Real estate developer Godrej Properties has announced that its board approved Rs 155 crore for repair work in its completed housing project Godrej Summit at Gurugram after chloride was found in concrete used in the buildings, the company said in an August 2 regulator filing.
This comes after the developer's arm Godrej Projects Development Ltd (GPDL), which completed the Godrej Summit project in phases in 2017 and 2018, appointed an external expert to undertake a detailed independent assessment of a quality issue discovered in the project.
This assessment identified the presence of chloride in the concrete used in the project, which when in contact with water, leads to corrosion of steel reinforcement, the company said.
Accordingly, Godrej Properties said that an estimated amount of Rs 155 crore towards repair, maintenance, customer claims, or any ancillary costs has been provided in the unaudited financial results of the company for the quarter ended June and approved by the board on Wednesday.
The company said it can claim from the contractors who constructed the Godrej Summit project.
"GPDL has also made an offer to buy back units or provide rentals to all the unit holders of the project and will account for the buyback if and when the intending customers execute the relevant documentation with GPDL," the filing added.
Buyback offer
According to sources, a few flat owners have availed of this buyback offer.
The company, however, feels that there would be no impact on the profit and loss statement as those flats will be sold again after the repair work, they added.
GDPL had developed this project, comprising a total saleable area of 2.1 million square feet, in partnership with the landowner. It had an economic interest of 65 per cent in the project in terms of sharing of saleable area, according to an investor presentation.
Apart from the Chintels Paradiso project, developed by Chintels India, where a tower had partially collapsed, a housing society in Gurugram comprising over 700 flats, constructed by the state-owned NBCC, was also declared unsafe.
Following these developments, the structural audit has been conducted by many developers suo moto or at the direction of local administration.
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