Maharashtra Housing Minister Jitendra Awhad has announced that the Slum Rehabilitation Authority (SRA) will take over more than 550 projects that have been stalled for long, for which builders and developers having borrowed funds ranging from Rs50,000 crore to Rs 1- lakh crore.
Awhad told The Free Press Journal on Sunday, “The money provided by Piramal Group, HDFC, India Infoline and a couple of banks and non-banking financial companies (NBFCs), ranging from Rs50,000 crore and Rs1- lakh crore, is stuck due to diversion of funds. As the projects are not progressing, it has left the poor on the streets. The aim is to give homes to the poor and pump in money for SRA.”
He said the present builders and developers would be removed and their contracts terminated after proper scrutiny of legal issues.
“With today’s (Sunday’s) decision, the financiers will be able to recover their money and more importantly, by roping in new sets of builders and developers, the people who are currently rendered homeless will get new homes,” Awhad said, adding, it would also help the financiers to recover their money. A housing department official said the projects were not just stuck because of financial issues but also due to tussles between the developers and tenants fights over payment of rent and other legal issues. Awhad had announced a fortnight ago no loans should be approved by any bank or NBFC on the basis of a letter of intent (LoI) given by the Slum Rehabilitation Authority (SRA) and Maharashtra Housing and Area Development Authority (MHADA) for redevelopment projects.
The decision was taken after the government found that developers had raised loans from the banks and NBFCs based on LoIs. “Loans cannot be given without any guarantee, when the land is not a free-hold land and entitled for a loan. It was also found in many cases that developers have abandoned projects halfway after taking loans, creating hardships for the tenants,” said Awhad. He noted the measure would curb delays in project completion
