UP’s plan for stalled projects: 4-year zero period & co-developer rights – ET Infra

NOIDA: The state government is likely to introduce a rehabilitation package for stalled projects, factoring in key recommendations made earlier this year by an expert committee headed by bureaucrat Amitabh Kant

At a meeting in Lucknow on September 28, called specifically to discuss the expert panel’s suggestions and chaired by the chief secretary, there was consensus on granting a four-year ‘zero period‘ to developers and allowing the original allottee to bring in a co-developer to complete projects that are financially viable, sources told TOI.

Zero period, when interest payable on land dues as well as penalties on default will be waived, is applicable to projects in two phases – from April 1, 2020 to March 31, 2022 because of the Covid disruption, and from August 14, 2013 to August 19, 2013, when the National Green Tribunal halted construction until an eco-sensitive zone for the Okhla Bird Sanctuary was demarcated. Builders cannot recover penalties, additional costs, or interest from buyers for this period either.

Officials present at the meeting – among them CEOs of the Noida, Greater Noida and Yamuna Expressway authorities and the state industrial development commissioner – could not come to an agreement, however, on delinking registries from payment of land dues by builders. The sources said concerns were raised that it would lead to the authorities losing control over the dues repayment process.

To address funding gaps of stalled projects, the Kant-led committee has proposed granting additional floor area ratio (FAR) to projects on payment of additional charges to the government, with the additional revenues coming from the builtup area that would become available as a result. The sources said this, along with providing other incentives like increasing commercial space in a project, could become part of the rehabilitation package that is rolled out.

All three authorities have also proposed giving builders three more years to finish projects without levying a time-extension charge.

But it’s the policy on registration of flats on which homebuyers will have their eyes glued. Registries are held up in projects across Noida because of the deadlock between developers and the government on dues. Homebuyers have held several protests, asking for registries to be delinked. As of now, flat-wise registration is allowed on the basis of partial occupancy certificates once proportionate dues are cleared, but this has had limited effect.

Some policies may also require amendments before a final decision is taken. Currently, the authorities cancel the lease deed of the entire project if dues are not cleared. This could change to partial cancellation, in which the lease for only the incomplete part of the project will be cancelled. A policy allowing partial surrender of plots to reduce the dues burden with some amendments may also be rolled out.

The three authorities are also open to the Kant panel’s recommendations that after the concession rates are rolled out, developers should pay 25% of the total dues within 60 days. The remaining 75% can be cleared over a period of three years.

Builders collectively owe more than Rs 47,000 crore to the development authorities in the district. While the Noida Authority must collect Rs 26,570 crore, Greater Noida has dues worth Rs 14,309. Developers in the Yamuna Expressway Authority area have to pay up Rs 4,700 crore.

If concessions under the zero period policy are implemented, the Noida Authority will have to forego Rs 7,400 crore while Greater Noida will have to give up around Rs 6,000 crore. The Yamuna Expressway Authority would lose around Rs 1,000 crore.

  • Published On Oct 4, 2023 at 08:10 AM IST

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