Telangana govt for fresh talks with 2BHK contractors

HYDERABAD: Chief Minister K Chandrasekhar Rao’s pet scheme of providing two-bedroom houses for the poor continues its struggle to take off despite the government offering a lucrative deal for contractors to build houses. In the six months after the chief minister promised one lakh such houses for Hyderabad, the scheme has not moved beyond foundation-laying for houses at 20 places in the city.

The main reason for the tardy progress is shortage of funds, while other issues include land acquisition and price fixation for construction of houses.

After failing to rope in contractors to build the houses, the government mooted an idea of joint development with construction companies providing them with a business opportunity. With the proposal doing little to enthuse real estate companies, the government is back to the starting point of hunting for contractors.

“The joint development of the houses with construction companies was just an idea we toyed with. The actual model we are looking at is building houses through contractors, and are now engaged in price negotiations with them,” said housing minister A Indrakaran Reddy. Previous negotiations with contractors failed with the government sticking to its offer of Rs 800 a square foot and contractors refusing to settle for less than Rs 1,000 per square foot. The houses are being planned at an estimated cost of Rs 5.30 lakh per unit in urban areas and Rs 5.04 lakh in rural areas.

As the government gears up for fresh negotiations, it has agreed to enhance the price to Rs 900 per square foot, while contractors are still sticking to their Rs 1,000-a-square-foot demand. Reddy, however, exuded hope that talks would be a success and construction would start in July. “I hope the price fixation would be done in a day or two,” said the minister.

Doubts, however, are being expressed about the scheme taking off any time soon. “Budgetary provisions were not made for the scheme, which means the government has to raise funds through borrowings. The question is that how can the government go for such a large-scale borrowing when it is not allowed to,” said BDA Satya Babu Bose, director of Budget Centre and Governance Accountability, studying the two-bedroom houses project as a special focus study.

In all, the government has proposed 2.65 lakh houses across the state at an estimated cost of Rs 17,000 crore. Indrakaran Reddy said the HUDCO had already released Rs 3,500 crore and has in principle agreed to sanction another Rs 10,000 crore. While over 10,000 acres are needed, Reddy said the government would utilise land in its possession before acquiring private land. “While there are challenges, the government has identified them and accordingly plans are in place. We will keep our promise,” he said.

Credits ET Realty

Leave a Reply

Your email address will not be published. Required fields are marked *