Long shadow over Stalled Projects

Vinod Behl

Two recent developments have cast a shadow over large number of stalled housing projects in the NCR, holding little hope for the distressed home buyers.

A recent report by a leading property consultancy- ANAROCK has painted an alarming situation pertaining to stalled projects across the country, especially in Delhi-NCR The study points out that out of 5.6 lakh units worth Rs4.51 lakh crore in seven major cities across the country, 2.10 lakh homes worth 1.31 lakh crore are in the National Capital Region. The study attributes this scenario to the prevailing capital crisis in the real estate sector and possible diversion of funds by developers. Many homebuyers anguished by non- action by the Government development agencies and regulatory bodies like Real Estate Regulation Authority (RERA) have threatened to exercise NOTA option in the Lok Sabha elections.

Out of the two lakh stalled housing units in the NCR, more than one- fourth belong to two defaulting developers- Amrapali and Jaypee Group. What’s a matter of concern is that the relief to the buyers of these crisis-hit companies has been eluding them for years. It is worthwhile to mention that last year the Government had set up a high- level committee to work out a plan to complete delayed projects of three developers including Amrapali, Jaypee and 3Cs. The plan was to create a dedicated fund comprising pending payments of homebuyers, besides raising fresh resources. As part of this plan, banks and Noida Authority was also to be involved to ensure that no more pending payments are demanded from homebuyers till their houses are delivered to them. But the plan has not made any worthwhile progress so far.

• Many homebuyers anguished by non-action by the Government development agencies and regulatory bodies like RERA have threatened to exercise NOTA option in the Lok Sabha elections.
• It is worthwhile to mention that last year the Government had set up a high- level committee to work out a plan to complete delayed projects of three developers including Amrapali, Jaypee and 3Cs.
• The plan of a mega public sector construction company NBCC to complete the stalled projects of Amrapali, Jaypee and 3Cs groups has been hanging fire for the past about three quarters.
• Similarly, NBCC was to pump Rs 8,000 crore into fund- starved Jaypee Group to complete about 24,000 stuck houses In all, the plan was meant to benefit about 58,000 flat buyers of Amrapali and Jaypee.
• Then there are isolated cases like the one of ATS Group offering Project Management (PMC) services to three stalled projects of Noida-based Logix Group and deliver 4,500 odd units.

The plan of a mega public sector construction company- National Building Construction Company (NBCC) to complete the stalled projects of Amrapali , Jaypee and 3Cs groups has been hanging fire for the past about three quarters. As per the plan, Rs 7,000 crore was to be pumped into capital- starved Amrapali Group to complete pending projects and provide relief to about 34,000 homebuyers. Following forensic audit, Amrapali Group had admitted to diverting Rs 3,000 crore of homebuyers’ money and on February 28, the Supreme Court had allowed Delhi Police to arrest Amrapali Chairman & Managing Director, Anil Sharma and two directors, Shiv Priya and Ajay Kumar along with the attachment of their personal assets. Similarly, NBCC was to pump Rs 8,000 crore into fund- starved Jaypee Group to complete about 24,000 stuck houses In all, the plan was meant to benefit about 58,000 flat buyers of Amrapali and Jaypee Group. Following initiation of insolvency proceedings against Jaypee Infratech, NBCC has bid for acquiring the company to help complete pending projects and deliver homes to buyers. Even if Jaypee’s plan works out, it will take around three years to complete and deliver stalled projects.

Then there are isolated cases like the one of ATS Group offering Project Management (PMC) services to three stalled projects of Noida-based Logix Group and deliver 4,500 odd units by bringing on board UPRERA, Noida Authority, financial institutions and other stakeholders including buyers to develop an effective mechanism. But the problem has been that no robust mechanism has been developed to complete lakhs of partly-built homes. Even the hopes that the Government would make an announcement in this year’s Budget to create a dedicated fund worth about Rs 2,000 crore to bail out stuck housing projects and help aggrieved homebuyers were dashed. And now polls are casting their shadow over stalled projects, making distressed homebuyers wait for relief longer.