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Cash crunch hits efforts to solve crisis

As around 1 lakh homebuyers are eagerly waiting for the hearing of all Noida Extension land acquisition cases by the Allahabad High Court on August 29, the authority is facing financial crisis in settling the disputes out-of-court.

india Updated: Aug 27, 2011 00:52 IST
Darpan Singh

As around 1 lakh homebuyers are eagerly waiting for the hearing of all Noida Extension land acquisition cases by the Allahabad High Court on August 29, the authority is facing financial crisis in settling the disputes out-of-court.

The Greater Noida Authority has admitted that it does not have enough money to settle the disputes, as advised by the high court on July 26.

"There's no cash. We are even mulling allotting developed land to farmers instead of increased cash compensation. But cash will have to be paid to those not willing to settle for plots. Another challenge is that there is not much land left in the area. The final decision will be taken only after the court hearing," said a top authority official.

The authority intends to spend Rs 324 crore as increased compensation in village Patwari alone. Of the 1,700-odd farmers in Patwari, more than 1,100 have signed the pact and accepted cheques as per the revised relief.

Yet, around 300 petitions challenging the acquisition of land in 22 villages are pending in court. If the high court approves the Patwari pact and a similar arrangement is extended to other villages, the authority will have to spend Rs 4,000 crore more.

The authority has already taken loans worth Rs 4,000 crore to acquire and develop land in Noida Extension.

"For Patwari, we hiked the compensation from Rs 850 per sqm to Rs 1,400 per sqm. We are yet to decide on similar hikes for other villages. We hope the court will allow time for out-of-court settlements, which will save Noida Extension realty projects. But there is no money left. We have sought a loan of Rs 500 crore from the Noida Authority," the official said.

He added the authority didn't make profit in the sale of acquired land to builders. "Our per square metre land costs Rs 10,500 to Rs 11,000. We give industrial and institution allotments at subsidised rates. This was compensated from sale of commercial land."

He said, "We mortgaged property and took loans from banks. Cash flow has stopped. Banks may attach property in case of non-payment."

Two court orders last month set aside forcible acquisition of land in Shahberi and Patwari, affecting 26,500 buyers. Farmers want their land back to bargain for higher rates. In case of a Shahberi-like judgment, the entire Noida Extension project may be scrapped.

More than 60 builders had planned 2.5 lakh houses in about a dozen villages (3,000 hectares) in Noida Extension. Booking for 1,00,000 units (worth Rs 20,000 crore) had already been done. Buyers have invested R1,500 crore in pursuit of their dream houses.