Officials of the Noida authority are mulling to approach the state government for waiving off interest on land dues of realtors for the periods when construction of projects was disrupted due to National Green Tribunal orders and delay due to land disputes between farmers and the government.
A total of 104 realty projects, located within a 10km radius of Okhla Bird Sanctuary, were affected following an NGT on August 14, 2013, which directed the authority to stop all construction work that did not have an environmental clearance. Builders demanded waiver of the interest on land dues on the grounds that their housing projects were delayed due to the NGT order.
The Noida authority has come up with the plan to enable builders to deliver stuck housing projects. The state government has also been asking Noida officials to come up with solutions to revive stuck realty projects. A large number of builders in Noida have turned defaulters and a total of Rs20,000 crore is owed to the Noida authority.
“We will communicate the possible solutions to the state government so that developers can deliver stuck realty projects. An interest waiver can provide some relief to builders. We are looking for ways to resolve issues of homebuyers, who have invested their hard-earned money,” said Shishir Singh, an additional chief executive officer (ACEO) of the Noida authority.
Sources said that another option is for the authority to recover the interest of land due from builders at a later stage. “The government can insert a condition in the policy that the interest will be recovered from a builder once the project is finished. And if the builder does not wish to finish the project, the authority will have the choice to recover interest immediately,” an official said.
As per the existing policy, builders pay the cost of land to the authority in instalments. However, most builders are failing to pay the clear their land dues, which multiply as the authority charges 11% interest on the remaining payment. Also, the interest increases by 3% every time they fail to pay an instalment on time, an official said.
“In some cases, the principal amount is Rs40 crore but the total due is Rs100 crore along with the interest. If the state government freezes the interest immediately, builders can get some relief and arrange funds from banks to deliver their projects,” an official said.
However, the Noida authority cannot waive off interest without approvals from the UP government. “We can only make a proposal. The final decision will be taken by the UP government,” said Santosh Kumar, an officer on special duty, Noida authority.
