MUMBAI: Home buyers in Mumbai can now expect delivery of their homes faster owing to a recent government directive that has allowed construction work on building projects between 6 am and 10 pm, an effective extension of four hours every day.
These extended construction work hours, permitted as part of the state’s ‘ease of doing business’ initiative, from earlier stipulated timings of 7 am to 7 pm, has expedited construction activity by over 10% in the city. In addition to this, developers are also expected to gain on account of lower interest cost as the project is likely to be completed faster.
“The decision to increase work hours by the civic authority is directed towards faster delivery of projects and will provide momentum to the construction activities. This will drive deliveries of the projects and help developers avoid consumer issues that may arise with delays. Timely delivery of the project will also help in reducing the cost of servicing debt over the project’s life cycle,” said Harleen Oberoi, managing director, project management,-India, Cushman & Wakefield.
Real estate developers have started using these extra hours for construction work actively for the last two months following the circular issued by the Municipal Corporation of Greater Mumbai.
“Given the pace of construction in the last two months, we are confident of reducing our project cycle by more than a couple of months.
“We have completed our three projects in Bandra, Khar and Chembur (suburb of Mumbai) within 24-30 months with earlier permitted work hours. With four additional hours every day now, we hope to complete our ongoing projects with at least 10% reduction in time required usually,” said Sunny Bijlani, director of Supreme Universal that has 12 ongoing residential projects in Mumbai.
However, the impact will be limited to those projects and developers that have adequate financial liquidity and required approvals in place.
According to Oberoi, there are other aspects that also cause delays in construction such as availability of labour, material movement and weather conditions. The main factor that delays delivery of projects, however, remains construction capital which developers of residential projects, especially in the mid-ranged housing, are faced with. While the construction work hours have been extended, the usage of heavy construction machinery with high decibel may still be a challenge after typical work hours of 7 pm. Developers would also have to ensure that the construction work does not disturb residential neighbours. Around one third of more than 25 lakh apartments launched between 2008 and 2014 were delayed by at least a year, as per industry reports and estimates. High debt and inventory has led rating agency India-Ratings Research to revise its rating outlook on the real estate sector to negative for FY 2016-17.
Credits ET Realty