The Supreme Court’s order that 42,000 incomplete flats, which were to be built by the beleaguered Amrapali Group, will now be completed by the National Buildings Construction Corporation (NBCC) may have prompted homebuyers to heave a sigh of relief but is also raising questions that few have answers to.
In private, officials at NBCC talk about how they may have bitten off more than the public sector enterprise can chew. Only days after the SC appointed NBCC to complete Amrapali’s projects, the Centre told the court that the body was ready to be the project consultant for the 16,000 incomplete houses under the Unitech Group.
Over the past five years, NBCC has taken on several big redevelopment projects across the country. This includes the Pragati Maidan redevelopment project as well as the redevelopment of three out of seven government pool residential colonies in Sarojini Nagar, Netaji Nagar and Nauroji Nagar.
“The biggest challenge is to make sure that there are enough funds to drive these projects. With the others, the government was the one paying NBCC to carry out projects. This case, however, is very different as these projects have been handed over to us because the original builders either siphoned off money or faced other financial challenges. Those things have not changed and getting enough money to build these houses is not going to be an easy task,” said a senior Housing and Urban Affairs ministry official who did not want to be named.
NBCC officials confirmed that only Rs 19 crore have been deposited in the escrow account for the Amrapali project so far. According to the plan submitted by NBCC in the Supreme Court, it needs upwards of Rs 7,700 crore to complete the project, along with an 8% fee. While the SC has said that money from sale of Amrapali’s assets can also be used to fund the projects, along with pending payments from homebuyers, how much of the shortfall can be met is yet to be seen. The corporation will not be using its money to fund the project.
“There is some apprehension that the sale of assets is not going to be an easy task as the real estate market is in poor health. In such a scenario, to expect that everything will go off smoothly is an over-estimation. On top of that, thousands of homebuyers are now looking at NBCC to come through but it may take longer than what they expect,” said an official on condition of anonymity.