DELHI: To meet the deadline of both residential and commercial projects and bring the prices down by at least 10 per cent, the Noida-based realtors have demanded for Environment Impact Assessment (EIA), a norm for provide auto environmental clearance to all types of real estate projects in India.
Realtors opined that the norm promised by former Minister for environment and forest (MoES) Jairam Ramesh would help the project time frame to come down by around one to oneand-half years which in turn would lead to price correction by at least 10 per cent.
Sunil Mantri, president, National Real Estate Development Council (NAREDCO) said, "In 2011, the former Union Minister for Environment and Forests Jairam Ramesh had made an announcement that builders will no longer have to get the mandatory EIA study for residential and commercial complexes if their constructions adhere to green norms as prescribed by international agencies. The Ministry has yet to come out with necessary procedure for implementation of this amendment."
He further added that rather than managing environment clearance at a micro level, all projects falling in the overall management of area should receive automatic clearance. This will save hardships and in the real sense, environment can be managed in a professional way.
NAREDCO president suggested that the government should come out with an Ordinance at the earliest for Auto Clearance of projects which are rated Green by agencies such as LEED /GRIHA etc. He further suggested for a speed mechanism which is online approvals that would take just 60 days.The ministry should also scrap Individual project clearances and should come up with Environment clearance on the lines of Development Plan.
Anil Kumar Sharma, president, CREDAI-NCR chapter echoed similarly. "It would help contain the delay in possession period due to the environmental clearances." He said that generally, it takes around two years to get environmental clearance from the MoEF. When the EIA ordinance is implemented, it would take just six months, means the possession period, that generally a real estate project takes would come down by around one to one and half years.
Since, delay is directly related to the project cost, the sought ordinance will result in correction of the real estate prices as well. CMD of the Amrapali Group added, "It depends upon the location of the project. If it is in Delhi-NCR, the project cost would come down by around 15-20 per cent while in case of Mumbai or Bangalore, the project cost is expected to come down by10 per cent with the implementation of EIA."
Relating this to the price correction in the affordable housing sector Anil Sharma said, "Majority of the developers announce the new project with undervalued prices as they expect it to increase in coming years. This helps them get money to proceed with the project. They open around 25-30 per cent of the net units. So, I expect around 15 per cent correction in prices in Delhi-NCR, as the majority of the project would be completed in two-and-a-half to three years time if EIA norm is implemented." He said that price correction would help end users avail the one per cent interest subsidy on home loans.
Muzaffar Zia, director, Glorice Consultancy, a real estate consultant said, "There are several factors— raw material price, land price, labour payments, other municipal clearances etc— which affect the project in case there is delay in environmental clearance."
He added, " The EIA norm is expected to address these issues because these days' developers keep the environmental clearance delay in mind while announcing a new project and they price their units with these variables in mind. Once these variables are removed, the economical advantages coming into the pocket of developers will definitely be passed onto (even partially) the end users."