Next set of smart cities to be announced today

The Centre will announce the next set of cities for financing under the Modi-government flagship Smart City Mission on Tuesday.

As per the Mission guidelines, as many as 40 cities have to be announced during this financial year. As the government had already announced 13 cities in May, a slot of 27 cities remains vacant against which the announcement would be made by Urban Development Minister M Venkaiah Naidu on Tuesday.

In January, the government had announced a list of 20 cities for partial funding to be developed as smart cities which would have facilities such as assured water and power supply, sanitation and solid waste management systems, efficient urban mobility and public transportation, IT connectivity and e-governance, among others.

Each city will receive Central assistance of Rs 200 crore in the first year and Rs 100 crore over the three subsequent financial years.

State governments and respective urban local bodies will also match the Centre's contribution.

The Modi-government aims to transform about 100 cities by 2019-20, with the Centre providing financial support of Rs 48,000 crore over five years.

SOURCE: ETRealty

RERA to pull down number of project launches in India in short term: Colliers

New project launches are likely to witness a drop in the short term largely due to the fact that fewer projects will be ready for registration as developers will wait to see how the new norms pan out and how other projects fare with the Real Estate (Regulation & Development) Act (RERA) coming into force, said property consultant Colliers International in its latest report "Developers, get on Board".

Surabhi Arora, Senior Associate Director, Research, at Colliers India, said, "The key issue for developers is to prepare for the changes at the earliest as the Act applies to all existing projects as well. Based on our analysis, an improvement in project planning should help developers to avoid delays and manage project funds efficiently. Adopting the process early on will give developers an edge over their competitors and generate trust among buyers".

One of the major impacts of the RERA is that currently, all major cities in India have high unsold inventory, so lower new project launches should ensure equilibrium in demand in the residential sector. However, this may lead to price rises in preferred and under-supplied mature markets, whereas over-supplied markets should be less impacted.

Over time, RERA should weed out speculators in the Indian property market and push it towards maturity. It is important for developers to prepare for the changes promptly since the Act applies to existing as well as future projects, said Colliers report.

An improved project planning will help developers avoid delays and manage project funds efficiently, said the report, adding that it would be prudent to hire planning professionals to take all steps to ensure timely project completion. Making such preparations early should give developers an edge over rivals and boost buyers' trust.

Over the past two years, the real estate sector, especially the residential sector, has been reeling under pressure. This is the same sector which had witnessed a golden era in the past decade. However, currently, buyers are hesitating from buying despite the fact that there is a shortage of about 29 million houses in India. Buyers' sentiment in the last two years has been at an all-time low primarily due to delay in delivery of projects, quality-related issues, escalated prices, and availability of limited recourse for a real estate consumer in case of conflicts with the developer.

"Buyers' sentiment is already uplifted based on several expectations from the Act. We have started witnessing a lot of positivity among buyers now, which will eventually convert into demand," says Sumit Jain, National Director, Residential Services at Colliers India. "On the supply side, we expect a drop in new project launches in the short term because, developers may adopt a wait and watch approach. However, as all the major cities in India have high unsold inventory, so the drop in new project launches should help the residential sector to maintain supply-demand equilibrium."

SOURCE: ETRealty

SC stays NGT order asking metro, freight corridor to get green nod before pressing on

The Supreme Court on Friday stayed National Green Tribunal orders that had made work on the Noida-Greater Noida metro and the Mumbai-Delhi-Kolkata freight corridor conditional on getting green clearances. The court ruling clears the legal hurdles, at least for now, in way of these projects.

The NGT had in orders passed in May and July ruled that these projects required clearances under the environment ministry's Environment Impact Assessment Notification of 2006, issued under the Environment Protection Act.

The ministry insisted that these projects were not covered by the notification, but the NGT ruled otherwise. On Friday, the issue was raised by Attorney General Mukul Rohatgi before a bench comprising Chief Justice TS Thakur and Justice AM Khanwilkar.

"Roads have been dug up throughout the country in most cities. By getting people to travel by the metro, the metro is actually reducing pollution," he said.

Both the metro and the freight corridor corporations had challenged the NGT orders through advocate ADN Rao.

The AG said these the projects figured on the list of those excluded from the notification.

The NGT had passed the orders on pleas filed by activist Vikrant Tongad who had drawn its attention to the fact that work on these projects had commenced without the green nods and that these were seriously prejudicial to the environment.

