The local self government department has salvaged Trivandrum Development Authority (Trida) from revenue recovery proceedings by diverting fund from cash-strapped LIFE housing mission to pay loan liabilities to the tune of Rs 8.97 crore.
LIFE housing mission, which is already staring at huge financial crisis owing to its mammoth housing targets, was tapped by the state government to make up for the liabilities incurred by Trida for decades in a move to settle the matter before the end of the financial year.
Trida chairman C Jayan Babu said that the loan was taken sometime in the past for construction of houses for economically weaker sections. “The government intervened to settle the dues by allowing funds and now we are cleared of revenue recovery proceedings,” said Babu.
Officials with Hudco said that Trida had taken nearly 30 loans during the past two decades for various reasons like creation of urban infrastructure, housing and land acquisition and owing to non-payment, Hudco had agreed for a one-time settlement. Neyyatinkara municipality was also another defaulter along with Trida.
Kerala urban development finance corporation (KURDFC) had taken over the loans from Hudco and initiated revenue recovery proceedings against Trida. Sources said that the government had no other way to clear the dues but to bank on LIFE mission since the government was set to take a huge loan from Hudco for LIFE housing mission. “It’s like a small sacrifice for a bigger outcome. We are set to borrow nearly Rs 4,000 crore from Hudco for LIFE housing mission and Hudco wouldn’t lend money without no dues certificate and it was imperative to find some way to clear the dues,” an official said.
Adeela Abdulla, CEO, LIFE housing mission, said that the decision to use LIFE fund to repay the debts incurred by Trida was made by the government for a larger purpose. However, the move has not gone down well with a section of officials who say that it was completely illogical and unfair on the part of the government to use LIFE mission funds to clear dues of Trida. “It was the responsibility of Trida to have collected revenue from its assets and repay the loans. Now, LIFE mission has been deprived of its meagre funds and strangely government is mulling huge loans to sustain LIFE mission,” an official said.
The total state allocation for Trida between 2016-17 and 2017-18 was Rs 55 crore and during the same period Trida’s own income recorded just Rs 4.68 crore.
LIFE mission is already reeling under enormous financial burden. As per the scheme, the expenditure per flat comes to Rs 10 lakh and Rs 2,500 crore is earmarked for LIFE mission in 2018. Construction of 77,756 incomplete houses is going on. Houses need to be constructed for 4,21,073 people who don’t own habitable dwelling and houses for 3,38,450 landless people. The scheme aims to provide with houses worth Rs 4 lakh. In 2018-19, LIFE has targeted to provide houses to 1.76 lakh people, who own land but are houseless.
As many as 542 ongoing real estate projects are facing uncertainty with the Real Estate Regulatory Authority Karnataka (RERA-K) issuing a notification prohibiting projects with provisional approval from doing business.
The notification, which came into effect on April 1, 2018, mandates that builders get permanent approval before advertising projects, entering into agreement with customers and accepting advance money from them.
Following the move, RERA-K authorities have started issuing permanent registration numbers to approved projects. The notification, however, has cast a shadow on projects which are under the process of approval. Most of them are in Bengaluru.
“Due to the notification’s ambiguity, hundreds of ongoing projects are in limbo. We request RERA authorities to provide more clarity so that both builders and customers feel safe about the money spent on projects,” said Shyam Mareddy, vice-president of Builders and Real Estate Developers Association of India (BREDAI).
Since the Real Estate Regulatory Authority Act came into effect on July 10, 2017, RERA-K had adopted a process of issuing a provisional approval number to applicants, allowing them to do business. So far, the authority has processed 2,056 applications, of which 1,466 have been approved. As many as 385 projects are under consideration, 157 are under query and 52 have been rejected. All these were operational on the basis of provisional approval and in many of them, more than half the work has been completed. With permanent approval becoming compulsory, these projects have virtually been rendered illegal.
“The biggest issue is that builders have collected money from customers and invested it in the projects. It was legitimate till RERA-K issued the notification. Who will take responsibility for the chaos as both builders and customers are worried about their investments,” said Vinay Thyagaraj, a RERA consultant.
P Sunil Kumar, secretary of RERA-K, clarified that builders are at fault as they were not supposed to take money from customers and do business based on the provisional approval number given to them. “Section 3 of the RERA Act clearly says that no promoter shall advertise, market or sell the product until the project is permanently approved. The provisional approval number is an acknowledgement of sorts and has no legitimacy. Builders shouldn’t have gone ahead,” said Sunil Kumar.
