The homebuyers of Jaypee Infratech and Amrapali projects in Noida may take some comfort in the fact that the state-run NBCC (India) is expected to take up the projects to ensure their completion, and hand them over to their bona fide owners, said government officials familiar with the development. In return, NBCC has sought full control of the finances through an escrow account.
“Money can be arranged for the completion of the projects from balance payments of the buyers and the control of that money should be with NBCC through an escrow account,” one of the members who attended the meeting of a high-level committee constituted by the government of Uttar Pradesh told ET on the condition of anonymity.
The control of the company, however, would remain with the current promoters, or with the Insolvency Resolution Professional (IRP) in some cases.
The high-level committee has so far met thrice to salvage the situation after home buyers had approached the government seeking a solution. The home buyers have also favoured that a government agency take up the unfinished projects.
“NBCC has also advised that Noida Authority and banks should not ask for more money from the home buyers till the time houses are delivered to them. Noida Authority and banks should seek payments only when the buyers are satisfied with their houses,” the source said, quoting NBCC representation to the committee.
After the projects are completed, a call can be taken on dividing the surplus money lying with the escrow account.
NBCC has also suggested that it will act as a Project Management Consultant (PMC) to the projects and ensure their completion by engaging third party construction companies.
Amrapali has already made a representation to the Supreme Court, saying they want the help of NBCC to complete the project, and they would like to hand it over to NBCC, or any other similar government entity, to finish the remaining work. As per the affidavit submitted with the Supreme Court, Amrapali group will be developing a total of 40,987 units, which require Rs 5,112 cr for completion.
For NBCC, which is already executing projects worth Rs 80,000 cr across India, taking over the incomplete projects may not be a huge task as estimates suggest that the total cost of completing both the projects — Amrapalli and Jaypee — may not be in excess of Rs 15,000 cr. While NBCC may not earn much by taking up these incomplete ventures, it may in turn open up more opportunities for the company.