Around 40,000 Amrapali homebuyers may face further delay in delivery of houses

Around 40,000 homebuyers in Amrapalli’s properties will likely face further delay in delivery of their houses, as the contractors working on the projects have threatened to stop the work after continuous delays in payments from NBCC.

At some of the sites in Noida and Greater Noida, the pace of work has slowed down and some contractors have even disbanded their teams, creating nervousness among the homebuyers.

“We have had a number of meetings and the contractors have met the CMD (chairman and managing director of NBCC) also, but the payments have not been released since February 2021. With the pending amount rising every month, we will stop the work if the payments are not released,” said Vivek Garg, director of Varindera Construction, which is one of the contractors.

The company is executing three projects — Golf Homes, Leisure Park and Kingswood — with a total of 8,000 units that are valued at Rs 1,555 crore.

State-run NBCC is involved in the completion of 23 Amrapali housing projects which were stuck amid a fund crunch and alleged of financial mismanagement at the real estate firm. It took over the projects on a Supreme Court order. The court had also appointed a receiver to sell some of Amraplai’s assets like land to raise funds for the completion of the projects.

“Due to Covid-19, timely payment could not be released. However, that shall get regularized soon,” NBCC CMD PK Gupta said.

The court receiver said he did not want to comment on the matter.

The cost for the completion of these projects is estimated at about Rs 8,500 crore, according to experts.

ET has seen the letters written by five different contractors to NBCC in the past few days.

As per the letters, about Rs 500 crore of payment is pending from NBCC to these contractors.

“Most of us raise bills of Rs 40-50 crore in a month and as per the contract NBCC has to pay at least 75% of it within a week. Till February, payments were being released on time but there have been no payments since then. We continued working for some time but we have now disbanded the team,” said Nishith K Shah, senior vice president, GLCPL-AHC.

GLCPL-AHC is working on 8,000 units of the Dream Valley Phase-2 project, having started work in October 2020.

“The loss that we will incur due to dismantling of infrastructure and idling of resources will be worked out and shall be submitted for adequate compensation, and if not allowed, we reserve our right to approach adequate platform for redressal of the same under law of the land,” the company had written in its letter to NBCC.

Realty developer Gaurs Group, which has been awarded contracts for Amrapali Centurian Park, Verona Heights and Heartbeat City with a total inventory of 10,964 flats valued at Rs 2,124 crore, has also written to NBCC expressing its inability to continue the construction work.

“What we have understood is that NBCC doesn’t want to put in its own money and banks are not ready to fund the project. With rising raw material costs, it is not possible to sustain the work momentum without payment,” said a company executive.

NBCC has divided the stuck Amrapali projects into three categories.

As per the schedule, more than 10,000 homebuyers will have to pay the amount they are remaining to pay in four equal instalments.

The rest of the homebuyers are allowed to pay in 10 instalments of 10%, as per the delivery schedule. It is also auctioning land to raise funds and has been promised financing under the government’s special window for the completion of construction of affordable and mid-income housing projects.

“The delay in receiving timely payments is ultimately affecting the agreed timelines,” the Gaurs group said in its letter to NBCC and court receiver Venkataramani.

As per the contract special condition (stage payment for works), NBCC needs to pay 75% of the bill amount within seven days of the receipt of the bill from contractors and the balance within the next 14 days.

According to the contractors, during the last nine months, the price of all major construction materials including cement, steel, PVC items, sand, stone aggregate, bricks and aluminium had increased by up to 50%, driving up their cost.