Some of the work would affect the Hindon river bed and plains, he argued, besides the flora and fauna in the area. The NGT had directed that these projects either get post-facto clearances or stop all work.

The NGT had asked the project proponents to obtain environmental clearances within three months and asked the authorities to consider both remedial as well as precautionary measures that were required to be taken before allowing work to go ahead.

SOURCE: ETRealty

NHAI to give Rs 6,000 crore to firms stuck in litigation

NEW DELHI: The National Highways Authority of India (NHAI) plans to release Rs. 6,000 crore to developers stuck in litigation under the new policy announced at the end of last month, a measure that will help banks recover some stuck loans while also providing funds for stalled projects.
The government has asked its departments and ministries along with public sector entities to release 75% of disputed amount where the developer or concessionaire has won an arbitration case.

Niti Aayog, which piloted the policy, has written to ministries and departments to act on the decision quickly . At present, 123 dispute cases worth Rs. 25,000 crore are pending with NHAI, including cases worth ` . 13,000 crore awarded in favour of private parties.

"In overall cases that have gone against us till date, the amount has been ` . 13,000 crore. We have already amicably settled claims worth ` . 5,000 crore," a senior NHAI official said on condition of anonymity . "So, 75% of the remaining . 8,000 crore t hat has to be released ` under the new guidelines works out to be ` . 6,000 crore. We'll start paying that amount on case by case basis. The claims are related to around 20 companies."

The payment process will be initiated as soon as the private party sends NHAI a letter. "Now this will be dependent on the private party as it needs to have a bank guarantee to back up the award claim. We are also revising our agreement format so that the company doesn't back out from bank guarantee," the official said.

Hindustan Construction Company (HCC), which has already been awarded claims worth ` . 3,400 crore against various government departments, has sought release of . 1,000 crore from NHAI.` "On Tuesday, we received a letter from HCC asking for a payment of . 1,000 crore. We'll start looking in` to their claims," the official said.

HCC had in a statement said it has `. 3,200 crore arbitration award and 75% of it should be released.

Under the new guidelines clea red by the Cabinet Committee on Economic Affairs, government agencies will pay 75% of the arbitral award amount to an escrow account against margin-free bank guarantee. The escrow account can be used to repay loans or to meet commitments in ongoing projects.

The move will allow recovery of loans by banks and allow companies to speed up ongoing projects. A . 70,000 crore in various sectotal of ` tors is stuck under arbitration.

"Construction companies are reeling under liquidity crunch... Even with the release of 75% of amount this would...allow them to make a variety of payments to banks, suppliers and bid for more contracts," said Vinayak Chatterjee, chairman of Feedback Infra.

Source: ET Realty

Government plans Rs 3L-cr corridor to build 35,000km highway network

Government may soon come up with an ambitious Rs 3-lakh-crore Economic Corridor project to develop 35,000 km of highways for faster movement of freight.

This would be the second largest project in the sector after the flagship road building programme of NHDP which saw development of 50,000 km of National Highways network as per global standards including the Golden Quadrilateral project.

The Golden Quadrilateral project aims at connecting all four metropolises and North-South Corridor connecting Srinagar to Kayakumari and East-West Corridor joining Porbandar to Silchar.
"A Road Transport and Highways Ministry-appointed study for economic corridors by global consultancy firm AT Kearney has identified 40 such economic corridors totaling about 35,000 km," a Road Transport and Highways Ministry official told PTI.

The project is aimed at faster movement of cargo and would not only under developing economic corridors with a length of about 21,000 km but also developing 14,000 km of feeder routes, i.e. providing connectivity to logistic hubs, the official said.

"A rough estimate suggests about Rs three lakh crore on the project and the scheme is being finalised," he said.

The economic corridors include Mumbai-Cochin-Kanyakumari, Bangalore-Mangalore, Hyderabad-Panji and Sambalpur-Ranchi to name a few, the official added.

The official said the project would be taken into phases and would be awarded under various modes that include build, operate, transfer (BOT) toll mode and the newer hybrid annuity mode (HAM) under which the while the government provides 40 per cent of the project cost the developer has to arrange for remaining 60 per cent.

Once completed the economic corridors would reduce the travel time and result in reduction in logistics costs.

Road Transport and Highways Minister Nitin Gadkari has been stressing on the need for reducing logistics cost in the country from the present 18 per cent.

