In order to address the plight of delayed housing projects, the Uttar Pradesh government has turned to the state-owned National Buildings Construction Corporation (NBCC) to find a solution. The state government has set up a high-powered committee that has asked NBCC to explore the possibility of buying vacant flats in the much-delayed housing projects in Noida or find a suitable business model for the sale of these apartments to complete the projects. Some of these projects were started some 13 years ago.
The panel, headed by Union housing secretary D S Mishra, will take up the stuck projects of basically four beleaguered real estate players - Unitech, Amrapali, Jaypee Group and The 3C Company - in the Delhi suburb, where thousands of homebuyers are awaiting possession. Some of the projects of Amrapali Group as well as Jaypee Infratech are also facing insolvency action.
The committee has also asked NBCC to find options for optimum use of the vacant land parcels in these projects to expedite their completion. The government-owned 'navaratna' company has been asked to conduct a joint survey of sites along with the authorities concerned and share the findings.
In a number of these projects, builders have done no construction in the last three-four years, blaming the government's policies for delays. This stand has been rejected by home-buyers as well as the government. Further, depressed market conditions have reduced the demand for flats and bank funding has also choked. With the projects running years behind schedule, buyers who had opted for construction-linked payment schedule have stopped payments, accentuating the cash flow problem for the realtors.
The UP government last month set up the panel to "solve the problems of nearly three lakh buyers and impacted parties", which has representatives from the state government, all development authorities of Noida and Greater Noida, NBCC and the lenders of respective projects. Representatives from departments of financial services, corporate affairs and home buyers have been co-opted in the committee to find a holistic solution to the crisis.
The proposal to ask NBCC to take the lead came from Noida Authority CEO Alok Tandon during the first meeting of the committee held late last month. Once a model for reviving these projects is found successful, a similar high-powered committee may be set up in states such as Haryana which has a sizeable number of stuck projects. While the buyers have taken the matter to different courts including the Supreme Court and country's apex consumer commission, the builders have been citing liquidity problem for the present crisis. Each project has to be assessed before taking them up for completion.