CREDAI Chairman: Rationalizing Dues Can Revive Stuck Projects Worth Rs 6,000-7,000 Crore

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    In an interview, Manoj Gaur, Chairman of the Confederation of Real Estate Developers Association of India-National (CREDAI-National), stated that there is significant potential for reviving numerous stuck real estate projects by rationalizing the penal interests on developers’ pending dues. Gaur emphasized that there is scope to reduce the total outstanding dues of around Rs 6,000-7,000 crore, and developers would be able to pay the remaining amount.

    Gaur highlighted that disruptions caused by COVID-19, construction bans, and farmers’ issues have hampered project completions. To address this, he proposed declaring a zero period for the times when such disruptions occurred. CREDAI has also made a representation to a committee appointed by the central government, led by former NITI Aayog CEO Amitabh Kant, on May 29.

    During the meeting, the developers’ body urged the authorities and the Uttar Pradesh government to adopt Haryana’s one-time settlement (OTS) policy to resolve the issue of pending dues from builders. The Noida and Greater Noida regions in Uttar Pradesh have experienced various disruptions, including farmers’ issues, construction bans ordered by the National Green Tribunal, and the impact of COVID-19, which have led to a snowballing effect on developers’ dues.

    Gaur emphasized that while paying land dues and interest is not an issue, the continuous disruptions have resulted in penal interests accumulating and converting into capital, becoming a major concern. He suggested waiving penal interests and declaring a zero period for the duration of the disruptions. Gaur expects the Amitabh Kant committee to release a report on stuck projects within the next two months.

    According to Gaur, the calculation of dues should be rationalized, and penal interests should be waived. The authorities have currently estimated builders’ dues to be above Rs 11,000-12,000 crore by including capital costs and penal interest.

    Gaur stated, “Rs 6,000-7,000 crore can be easily rationalized, and developers will be able to pay the remaining amount. In the current scenario, the authority should focus on recovering dues and interest, but several penalties imposed in different areas should be eliminated. However, for this, a recommendation from the committee approved by the government is required.”

    Gaur, who is also the President of CREDAI-NCR, believes that if the suggested measures are implemented, a significant number of stuck projects can be completed with the assistance of the Noida and Greater Noida authorities. He noted that many projects, which were previously considered net worth negative, have now turned net worth positive due to improved market conditions. Gaur called for the Uttar Pradesh authorities and government to adopt Haryana’s OTS policy, where builders only need to pay 100 percent of the dues while 75 percent of the penalty and interest is waived.

    “We are constantly in touch with all the decision-makers, and hopefully, we will achieve a positive outcome soon,” Gaur added.

    He mentioned that CREDAI had attended a meeting with the Noida Authority in May, along with representatives from various banks, to address issues related to stalled projects. The concerns of all stakeholders were heard, and CREDAI made a representation seeking support from the Authority to address the problems.

    In conclusion, by rationalizing dues and adopting supportive policies, the stuck real estate projects worth Rs 6,000-7,000 crore can be revived, benefiting both developers and the real estate sector.

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