Noting that high logistics cost has been one of the major bottlenecks in trade and business the Minister has been stressing the need to develop innovative methods for transport.

The proposed Economic Corridor is planned to overtake Ministry's National Grid Project where NHAI has prepared a plan for grid connectivity through 27 horizontal and vertical highways.

SOURCE: CREDAI NCR

Sebi orders freezing of demat,bank a/c of PACL's 640 group cos

NEW DELHI: Seeking to recover more than Rs 55,000 crore of investors' money from PACL Group, regulator Sebi has ordered freezing of bank accounts as well as demat and mutual fund holdings of as many as 640 group entities.

In a directive to various banks, depositories and mutual funds, Sebi has asked them to ensure that "no debit" is made with immediate effect in any of the bank accounts, lockers, demat accounts and mutual funds of these 640 entities, to which the PACL Group is suspected to have transferred money, including for purchase of properties.

It also asked them to give details of loans accounts along with details of the assets charged for these advances. Also, they have been directed to produce a copy of account statements for the past one year of these entities.

Besides, banks, depositories and mutual funds have been asked to give confirmation of the debit freeze of the accounts held by these entities.

The move is part of Sebi's effort to protect the interest of investors'.

PACL, in a letter, admitted that it purchased lands in the name of its group or associate companies.

The group, which had raised money from the public in the name of agriculture and real estate businesses, was found by Sebi to have collected these funds through illegal collective investment schemes over a period of 18 years.

Pursuant to a Supreme Court order, Sebi had set up a high-level committee to ensure that refunds are made to the genuine investors after sale of attached PACL assets including vehicles.

The panel, chaired by former Chief Justice of India R M Lodha, is overseeing the process of disposing of assets to refund money to investors after verifying their genuineness.

The Securities and Exchange Board of India (Sebi) has put on the block real estate properties of the group across 192 districts, including Punjab and Rajasthan. Last month, it auctioned top-end vehicles of PACL Group.

Last December, Sebi ordered attachment of all assets of PACL and its nine promoters and directors for their failure to refund more than Rs 55,000 crore due to investors -- the biggest amount for any such case.

PACL had raised Rs 49,100 crore from nearly 5 crore investors that it needs to refund along with promised returns, interest payout and other charges, which took the total amount due to over Rs 55,000 crore, as per the Sebi order.

Besides, PACL's group firm PGFL "illegally mobilised more than Rs 5,000 crore and failed to refund the same in spite of directions of Sebi and SAT", the regulator had said while initiating the recovery proceedings.

Sebi had asked them to refund the money in an order dated August 22, 2014. The defaulters were directed to wind up the schemes, and refund money to the investors within a period of three months from the date of the order.

Source: ETRealty 

GMR, MEP Infra & IRB Infra get Sebi nod to launch infra investment trusts

More than two years after markets watchdog Sebi had issued guidelines for infrastructure investment trusts (InvITs), the regulator has finally granted three companies -- IRB Infrastructure, GMR and MEP Infrastructure -- to launch the trusts.

Accordingly, these companies will float IRB Invit Fund, GMR Infrastructure Trust and MEP Infrastructure Trust shorly as per Sebi, which is likely to relax norms for the real estate investment trusts (REITs) and InvITs later this month.

With a view to help infra developers mop up funds for long-term projects in a more transparent manner, Sebi had in August 2014 introduced InvITs -- an investment vehicle that would enable promoters to monetise completed assets.

But the move failed to get enough attention of businesses owing to taxation issues.

Following this, Sebi had recently said its board would look at relaxing the guidelines for both REITs as well as InvITs.

The Sebi board is expected to allow REITs and InvITs to have up to five sponsors, as against the present provision of only three.

Under the proposal for InvITs, Sebi may allow such trusts to invest in two-level SPV (special purpose vehicle).

The regulator plans to remove the restriction on the SPV to invest in other SPVs, thus allowing InvIT to invest in a holding company which subsequently holds stake in SPVs.

Currently, InvIT holds a controlling stake in SPVs that do not invest in other SPVs.

Meanwhile, IRB Infrastructure in a regulatory filing on September 8 had announced that IRB InvIT Fund has filed the draft red herring prospectus with Sebi for Rs 4,300 crore initial public offering.

The Mumbai-based toll road developer is the sponsor of IRB InvIT Fund (the trust) which is registered with Sebi.

SOURCE: ETRealty