New Delhi: Over the past two weeks, the National Buildings Construction Corporation (NBCC), the government-run real estate developer, has emerged as the mainstay of the Supreme Court’s efforts to troubleshoot the crises in the housing sector.
On 23 July, the apex court directed the NBCC to finish building 46,000 flats that the embattled Amrapali Group owes to homebuyers. The court followed it up with another order on 30 July, ordering the PSU to oversee the completion of 74 projects, totalling 17,000 unfinished flats of another troubled real estate giant, Unitech.
It’s a compliment to the faith the apex court has in the public sector giant but at the same time adds to the burden of its unfinished projects.
Many of the NBCC’s own projects are stalled, though it is not entirely of the PSU’s own making in much of the cases. The projects are either mired in litigation or moving at a snail’s pace for want of statutory clearances from government agencies.
For instance, one of NBCC’s most high-profile projects is the redevelopment of three of the seven government colonies in New Delhi. The projects — at Netaji Nagar, Sarojini Nagar and Nauroji Nagar — however, are yet to take off in the absence of statutory environment clearance from the Delhi Pollution Control Committee and the Delhi Tree Authority.
The total cost of redeveloping the three projects is estimated at over Rs 24,000 crore.
The NBCC comes under the administrative control of the Ministry of Housing and Urban Affairs.
Also read: How Amrapali cheated 49,000 homebuyers, according to Supreme Court
A similar story across the country
It’s a similar story for a number of projects that the PSU has bagged across the country.
Sources in the housing ministry said work on projects worth Rs 16,000 crore undertaken by the PSU across India are either stuck or behind schedule.
These include the Rs 5,828 crore AIIMS redevelopment project in the capital that NBCC bagged in 2015. As part of the project, which was to be completed in two-and-a-half years, the NBCC is to build 3,000 flats. The Delhi Urban Arts Commission is yet to approve the project.
Work is also behind schedule in another AIIMS project pegged at Rs 2,163 crore. The NBCC got the contract in 2015 to develop a super-speciality block at the AIIMS Trauma Centre.
Another project way behind schedule is the Rs 4,500 crore TOD (Transit Oriented Development) in Karkardooma and Sanjay Lake that the PSU got in 2015. The NBCC is to build 100-storey flats here and the project was to be completed in 2019.
The NBCC has also not started work on a Rs 750-crore riverfront development project in Uttarakhand and redevelopment of Air India land at Baba Kharak Singh Marg and Vasant Vihar in Delhi. In the case of the redevelopment project, the NBCC is yet to get possession of the two land parcels that Air India has mortgaged to a consortium of banks.
Sources in the ministry said handling such a large number of projects has been a big challenge for the public sector company. “NBCC’s order book is worth Rs 75,000 crore but as against this, it has delivered approximately Rs 8,500 crore worth projects,” said a source.
NBCC CMD Shiv Das Meena did not respond to phone calls and queries mailed to him on 25 July.
NBCC’s finances
The PSU is, however, financially healthy.
In 2018-19, its consolidated total income, which includes those of its subsidiaries such as HSCC, stood at Rs 10151.37 crore. NBCC’s standalone total income for 2018-19 stood at Rs 7432.22 crore. The PSU had won Rs 12,427 crore worth projects in 2018-19.
At present, NBCC also has a land bank of 152 acres in Kolkata, Ghaziabad, Gurugram, Kochi, Patna and Alwar worth Rs 1,290 crore.
The funds will not be used to complete the Unitech and Amrapali projects. The PSU has been appointed as a Project Management Consultant (PMC) in both cases and will only ensure completion of the work. It will charge an 8 per cent fee for the job.
Also read: Public sector shining star NBCC finds financial irregularities in its own subsidiary