NBCC Ltd, the government-owned construction company tasked by the Supreme Court to complete stalled Amrapali projects amounting to around 38,000 housing units, has so far completed close to 9,000 units, company officials said. It has done so utilising the Rs 4,000 crore received from homebuyers, a consortium of banks and SBICAP Ventures, which manages the stressed assets fund of the government, the NBCC sources added.
The two challenges NBCC currently faces have to do with realisation of funds from homebuyers and the floor area ratio (FAR) issue, they told Moneycontrol.
As many as 4,000 homebuyers had registered on the company’s customer portal but they have not been coming forward to pay up the dues. There is also some uncertainty about the projects’ unused portion of the FAR, which is used to determine the total floor area of a building in relation to the size of the plot.
NBCC is working on 25 Amrapali projects at 17 locations. It had taken over the incomplete projects of the Amrapali Group following a Supreme Court order in July 2019. “We have received close to Rs 4,350 crore through several sources of funding such as homebuyers’ dues (Rs 1,800 crore), consortium of banks (Rs 1,200 crore out of the sanctioned Rs 1,500 crore) and SBICap (Rs 650 crore sanctioned, of which Rs 300 crore has been received) and the remaining from attached properties that have been sold, and consumed around Rs 4,000 crore,” one of the persons said.
The total amount required to complete all the Amrapali projects is estimated at Rs 8,000 crore.
The company has completed structural work of close to 23,000 units, the sources said, adding that as many as 2,500 units have been sold, raising Rs 430 crore so far. “We are hopeful that we will be in a position to hand over all the units by 2025 subject to realisation of dues by the homebuyers and resolution of the FAR issue,” they said.
The Supreme Court-appointed court receiver has asked close to 4,000 homebuyers invested in Amrapali homes in Noida and Greater Noida, the Delhi satellite towns in Uttar Pradesh, to clear their dues. As “We have appealed to them to pay up within 15 days with 12 percent interest otherwise we will be cancelling their units. These exclude the 1,500 buyers who are part of the subvention scheme,” they said.
The FAR issue
In March this year, the Supreme Court had asked NBCC to give a proposal on unused FAR, which it has submitted to the Noida Authority and Supreme Court, the sources told Moneycontrol.
“We had earlier proposed that we will sell the additional FAR and exit. This could have fetched close to Rs 2,000 crore but this was refused. We have now proposed that we should be allowed to construct new dwellings on this additional FAR available to us. There is a possibility that this may help us generate close to Rs 8,000 crore, which we can plough back into the completion of the project,” one of the company officials said.
The company is also exploring other models to generate additional funds after it receives approval for utilising the additional FAR. “These funds will also be required to construct new housing units on these land parcels. Currently, we do not have any sovereign guarantee or seed money available with us. Once these approvals have been received, we may launch 14,000 fresh units of which 10 percent would be in the luxury category. We are proposing three such projects subject to us getting approval for utilisation of FAR,” the officials said.
Asked why the reason for the delay in receiving occupancy certificates for the projects that have been completed, he explained that most of the plans for these projects were cleared by the authority way back in 2013. “We were handed over these projects on an as-is-where-is basis. All these permissions have to be renewed. The process of getting these clearances renewed is on. We are also working at providing dedicated electricity and water connections for these projects. Temporary connections have been provided,” he added.
Most buyers have been given fit-out certificates in these projects and registries are pending. “We are yet to recover dues from buyers who have been residing in these projects. Close to 8,000 families have been residing here on the basis of these fit-out certificates. Most of them had bought these units at Rs 2,000 per square foot. As per the forensic audit conducted by the Supreme Court, the minimum cost of these units has been fixed at Rs 3,000 per square foot. We are yet to recover 15 percent of the cost from these unit holders before they can register these units. The recovery process is still on and that is the reason why it is taking time,” they said.
Homebuyers’ take
Homebuyers that Moneycontrol spoke to said that they have to do with commercial electricity being supplied to NBCC for construction work. “There are no direct electricity connections. How are we to carry on like this?” said Mukesh Kumar, a resident of the Centurian Park project. “There is no direct water connection, functional power backup and parking space is still under construction.”
“It has become extremely difficult to run lifts during summers as the transformer has a certain load that it can take. The annual maintenance contract for lifts has also expired, forget about air conditioners,” he added.
“Lack of facilities is perhaps the main reason why buyers are not coming forward to pay the dues. They are worried that if they do, they may be forced to take possession of the unit without basic amenities in place. We are also not satisfied with the quality of the materials used,” said another buyer, who did not want to be named.
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