Unitech gets plot payment rescheduled

The Greater Noida Industrial Development Authority has rescheduled payments for land that it has sold to Unitech, the country's second largest real estate company.

Unitech had purchased a 100-acre plot in 2006 for around Rs 400 crore from the authority. It has already paid around 60 per cent (nearly Rs 250 crore) and the balance was scheduled to be paid in six-monthly installments by 2010. The company is constructing a residential project at the site. For the most recent installment due in September, Unitech had approached the authority seeking the payment be rescheduled on the grounds of not having been given full possession of the land.

When contacted, Lalit Srivastava, chairman, Noida and Greater Noida Industrial Authority, said, “The company had approached us three days prior to the due date. We have rescheduled the payment.”

“It is not the financial crisis alone that is responsible. Even in the good times of 2006 and 2007, some companies had asked for payments to be rescheduled and the requests were granted,” Srivastava added.

The development comes at a time when tight liquidity conditions and falling real estate prices have squeezed developers, many of whom are believed to be raising money at very high rates of interest to fund their business.

Unitech said it had not paid up due to an ongoing dispute with the authority over possession of the land and forced stoppage of construction work by villagers in the vicinity of the land. Of the 100 acres, around 25 acres are yet to be handed over. This has caused a contiguity problem, he said, adding that protests by villagers had led to stoppage of construction.

“There are problems in possession and construction that the company has faced. We had sought a re-schedulement. We are told that the request will be granted,” company sources claimed.

Sources added Unitech was not the only real estate firm that was facing this problem. They added that in all four developers had recently approached the authority to reschedule payments and resolve the problems they were facing.