City
Epaper

Tough task awaits NBCC in its role as home buyers' saviour

By IANS | Published: August 01, 2019 10:56 AM

State-run construction major NBCC has off late been seen as the last resort to complete few of the mega housing projects in the National Capital Region (NCR) which have been stalled for the past several years. But turning the high hopes of the distressed home buyers into reality could be a tough task for the "Navratna" company.

Open in App

Although the Supreme Court in its landmark judgement last week, directed the public sector enterprise to take over the projects of Amrapali and complete them, the hard reality is that lack of funds has already obstructed NBCC's work at two of the Amrapali projects it had taken up as a test case.

In the recent judgment, the top court drew up an elaborate plan to recover funds to the tune of Rs 11,320 crore. But several market experts say that recovering the amount could be a complex task.

The court has directed homebuyers to clear all pending dues amounting to Rs 3,624.65 crore within three months, which might not be possible as several customers had opted for construction-linked payment and would pay only as the construction progresses.

Similarly, in the case of Unitech, NBCC's proposal to the Supreme Court states that it would go ahead only as a project management consultant.

"NBCC will not contribute funds, sponsor or otherwise make any investment for the completion the project," it said.

Further, Unitech homebuyers have also opposed the NBCC proposal, as it sought Rs 50 crore as due diligence fee for project management consultancy.

Counsels representing homebuyers contested the NBCC proposal and termed it as unjustified.

"NBCC never sought any advance payment in the case of Amrapali Group. Also, how will this court-appointed committee raise funds to complete the project," said M.L. Lahoti, counsel for homebuyers.

In the Jaypee Infratech (JIL) insolvency matter, where NBCC had bid to acquire the bankrupt realty firm, the PSU had sought cancellation of an estimated income tax liability of Rs 33,000 crore due over a period of 30 years under the concession agreement for the transfer of land from the Yamuna Expressway Industrial Development Authority to JIL.

The state-run company also sought relief from taking consent of the YEIDA for any business transfer between JIL and Yamuna Expressway SPV for transfer of assets as well as land parcels from JIL to the land bank "special purpose vehicle" (SPV).

These two conditions were opposed by the JIL lenders, who in turn voted against the bid and NBCC's resolution could not make the cut in the last round of voting.

So, in the Jaypee Infratech case too, it does not seem to be a smooth sail for NBCC and home buyers' hopes from the public sector major may have to wait.

However, the National Company Law Appellate Tribunal's (NCLAT) latest extension of the resolution process of JIL by 90 days and permission for fresh bids have given a new lease of life to the aggrieved home buyers' hopes.

NBCC is likely to submit a fresh bid, but is unlikely to relent on its conditions, which may again pitch it against the lenders and may end up costing the bid.

Several sector experts are of the opinion that although the financials and mode of funding for these projects may take some time to gain clarity, NBCC is best placed to take up such projects.

Jaideep Dang of JLL India told : "The NBCC is currently developing commercial as well as residential projects in prime locations of Delhi. They have the bandwith and the wherewithal."

"How the financial model pans out and how NBCC goes along with the projects is something to wait and watch, but NBCC's numbers are quite strong and that's where my confidence lies," he added.

( With inputs from IANS )

Tags: NbccJILThe Supreme CourtUnitech
Open in App

Related Stories

NationalSC Constitution Bench defers hearing after AG says govt has set up expert committee on arbitration

NationalSC Constitution Bench defers hearing after AG says govt has set up expert committee on arbitration

InternationalAfghanistan: Four people publicly flogged by Taliban

National2020 Delhi riots: SC adjourns Umar Khalid's bail plea hearing for July 24

PoliticsIsraeli parliament gives initial approval to controversial bill

National Realted Stories

NationalEarthquake in Uttar Pradesh: Quake of Magnitude 3.5 Rattles Sonbhadra

NationalJaipur International Airport receives another hoax bomb threat

NationalCM's post in buzzing capital like Delhi not ceremonial, office holder has to be available 24x7: Delhi HC

NationalHeat Wave In Kerala: All Educational Institutions in Palakkad Closed Amid Soaring Temperatures

NationalSC refuses to halt Calcutta HC order axing 25,753 school jobs, stays CBI probe against govt officials