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Telangana forms panel to divest from Swagruha housing project

V Rishi Kumar Hyderabad | Updated on March 12, 2020 Published on March 10, 2020

Representative Image   -  Bloomberg

The assets will be disposed of viaan auction on an ‘as-is-where-is basis’

The Telangana government has constituted a high-powered committee of secretaries to take forward the government proposal to dispose of all assets relating to Telangana Rajiv Swagruha Corporation Ltd.

As per plans, it is now proposed to divest these assets through an open auction on an “as is where is” basis.

Chitra Ramachandran, Special Chief Secretary, Telangana, in an order issued on Tuesday, constituted the committee to work out the modalities for the disposal and raise resources.

To provide affordable housing to the urban middle class in the State, the government had announced the Rajiv Swagruha housing programme and constituted Andhra Pradesh Rajiv Swagruha Corporation Ltd (APRSCL) under the Companies Act.

‘Rajiv Swagruha’ was launched in all municipalities and municipal corporations and the corporation had ambitiously planned 32 projects, consisting about 46,565 units entailing construction of about four crore square feet, with an estimated cost of about ₹8,504 crore.

Twenty housing projects with a project cost of ₹6301.01 crore were flagged off between 2008 and 2011 by mobilising bank loans. In 2011, Rajiv Swagruha faced a financial crisis and all operations came to a standstill.

A bailout package was recommended by a group of ministers and a high-powered committee headed by the Chief Secretary. A decision was also taken to leave the works in an “as-is-where-is condition” and agreements with the contractors were foreclosed.

Focus on transparency

By that time, an amount of ₹1,621.26 crore had been spent on projects, which were all shut down. All projects are, hence, incomplete and unfit for occupation in their current stage.

After the formation of Telangana, Rajiv Swagruha Corporation cleared the bank loans along with interest by paying ₹1,071.39 crore with the support of the state government. This resulted in the release of all projects from mortgage.

Later, the government decided to allot the finished and semi-finished flats that are part of the Bandlaguda and Pocharam projects to government employees based on certain guidelines.

However, superseding the orders issued earlier, the government has decided to dispose of all the assets of Telangana Rajiv Swagruha Corporation, including the properties at Bandlaguda and Pocharam, by conducting an open auction in a fair and transparent manner.

The proposed auction will be conducted in an “as is where is” basis, after fixation of the upset price based on the recommendations of a reputed consulting firm that is well-acquainted with the real estate market.

Published on March 10, 2020
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