Mumbai: The government's ₹20,000 crore stress fund for real estate, announced on Saturday, would help revive many stalled housing projects in Maharashtra though it may not cover projects in Mumbai city due to higher price value, said Gautam Chatterjee, chairman, Maharashtra Real Estate Regulatory Authority (MahaRERA).
According to Chatterjee, Union finance minister Nirmala Sitharaman's initiative to create the stress fund fits well with MahaRera's efforts to help complete several projects which have been stalled due to lack of last mile funding.
"Even after we have set out a blueprint of how to complete (stuck) projects, most times there is a shortfall of money to do so. For instance, ₹1 crore, ₹2 crore or ₹5crore. We would feel that this stressed fund would be a heavenly blessing to see these projects get through," said Chatterjee in an interview, adding that the projects comprise those which have not been declared as non-performing assets by banks, nor have they slipped into the moratorium of National Company Law Tribunal (NCLT).
While the stressed fund would not cover the high value projects in south Mumbai or parts of Mumbai, several other projects in the outskirts of the city and "bulk of Maharashtra" would benefit by it, Chatterjee said. "I don't see any problem in trying to hold the hands of especially the smaller ones to see that we are able to complete the projects. To that extent, I feel it’s extremely good as a starting point."
At present, MahaRERA is working with homebuyers and various stakeholders to help revive around 12 stressed projects in Maharashtra. There are close to 100 such projects in the pipeline which homebuyers have approached RERA for a resolution, according to Chatterjee.
The process to restore these projects are similar to NCLT's insolvency proceedings except that instead of forming a committee of creditors, it would be an association of allottees that includes homebuyers and banks to arrive with a resolution plan and blueprint to revive the project.
"NCLT resolution would lead to a haircut and ouster of the developer. A new developer may be brought in who may buy the project at a haircut. In this case, our exercise would be to try and arrive at a blueprint on how much money, time and resources would be required to complete the last mile," Chatterjee added.