Personal Finance

Gujarat Housing Board gets new lease of life

Virendra Pandit | Updated on August 06, 2011 Published on August 06, 2011

Targetting Tier I and II cities to build homes for the economically-weaker sections and low/middle income groups.

Unlike in 2002, GHB will be a nodal agency with a land bank this time; it also plans to outsource its work and tie up with CEPT, Ahmedabad, to make its projects environment-friendly.



Gujarat Housing Board (GHB), which had suspended construction of houses in 2002, is staging a comeback. It plans to start construction of houses in Tier I and II cities for the economically-weaker sections , low-income and middle-income groups, who are finding it increasingly difficult to own houses because of the rise in prices during the last six years.

GHB, founded in 1960, had constructed nearly 1.77 lakh houses for various categories until 2002, but had to stop the activity due to oversupply. “Out of nearly 2,700 surplus houses , we could sell only 2,100 in a decade. Even now, nearly 600 remain unsold,” Mr Jayantilal Barot, who was appointed the Chairman of the Board last year, told Business Line. The unsold houses are now in a bad condition and GHB will try to sell them on an “as-is, where-is” basis.

However, with nearly Rs 600 crore still remaining unrealised from 77,000 house-buyers, GHB is taking no chances of being faced with similar defaults in its second stint.

TIE-UP WITH BANKS

“ We would tie up with banks for housing loans. The customer would pay 25 per cent of the price on allotment of the house and take a bank loan for the balance cost. We do not want to get into the business of recovery of loans, interest or penalties.”

Earlier, like other housing boards, GHB used to get loans from Housing and Urban Development Corporation Ltd and other financiers on behalf of house buyers who usually bought houses on hire-purchase basis. “The banks have the means to recover dues and even evict the defaulters.”

Another novel feature will be the almost-complete outsourcing of the works it used to do earlier.

“We will be outsourcing work such as architecture, designing and construction etc. We also plan to tie-up with the Centre for Environmental Planning and Technology (CEPT) University, Ahmedabad, for making our projects environment-friendly.”

GHB will, for all practical purposes, be a nodal agency with a land bank, rather than the hold-all organisation it used to be until 2002.

This situation has arisen due to paucity of housing experts such as planners, designers, architects and engineers at GHB.

When it stopped construction in 2002, most of its experts were sent on deputation to other departments. “We now have only 220 staff, mostly clerical. Many among the 216 engineers and experts sent on deputation have either retired or are unwilling to return to GHB. Clearly, we will have to outsource all their work.”



AWAITING GOVT GRANT



GHB is awaiting a package from the State Government to kick-start its construction activity as well as recovery of dues. GHB expects to start work in the next two-three months with plans to construct low-rise houses in Rajkot.

At present, GHB has a land bank of 617 acres (7.04 lakh square metres) across two dozen urban centres in Gujarat. This includes 110 acres in Ahmedabad, 73 acres in Vadodara, 63 acres in Surat, 62 acres in Jamnagar and 46 acres on Bhavnagar.

For the recovery of dues, he said, GHB is trying to persuade the customers to pay the pending instalments and have the houses documented at the earliest so as to avoid eviction on account of mounting dues and penalty on their arrears.

GHB would also offer house-owner associations 3 per cent of recovered dues for maintenance, repair and other amenities. Nearly five years ago, the Gujarat Slum Clearance Board had merged with GHB and set up a separate Slum Clearance Cell to look after development of slum areas. The Slum Clearance Board had constructed 33,532 houses of its own and is yet to recover Rs 112 crore from beneficiaries.

GHB and the Slum Cell, together, now have a land bank of 617 acres across Gujarat. In the first phase of revival, GHB is planning to start construction at two places in Rajkot, and one place in Vadodara, followed by a multi-storeyed building at three places in Ahmedabad.

Published on August 06, 2011

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