Stress Fund May Help Noida Builders Complete Stuck Projects
Coming to the rescue of a large number of homebuyers as well as real estate developers, the housing ministry has directed the finance ministry to speed up the process of setting up a stress fund to complete stuck projects in Noida and Greater Noida.
Several builders ─ some of them are facing insolvency ─ have stopped construction midway in the region over financial issues, much to the chagrin of homebuyers. The Noida Authority has, for instance, approved 105 housing projects since 2005 and only 34 of these have been completed as of now. However, almost all of the housing units in these projects are sold.
Earlier this month, a high-powered set up to solve the problems faced by about three lakh homebuyers and impacted parties had suggested developers be given relaxations under a Project Settlement Policy (PSP) to ensure quicker delivery of homes to buyers.
Under the policy, developers are offered waiver in penal charges and reduction in interest rates, too. They must, however, give a written undertaking to complete projects in a time-bound manner to avail of the incentives offered under the scheme, failing which the incentive offered could be retracted.
“Builders and buyers cannot be disassociated. The focus is to complete projects. The recommendations have been made with a focus on buyers. Direct relief or relaxations to builders have been suggested only if they give written undertaking to complete projects within three years,” Union Housing Secretary DS Mishra was quoted by The Times of Indiaas saying.
The panel had also suggested developers be allowed to co-develop projects that they cannot complete on their own for a variety of reasons. State-run National Building Construction Company (NBCC) has already got an approval from the Supreme Court to take over stuck projects of distressed Amrapali Group. Going forward, the state-run builder could take over projects of other ailing realtors such as Jaypee, Unitech and 3C Company. Insolvency-hit developers Amrapali, Jaypee and 3C Company have to deliver 42,000, 30,000 and 10,000 units, respectively.