While the beleaguered real estate industry has hit the panic button, Kapil Mohan, chairman of RERA-K, sought to assuage their worries by saying that the notification comes into effect prospectively. “What we are saying is that builders have to get permanent registration for projects from April 1. If you ask me ‘can ongoing projects with provisional approval continue business’, my answer would be ‘yes’,” he said.
The concern, however, is what if the projects fail to get permanent approval finally. Mohan said the builder has to refund the money to the customer if the application is rejected.
“It’s not going to be easy. How can you expect a builder to give back money when he has already spent it on the project? RERA-K’s latest move will wreak havoc,” said Thyagaraj.
While seeking more clarity, Mareddy said the best possible solution could be expediting the registration process and giving permanent approval to ongoing projects. According to Section 3 of RERA Act, the application is deemed approved if authorities fail to process it within 30 days. Applications have been pending since July 31, 2017. “While they are mandated to process the application within 30 days, the authorities sent queries in the interim just to delay registration,” said a builder on condition of anonymity.
The Hyderabad Metropolitan Development Authority (HMDA) will soon develop an integrated township in Medipally. While development works worth Rs 1,000 crore have been taken up and are in different stages, the HMDA is expecting to rake in another Rs 1,000 crore revenue with the auction of open plots in Uppal Bhagat layout, HMDA commissioner T Chiranjeevulu said.
Addressing HMDA’s 23rd board meeting on Monday, the metropolitan commissioner said that with the realty boom in the city for the past six months, there has been good response for the 229 plots put up for e-auction recently. The HMDA’s efforts has also led to a rise in revenue to Rs 872 crore in 2017-18 from Rs 400 crore in 2016-17. Administrative expenditure has also been reduced, the commissioner said.
Apart from the development of the integrated township in the Public Private Partnership mode, the board also approved works on beautification of Gandipet, construction of Balanagar flyover and foot-over-bridges at the meeting.
It also cleared a proposal to increase remuneration for advocates working for the authority in various courts. The commissioner recalled that the HMDA had won a legal battle for 630 acres worth Rs 15,000 crore in Kokapet due to the efforts of advocates.
The board also decided to encourage land pooling schemes in the metropolitan region. The government has already issued an order on land pooling schemes for above 50 acres, which will be helpful for both land owners and HMDA.
Realtors under the banner of Confederation of Real Estate Developers’ Association (CREDAI), Odisha, alleged that the state authorities refuse registration to completed projects and treat it as ongoing projects due to the absence of occupancy certificate.
“The Real Estate (Regulation and Development) Act, 2016, (RERA) rules of Uttar Pradesh, Karnataka, Tamil Nadu and Maharashtra say that projects completed before promulgation of the RERA Act do not come under the ambit of ‘ongoing’ projects. But there is no clarity in rules in the state,” said D S Tripathy, founder member of the CREDAI, Odisha.
The association urged the state government to frame rules like the four other states and approve the completed projects. “Realtors face a lot of financial problems as they cannot sell their houses due to absence of approval. It is nothing but harassment by the issuing agency,” said a member of the association Anil Kumar Agarwal.
They demanded amendments in RERA Act which complicates the registration process of the housing projects. The government should stop levying inappropriate fees while taking power of attorney of a land for its development.
Two years ahead of deadline, government employees displaced for smart city development in North TT Nagar area would be accommodated in new residential complexes. Around 600 government employees would benefit from the move.
According to sources, Bhopal Smart city development corporation limited (BSCDCL) is expected to finalise takeover of residential accommodation in a meeting on April 5. On the agenda, would be purchase of 600 flats located at Old Mandi. The BDA backed scheme at Maha Laxmi residential complex is nearly completed. It is located Pul Bodgha road near Jehangirabad.
BDA project began five years ago and the total number of flats in the scheme are 781 (2BHK 501 and 3BHK 280) and BDA construction cost was pegged at Rs 246 crore. Smart city takeover of most of the constructed area, would enable early rehabilitation of displaced government employees.
As a precursor to the move, BMC anti-encroachment sleuths have been carrying out operation to clear illegal encroachments in the area.
MP government had changed the location of Bhopal smart city – area based development (ADB) from Shivaji Nagar to North TT Nagar. One of the reasons was also resentment by government employees to be relocated. The current move by BSCDCL would also help the corporation get possession of 348 acre ADB land and change perception towards smart city development. Over all, smart city aims to develop 3,240 residential housing flats.
Recently, foundation stone laying ceremony for Rs 200 crore, 660 government housing flats near Palash hotel was carried out. It was to be Phase I of the scheme. Within accommodation for government housing taken care by takeover of BDA housing scheme, changes in smart city plan for ABD are not ruled out, said sources.