The Noida and Greater Noida authorities have been directed by the state’s industrial development commissioner (IDC) to draw up a comprehensive report based on recommendations of an expert panel headed by former Niti Aayog CEO Amitabh Kant to revive stalled real estate projects.
The principal points of interest in the report will be the position that two authorities take on granting rebates on dues to developers and de-linking registries from payment of dues.
The authorities would have to agree to a significant haircut if they hand out rebates, other than an extended ‘zero period’ waiver. The implications of allowing registries are still being discussed, with officials saying a new policy might be brought to address these issues.
The central government’s high-level committee suggested a model package suitable for the Noida and Greater Noida region, where scores of real estate projects have stalled or are running late by years, with complicated legal battles being fought in forums like the Supreme Court and the National Company Law Tribunal (NCLT).
Among its 11 important recommendations are granting the benefit of a “zero period” to builders that factor in the Covid pandemic, recalculating dues and the authorities taking a haircut on them, and immediate registration in favour of rightful homebuyers without insisting on dues from builders, which has currently held up registries in many projects in Noida where houses have been delivered.
The ‘zero period’ waiver has been recommended for two periods of 17 months and 24 months (April 2020 to September 2021 for Covid and August 2013 to August 2015 for NGT orders suspending projects within a 10km radius of the Okhla Bird Sanctuary for its demarcation)
Sources said the Noida Authority would have to take a haircut of Rs 7,400 crore of its total dues of Rs 26,570 crore, while Greater Noida would need to forgo around Rs 6,000 crore of its total due of Rs 14,309 crore only on account of the zero-period waiver. Calculating dues based on the SBI’s MCLR, another recommendation from the panel, would entail a bigger haircut.
A report on the financial impact on the authorities was presented to IDC Manoj Kumar Singh last week when he chaired the board meetings of both authorities on August 12 and 13. Singh sought a comprehensive report, based on which discussions will take place. Source said chartered accountants had been engaged for a re-evaluation of dues. Latest data shows there are 113 projects in Noida that have dues of Rs 26,570 crore. Of these, 29 projects are in the NCLT or Supreme Court and account for Rs 18,689 crore of dues. The others are defaulters.
Only 28 projects have cleared all dues and have a green signal for registries. Greater Noida has 191 projects that have dues of Rs 14,309 crore. Of these, 62 projects have cleared all dues, while 36 are in the NCLT or the Supreme Court. These 36 account for dues of Rs 9,433 crore. Officials said the authorities are focusing on recovering dues from defaulters that are free of judicial processes.
