State-run National Buildings Construction Corporation (NBCC) is assessing the viability of completing 27 unfinished Jaypee Group projects, senior government officials said. “We have just started unofficial discussions with banks (which have lent to Jaypee Infratech), the finance ministry and the developer and are trying to arrive at a viable business model to take it up. There is a huge business opportunity but the challenge will be about managing the project,” a senior government official said.
The construction major sees huge potential to raise money from the unsold inventories in these projects and the vacant land parcels mortgaged by the builder to banks, the official said. “Money can be raised to complete the project from unsold inventory available in the project and monetising the unused land banks along Noida Expressway and Yamuna Expressway,” the official said, adding that the cost of construction of unfinished projects is yet to be ascertained.
“Once all the unfinished projects are completed and people actually start living in those houses, it will go a long way in improving valuations of unused land parcels in the area,” the official added. Last month, homebuyers of Jaypee Infratech had written to the central government, urging them to rope in state-owned companies such as Housing and Urban Development Corporation and NBCC to step in and complete the pending projects. The Confederation of Real Estate Developers’ Association of India has also offered its support to take over some Amrapali projects once a formal co-development policy is approved by the Uttar Pradesh government.
Thousands of home buyers have been left in the lurch after the Allahabad bench of the NCLT, on August 10, admitted IDBI Bank’s plea for initiating insolvency proceedings against the debt-ridden realty company for defaulting on a Rs 526-crore loan.
Last month, home buyers who have invested in Jaypee Infratech’s projects had challenged the insolvency proceedings against the company in the NCLT before the apex court. Earlier this week, the Supreme Court ordered a stay on the order by the Allahabad bench of the NCLT initiating insolvency proceeding against the real estate company. A day after the apex court stayed the order, IDBI Bank moved the Supreme Court seeking restoration of insolvency proceedings against Jaypee Infratech.
Finance minister Arun Jaitley has already expressed his concern for the homebuyers and has said that wherever buyers have bought houses, they will get their flats. “The government’s sympathies are with them (home buyers). The insolvency proceedings have the provision to ensure that businesses are not hurt. The insolvency board will ensure that home buyers are not deprived,” Jaitley had said.