A few black sheep are tarnishing the entire clan, says Builders' Association of India (BAI), Bihar chapter, chairman Sachin Chandra when asked about daily reports of illegal constructions. Vithika Salomi talked to him about the real estate sector in Bihar, the much awaited building bylaws and the likely scenario post its notification. Excerpts:
With the change in government in 2005, the real estate sector saw an unprecedented boom. What is its status now?
For the last two years, there's stagnation in the real estate business. The demand is robust and people have the purchasing power. But, due to some policy problems, the demand isn't converting into actual market. I see it as a reason for the lowering growth rate of Bihar as real estate contributes significantly to the state GDP and also has a three times multiplier effect because it supports about 300 other industries.
What are the policy-related issues plaguing it?
The state government, through a notification issued in December 2012, banned the approval of maps for any multistorey building over 11 metres height till the proposed building bylaws come into effect. Later, the Patna high court ordered that any multistorey building taller than 11m can come up only if the adjoining road is 20ft wide. Where else do we see that an existing policy is completely stopped before the new law comes into effect?
When are the building bylaws coming into effect, according to the officials?
We have met different ministers and even the then CM Nitish Kumar at least 10 times. Each time they say 15-20 days more, but that 15-20 days didn't come. As per our information, the state law department has approved it. A state government's affidavit submitted to the Patna high court says it will be notified before November 10.
How much money is stuck in the market because of this?
The association estimates suggest the delay in notification of building bylaws has wedged about Rs20,000 to 25,000 crore in Bihar in projects for which land has been acquired but building plan isn't approved. Besides that, construction of 1,220 buildings in Patna (whose building plans are approved) has been stayed due to some court litigation which amounts to about Rs15,000 crore. About 60% of this money is of customers and, by implication, belongs to the financial institutions if they've loaned the sum. There is no serious thought at government level - politicians or bureaucrats - to settle the issue.
Once the bylaws are implemented, what will be the real estate scene?
A number of big projects in the pipeline will follow the building bylaws. There is a robust market in the state because of its high population density of 1,102 per sq km. In Patna, the pressure on real estate is much because there is no other city parallel in infrastructure and amenities. The assembly elections next year and law and order situation in the state will also decide the matter.
Does the BAI do anything about realtors who flout construction norms?
There is an unwritten code for the BAI members (210 in Patna). Builders, while signing the membership form, declare they'll not indulge in any malpractices. But, definitely, there are some who indulge in wrong practices. Though we don't have legal powers, we boycott such members. If people have any grievances, they can email us at 'email@example.com'.
What should be a buyer's checklist before booking a flat?
The documents are the most important element and the easiest way to verify it is by buying the house on a loan as banks are better placed to check the veracity of the papers. The maintenance scheme, fire safety norms, parking and driveway, waterproofing of basement, CCTV cameras, security guards, etc, should also be checked. When a person goes to buy a kilogram of potato, he inspects it 5 times. Why shouldn't he do all background checks where he has to invest lakhs of rupees of his hard earned money?
Which metropolitan trend is yet to touch Patna?
The concept of township is still not here. If the government creates a land bank and provides road and power, the private players will do the rest. However, skyscrapers have started coming at Muzaffarpur, Bhagalpur and Gaya in Bihar.