers are Capital Lending, which he co-owns. He beauty. already working with resort staff to also co-owns a Vdara condo. Pintas come up with solutions. told the Review-Journal that at midday But the south-facing tower is also Sept. 16, after a brief dip in the hotel a collector and bouncer of sun Designers foresaw the issue, and pool, he was sunning on a recliner. rays, which -- if you’re at the hotel’s thought they had solved it by installing He was on his stomach, relaxed, eyes swimming pool at the wrong time of a high-tech film on the south-facing closed. But suddenly, the lawyer day and season -- can singe your hair glass panes, according to Gordon became so uncomfortably hot that he and melt your plastic drink cups and Absher, the MGM spokesman. The leaped up to move. He tried to put on shopping bags. film scatters more than 70 percent of his flip-flop sandals but, inexplicably,

28 Credai visakhapatnam architecture failure

they were too hot to touch. So he ran phenomenon was gone. But several and “reflective surface” interact in a barefoot to the shade. employees recognized the “Vdara way that creates a hazard for pool death ray” nickname, and readily users, Haglund said via e-mail. “I was effectively being cooked,” Pintas spoke about the effect. said. “I started running as fast as I could The Vdara -- and five other CityCenter without looking like a lunatic.” Then he “It’s basically a glare,” said one. buildings -- are LEED-certified, a smelled an odor, and realized it was prestigious designation that means coming from his head, where a bit of “It’s like 20 degrees hotter” the buildings are designed, built hair had been scorched. It was about wherever the reflection is hitting, and operated to conserve resources 12:20 p.m., as best Pintas can recall. another one said. and to reduce impacts on the environment. Rafael Vinoly Architects Taking brief refuge at the pool’s bar Pintas disagrees strongly with the designed Vdara. Pintas said he area, Pintas chatted with employees. “glare” terminology. Does glare doesn’t intend to sue Vdara over He said they chuckled when he “painfully heat your hair (and scalp)?” the reflection issue. But as a condo described what had happened. “Yes, he asked in an e-mail after he owner, he worries about the health we call it the death ray,” he says returned to Chicago. “Glare sounds consequences and expects the hotel they told him. Sometimes it causes like what a politician or insurance to fix the problem. disposable drink glasses to melt, a attorney would call it. ... cocktail waitress added. After the A new building’s first season of intense reflection had passed, Pintas “This is a real risk to pool guests and operation always uncovers glitches, returned to his lounge chair. He pool employees,” Pintas concludes. Absher also said. Vdara solutions remembered that a patron nearby Plastic shopping bags are often under review include adding more laughed, and said something like, It made of polyethylene, which melts at foliage to the pool deck, offering got you, too? between 120 and 130 degrees. Many larger sun umbrellas and building a disposable plastic cups are made of shade structure. But the challenge of Then he noticed something more polypropylene, which melts at about constructing shade is that the sun, -- a flimsy plastic bag holding his 160 degrees. Pintas’ theory is that and the reflection, are moving targets. newspaper had partially melted. The Vdara’s curved southern wall acts as portion of bag bearing the name a parabola to collect and intensify CityCenter’s Vdara isn’t the first high- Vdara had entirely melted away. Holes the afternoon rays, which it then profile structure to reflect brightly. In marked where the letters, in black reflects. Viewed from above, the Las Vegas, both the AdventureDome ink, had absorbed the heat. Pintas Vdara tower resembles a crescent. at Circus Circus and the Mandalay Bay snapped a photo of the bag, which The crescent’s southern-facing side have reflection issues, Absher noted. he shared with the newspaper. After is concave. There is no tall building In early spring, he added, some pool Pintas’ experience, a Review-Journal farther south to block the sun’s hot guests at Mandalay Bay even seek out reporter went to the Vdara pool twice. afternoon rays, so Vdara receives the hot spots, because they are more Employees did not know they were the full brunt. Its pool lies at the comfortable for sunning. talking to a reporter. center of this southern-facing wall, on top of a low-rise building that is In Los Angeles, the Disney Concert The “hot spot” was visible during one three stories tall. Hall -- by noted architect Frank Gehry of the visits, but no guests were in its -- had to tone down its reflectivity by reach. An employee pointed out the A concave reflective surface sanding some of its curving exterior zone and said it was “like a magnifying can act “as a lens,” according to metal surfaces. glass that shines down” over a space Kerry Haglund at the Center for about 10 feet by 15 feet, which moves Sustainable Building Research, Initially, its reflections were raising as the Earth rotates. At this time of which is at the University of temperatures in nearby buildings year, the bright reflection is present Minnesota. But she declined to and impairing the vision of passers- for about an hour and a half, both speculate on whether the Vdara’s by. In 2004, the Los Angeles Times before noon and after, according to wall is acting as one. Sophisticated ran a story about the hall, below the the young man. The Review-Journal’s computer modeling can determine headline, “Disney venue reflects badly other visit was well past noon, so the whether its “facade configuration” on downtown.”

Credai visakhapatnam 29 energy buildings