Builders in Noida and Ghaziabad have hailed the six-month extension given by Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) for completing projects but hoped the relaxation could be extended by up to a year, citing labour and liquidity issues.
The UP-RERA had on Wednesday decided to extend the deadline for completion of real estate projects in the state by six months in view of disruptions caused by the coronavirus disease.
All registered projects for which the completion date or revised completion date or extended completion date as per registration expires on or after March 25, 2020, the registration and completion date or revised completion date or extended completion date is automatically extended by 6 months due to the COVID-19 pandemic, it stated.
Gaurs Group CMD Manoj Gaur said every halt in construction work affects the delivery dateline and realtors should be given just extension that could help them deliver quality project.
Before the COVID-19 pandemic, real estate sector struggled with almost two-and-a-half month halt of construction due to NGT order in November 2019, which was also not in the hands of developers. While welcoming the six month extension given, we would request that it should be relooked and increased to 9-12 months, he said.
Issues like labour migration are being faced by many developers. We have to factor in the reality that things have not normalised as yet and still there is no clarity over how much time it will take, Gaur, also the chairman of the Affordable Housing Committee in CREDAI, said.
Property consultant CBRE said the decision by UP-RERA to extend the deadline is based on the recommendations made by the Union Finance Ministry to treat COVID-19 pandemic as a 'force majeure' situation.
This decision will enable them to complete projects within the extended deadline and without attracting any penalties. For home buyers this is a welcome move as they will have the required clarity for computing the completion timelines for the properties they have bought, Anshuman Magazine, chairman and CEO - India, South East Asia, Middle East & Africa, CBRE, said.
"While the pandemic might have impacted the construction timelines of projects, we are hopeful that it is a temporary phase and with time the industry will start functioning at its full capacity, he added.
Developers in the region adjoining Delhi counted liquidity of money, labour and raw material among major challenges.
Mahagun Group Director Dhiraj Jain said even though the extension will help the developers from going into default for some time but the community still feels that specific steps required for liquiditygeneration in the real estate sector is the real need of the hour.
There is nearly Rs 7.8 lakh crore with the banks at the present moment, that has been parked with the RBI at moment and it's high time that, that amount is moved from the RBI and banks to percolate liquidity in the economy, Jain claimed.
Ajnara India CMD Ashok Gupta said no construction activity took place during the lockdown period since March 25. The group said it has to complete two projects Ajnara Ambrosia (2 towers) and Ajnara Klock Tower with over 380 units altogether.
"The relief of delivery line will help us utilise all the resources that we have and try our best to deliver. The challenges have not stopped as labour problem will now raise its head even though almost all big developers have tried to retain labourers during lockdown," he said.
As of now we have to go with the government directives and shifts allowed by the government. The solution would be to get work done in double shifts. A worldwide calamity of this sort has never happened and hurdles that it is bringing are far from foreseeable, Gupta added.
Ashish Bhutani, CEO of Bhutani Infra, said the group had to deliver its Aplhathum project but now with the extension given they will try to get the work done as soon as possible.
The way work came to a halt many realtors were expecting an extension from RERA. The challenges to complete the projects have not completely come to fore, which might include workforce, raw material, etc. We, however, are trying to complete the project as quickly as possible without making our buyer to wait for long, Bhutani said.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)