‘Last resort': NBCC defends bulk sale of new Amrapali flats to private builders to raise funds for stalled projects

Time of India

2 days ago

Noida: Facing protests from Amrapali homebuyers, National Buildings Construction Corporation (NBCC) has defended its decision to sell new flats in bulk to private developers, saying it was a "last resort" to raise funds for completing stalled housing projects.
The state-run construction company's move has sparked outrage among homebuyers who alleged that on one hand, their long-awaited flats were being cancelled in the name of delayed payments, while on the other, new flats with additional FAR were being handed over to private developers at "discounted" rates. NBCC chairperson and managing director KP Mahadevaswamy, however, maintained that the decision was necessary given the severe financial constraints.
"We tried retail sales first, but they didn't work. Bulk sale was our final option to raise funds quickly without burdening existing buyers," Mahadevaswamy told TOI.
When NBCC took charge of Amrapali projects, it inherited the responsibility of completing 38,000 flats for around 46,000 buyers. The company needed Rs 100 crore a month but was receiving only half that amount. Initial estimates suggested a total fund requirement of Rs 10,000 crore, prompting NBCC to award 24 construction contracts worth Rs 8,200 crore.
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The Covid pandemic, however, disrupted these plans. Payments from buyers slowed dramatically, contractors threatened to abandon projects, and labour payments were delayed. Despite securing loans from the SWAMIH Fund and a banking consortium led by Bank of Baroda, NBCC's financial challenges persisted.
"Around 8,000 buyers had stopped payments. In 2021, the Supreme Court ordered us to give them 15 days to make payments, after which we could cancel the flats and sell them.
We sent emails, issued letters, and advertised their names as defaulters. But many still did not respond. However, over time, this number reduced to about 2,000. Now that property values have gone up, they are protesting," Mahadevaswamy said.
However, with an objective to complete all units, NBCC purchased additional floor area ratio (FAR), from 2.75 to 3.5, to sell them to developers. Initially, the company tried to sell new units to be built on their own, but failed to get a good response.
It was the Supreme Court and court receiver committee that asked NBCC to purchase additional FAR. Currently, around Rs 893 crore has been paid to Noida and Greater Noida Authority out of a total of Rs 936 crore for purchasable FAR. In terms of land area, the total development related to the purchasable FAR allows 82 acres in six projects.
This prompted the move to sell flats in bulk. The strategy has so far resulted in the sale of 3,237 flats across four projects — Aspire Centurion Park, Aspire Dream Valley, Aspire Leisure Park, and Aspire Silicon City.
These sales are expected to generate Rs 6,480 crore, with Rs 648 crore already received from developers.
Developers including Gaursons, Happy Valley Infra, and AU Real Estate Services won bids in these projects. NBCC emphasised that these companies were merely sellers, with all construction remaining under its supervision.
Homebuyers, however, alleged foul play in the decision. "People waited over a decade and invested their life's savings.
Now, their flats are being cancelled, but bulk flats are sold to new investors," said Abhishek Kumar, president of Noida Extension Flat Owners' Welfare Association (NEFOWA).
Kumar challenged NBCC's notification process for defaulters, claiming many buyers never received proper communication about payment deadlines. Almost 3,000 buyers whose flats were cancelled are planning legal action.
"They say they published defaulters' names in newspapers.
But not everyone saw those ads. Some emails to the receiver's office bounced as well," he added.
NBCC insisted that the bulk sale process was transparent and court-monitored, with the prices of flats set after consulting international property consultants. "All payments will go directly to the court receiver's account — not of the developers," Mahadevaswamy said.
He added that NBCC had clearly instructed developers not to mislead buyers or make exaggerated claims.
"If they do, we will take action," he said.
The company said it also implemented measures to prevent monopoly by limiting developers to two project packages each. The developers must pay 100% of the reserve price regardless of their ability to resell the flats. A construction-linked payment plan is in place, requiring 10% payment upfront and the remainder over three to five years.
"These builders are only sellers, the construction is solely with us. Everything is being monitored by the Supreme Court. Our sole objective is to complete these stalled flats and deliver them to people who have waited far too long," Mahadevaswamy said.
Gaursons chairperson and MD Manoj Gaur claimed many of these protesters were not even genuine buyers. "These are people whose flats were cancelled for non-payment. They failed to prove their bonafide," he added.