Faced with liquidity risks, builders demand bailout

NOIDA: With bankruptcy fear increasingly gripping the already-stressed-for-liquidity developers, two builder bodies in Gautam Budh Nagar have pressed the alarm button for an immediate government bailout to help them tide over the Covid-induced economic crisis. They say around 100 under-development realty projects in Noida, Greater Noida and the Yamuna Expressway region need Rs 5,000 crore to fast-track construction.
While Naredco on Friday urged Union finance minister Nirmala Sitharaman for delaying NCLT case admissions by a year and pressed for a bailout as well, Credai demanded that all dues with the development authorities in the three regions be given the ‘zero-period benefit’ so that funds could be diverted for completion of projects.
“Around 100 projects in Gautam Budh Nagar are stuck due to cash flow problems and need a cash infusion of Rs 5,000 crore. All the real estate projects are on the brink of collapse and unless the government supports the sector, the project implementation will come to a standstill,” said RK Arora, president of Naredco-UP.
“We have urged the government to implement a one-time rollover and restructuring disbursed project loans by banks and financial institutions. Builders are in dire need of last-mile funding to complete the stalled projects. There are more than 4,000 projects all over the country that need last-mile funding. The only hope for the builders now is the government,” he added.
Credai, on the other hand, has demanded that all creditors should at this time take haircuts to help reduce the burden on the builders. “Be it the lenders or the authorities, everyone has to take some haircut to help the builders who have been facing liquidity issues for several years now. Small considerations by all stakeholders could go a long way to help defuse the crisis,” said Amit Modi, vice president of Credai (western UP).
The builders have been flagging issues with supply of raw materials during the pandemic and lack of manpower as reasons for the stagnation. The cash flow problem has made it worse for their progress. “We have made requests that the developers be granted zero-period benefit. The builders have no margin as the cash flow issue in the market is evident,” said Credai-NCR president Pankaj Bajaj.