Gr Noida Authority proposes Rs 1,500 cr fund to bail out stalled housing projects
The Greater Noida Industrial Development Authority has proposed the creation of a special relief fund to bail out the stalled realty projects of small builders. This proposal needs Rs 1,500 crore for the fund to be reserved for the use of stuck group housing projects in the city. The proposal was put up before the three-minister cabinet committee set up by UP chief minister Yogi Adityanath on September 12. However, a decision on the proposal is yet to be taken by the committee.
According to the proposal, developers would be able to take a loan from this fund at a low interest rate ranging between 3% and 5% to complete their projects and hand over possession of flats to homebuyers.
According to officials, about 70 to 80 housing projects in Greater Noida are stalled for want of funds. Builders of these projects have a problem of liquidity and have no resources to complete the same and hand over homes to more than one lakh buyers. These builders are also not being able to procure loans from banks or any financial institutions because of a poor credit history. In these cases, the Greater Noida Authority would also provide a counter guarantee after it has satisfied itself that the builder who is being given a loan will be able to repay the same. For understanding the financial and physical status of all stuck realty projects, a consultant will be hired by October 15 this year. This consultant will collect all relevant data of the group housing project besides validating each project.
Financial due diligence will also be exercised to check whether the project is viable and can be completed by opening an escrow account with existing buyers, whether a co-developer needs to be appointed through open bids with the consent of the builder etc. Only when the Greater Noida Authority is sure that the loans given will be recovered and projects completed, will the special relief fund be used.