Noida, Greater Noida take up committee’s recommendations on stalled real-estate projects

The Greater Noida Industrial Development Authority board meeting on Saturday discussed the recommendations of the committee, including the creation of a “zero period” to waive penalty and interest on developers to spur stalled projects, an official said.

While the report was not on the agenda, a presentation was made and discussions on a “co-developer policy”, where other developers may be allowed to come in to work with the original developer to complete the project, and the “zero period” policy were held, the official said.

The zero period as proposed by the committee would include the pandemic and the period in which work was stalled due to court orders. The official said no decision on these policies was taken.

In Greater Noida, there are 86 projects that have been stalled and declared defaulters, with Rs 14,000 crore in dues to the Authority, the official said. Of this, Rs 9,000 crore is under litigation and Rs 5,000 crore is not — this is the amount from which a portion may be waived by the authority.

NOIDA CEO Lokesh M told The Indian Express that a Board meeting of the Authority had been scheduled for Sunday, where the committee’s recommendations would be “discussed”. In Noida, there were 59 stalled projects, he said. Lokesh’s predecessor, Ritu Maheshwari, had been a member of the committee before her transfer in mid-July.

Speaking to The Indian Express, a UP government official said once the boards of two authorities discuss the recommendations of the committee and send their minutes, the state government will take further steps.

Though the committee was set up to look at issues of stalled real-estate projects in the country, it has recommended a “model package suitable for Noida/ Greater Noida”. This includes 11 action points: introduction of a “Zero Period”, interest application, inclusion of co-developers, partial surrender policy, plan approval/extension process, recalculation of dues, non-cancellation of lease deeds, no additional cost, current FAR for projects, additional resources from excess land, and permission to mortgage.

According to the sources, the committee has recommended that developers pay 25% of the balance due to the authority after the above concessions within 60 days as a measure of commitment. The balance 75% would be paid over a three-year period with simple interest, sources said.

If a developer fails to complete the project within the stipulated time frame or progress is found unsatisfactory by RERA, 20% penalty will be imposed, and the project will come under the direct management of State RERA, the sources added.

According to the sources, the committee believes that this model package can be particularly beneficial for regions like Noida and Greater Noida and will encourage other state governments to consider similar adaptations.

The concept of declaring a “zero period”, where developers would not be charged interest and penalties, was rolled out by the UP government in 2019. The UP Cabinet had approved the policy that would exempt builders from paying interest and penalty in the time period their projects are stalled due to litigation if they pass on the benefit to the homebuyers.