The government’s construction arm is open to completing Jaypee Infratech’s pending projects as a project management consultant, if instructed by the government, said the company’s chairman and managing director AK Mittal.
Homebuyers cannot approach the government’s construction arm directly. Either the government entities or financial institutions can directly approach the NBCC to get the unfinished projects completed.
“Government entities such as Noida Authority, the nodal agency of the UP government, can get in touch with us directly. Buyers cannot approach us directly. Our role, as I envisage it in case of completing unfinished real estate projects, would be that of a project management consultant,” he says.
Experts say that this could be one way in which all stuck up real estate projects can get completed and buyers who have invested their life savings and waited for over eight years can get their homes. Banks too would be willing to put in money (last mile equity) if the government decides to step in through its construction arm to complete the projects as there is a trust deficit in the market.
Real estate developers say that in the long run if the number of cases of unfinished projects increase, builders may try and float asset reconstruction companies to take on distressed assets and complete much-delayed, cash-starved projects. This may become another line of business, they say.
“Some companies can even use their brand name to float asset management companies and get contracts to get unfinished projects completed,” says a builder.
Over 40,000 home buyers are stuck in incomplete projects floated by Jaypee Infra against which the National Company Law Tribunal has recently started insolvency proceedings. While some have paid the full amount to the company, there are others who may have paid either 60 per cent or perhaps 90 per cent of the amount. NCLT has appointed insolvency professional Anuj Jain as CEO of Jaypee Infratech. He has been given six months to revive the company. This period can be extendable by another three months.