Confederation of Real Estate Developers’ Association of India (CREDAI), Tamil Nadu has blamed the two state government agencies of holding up residential and commercial projects worth Rs.7,500 crore by delaying approvals.
CREDAI Tamil Nadu chapter President T Chitty Babu said at a press meet on Thursday, August 25, that the two regulatory agencies, the Chennai Metropolitan Development Authority (CMDA) and the Directorate of Town and Country Planning (DTCP), were sitting on applications seeking clearances for projects.
The piling up of roughly 700 files started three months before the assembly elections and there has been no respite even after the polls, he said. The resultant loss to the exchequer in the form of infrastructure and amenity charges, scrutiny fee, development charges, property tax, stamp duty and value added tax was approximately Rs.1,750 crore, said Babu.
“On an average, projects take 18 to 24 months for CMDA and DTCP approvals. But now, it has overstretched by six more months and there is no sign of any relief,” he said.
In all, about 43.5 million sq ft of projects are awaiting approvals before the two regulatory agencies. Close to 450 of those files are with the CMDA. About 80 per cent of them are residential projects. Any delay in their approvals would only add to housing shortage in the state, which stands at a staggering 2.8 million units, said former Vice President of CREDAI, Prakash Challa. Also, it may result in about three lakh people in the construction sector going jobless, he said.
The procedural delays, increase in home loan interest rates and the mounting input cost – prices of sand, bricks, cement and labour – are forcing builders to increase the selling price of projects by Rs.200 per sq ft, said N Nandakumar, secretary, CREDAI Tamil Nadu.
Some CREDAI members also spoke about hidden costs involved in project approvals. One of the members said files of even approved projects were being reopened by officials.
