Inculcate of Capital could Solve the Problem of Obstructed Projects

Real Estate Regulation authority known as RERA believes that those who are booking homes not have the knowledge and technical skills to complete the stalled or delayed project. It is possible for those who are booking flats in such a project or society to come together, form an association and hire a consultancy to get the project completed through a contractor. Several stakeholders in Indian real estate have suggested a “one-time waiver” and “infusion of capital”. By the infusion of capital means a cash or capital infusion is a sudden, impacting cash distribution to an organization from stakeholders that are affected by the organization’s activities.

Dr Niranjan Hiranandani National president, National Real Estate Development Council describes that this is needed to be done to enable real estate companies with stressed assets to complete stalled or delayed projects, since bankruptcy of the company will only result in larger losses to all the stakeholders and people associated with the bankrupt company which had took the responsibility to develop the project. In addition, it will create problems for the economy as well. Since if infusion of capital is done, the problem of stalled projects or delayed project will be solved, and the question of whether it is feasible for homebuyers to complete stalled projects on their own will not exist.

Nimish Gupta, Managing director, South Asia, RICS, also express that it can be quite difficult proposition for homebuyers when the bankruptcy situation arisen to big ventures who are engaged in real estate development at large scale. This question has arisen because in few case homebuyers had joined hands to complete stalled or delayed projects. However, in almost all those cases, the projects were very small and the group of individuals had some common connection. But the real challenge arises in case of large scale enterprises stuck in a situation of stalled or delayed project; In this case it is an extremely difficult proposition for homebuyers. The challenges they usually deal with range from approvals to managing transactions, construction, supply chain and project completion and handover. There can also be issues related to leadership, mistrust, cash flow management and lack of dedicated effort by participants. Even seasoned operators struggle to ensure efficient management.

Considering the point of Experts like Niranjan Hiranandani he said that it is advisable that such real estate groups employ professional practices and consultants to help complete the stalled projects.