Greater Noida Industrial Development Authority (GNIDA)...a must read for all and be aware

[Raj]

Built- up Housing Scheme 09 (BHS-09)

A Synopsis

The BHS-09 scheme is a scandalous, deceptive and biased housing
scheme launched by GNIDA under which a total of 3000 built-up houses
are being built in Sectors 03, Xu-II and Xu-III. While initially the
general public could not see through the guise of GNIDA, now a large
number of allottees are seeing through the guise and coming together
to put up a united front against this public fraud by a Government
organization. Below are the salient points that expose the massive
duping of General Public by an organization of a Government that was
elected by that very General Public. A Government which, while taking
up office, had taken up an oath to safeguard the interests of the
General Public that elected it into office.

1. GNIDA forcefully acquired land from farmers,
against their wishes, and paid them a paltry sum of Rs. 406.00 per
square meter that was fixed in 2006. When the farmers protested, five
of them were shot dead and all public leaders supportive of the
farmers’ cause were prevented from coming to the site of agitation
i.e. the Office of GNIDA in support of the agitating farmers.
Subsequently, in some cases, the compensation amount was raised to Rs.
850.00 per sq. meter.

2. A part of this land, which was acquired at a
maximum cost of Rs. 850.00 per meter, was then sold to general public
at Rs. 10,500.00 per square meter. Even if the open areas comprising
roads, streets, parks, public utilities etc. may comprise 60% of the
total area, there is a profit of at least 500% on the land only. One
should not forget that the 60% open area remains the property of GNIDA
on which it will be charging taxes, fees, charges and in all
probability selling portions at huge margins for commercial use to
private players. All this while it has already recovered the
acquisition cost, with a huge profit of 469%, from the allottees
themselves. As technically only the plot area is sold to the
allottees and the others areas out of the acquired land remains the
property of GNIDA, on each square meter of land GNIDA makes a profit
of at least Rs. 8,000.00 (10,500 – 850 – max. development charges @ Rs.
1,630.00 per sqm.). Hence total profit for GNIDA from selling 3000
houses, each on 120 sq.m. of land is Rs. 288,00,00 ,000.00 (Rupees Two
Hundred and Eighty Eight Crores).

3. GNIDA opened the BHS-09 Scheme on 16 Feb 2008
with the closure date of 08 March 2008 . The registration money per
application was kept at Rupees Three Lakhs per applicant.
Considering a minimum 1:100 ratio between plots available and
applicants, there must have been at least 3,00,000 applications
amounting to a receipt of Rs. 90,00,00,00,000.00 (Rupees 9,000
Crores). This money was retained by GNIDA for about 4 months thereby
earning an interest of Rs. 3,30,00,00,000.00 (Rupees 330 Crores).

4. Considering that all the forms sold were used for
applications, at least 3,00,000 forms were sold @ Rs.1,100/- each,
earning GNIDA another Rs.33,00,00,000.00 (Rupees Thirty Three Crores)
as the sale proceed of forms. The cost of form printing would not
have been more than a few Lakhs only.

5. Thereafter, it returned the registration money of
unsuccessful applicants, retaining the money of successful applicants
amounting to Rs.90,00,00,000.00 (Rupees Ninety Crores). This money
was then retained for a month till the Allotment Money of Rs.
6,00,000.00 (Rupees Six Lakhs) each was deposited. The continued
retention of Rs.90,00,00,000.00 (Rupees Ninety Crores) for a month
earned them a further interest of Rs. 82,50,000.000 (Rupees Eighty Two
Lakhs and Fifty Thousand).

6. From August 2008 till February 2009 (seven
months), as per its own original computation, GNIDA should have
retained Registration Money and Allotment Money of 3000 houses under
BHS-09 amounting to Rs. 270,00,00,000.00 on which GNIDA earned an
interest of Rs. 17,32,50,000.00 (Rupees Seventeen Crores Thirty Two
Lakhs and Fifty Thousand).

7. Hence till date, on BHS-09, GNIDA has earned more
than Rs.957,15,00,000.00 (Rupees Nine Hundred and Fifty Seven crores
and fifteen Lakhs). Considering the Location Percentage of up to
15%, large number of cases where cost of land acquisition was less
than Rs. 870.00 per sqm, and other streams of revenue, the net gain of
GNIDA, till date, is in excess of Rs. 1,000 Crores only from BHS-09.
That too when nothing has been done at site and the land remains in a
condition close to what it was when it was forcibly acquired from
innocent farmers. Definitely there could be no better business in the
world than playing “Government of Uttar Pradesh”.

But, this income is not enough for GNIDA as the greed has crossed all
thresholds. Also GNIDA has an unwritten motto of “Treat the General
Public as Garbage”, all under the aegis of Government of Uttar
Pradesh. This is clear from the below mentioned points.

8. Erroneous and fraudulent interest earnings by
GNIDA:

The only payment option provided by default by GNIDA is a
“Construction Linked Plan”, cleverly disguised and phrased as a “Four
Year Installment Plan with interest”. The pace of progress, the
upcoming tender, the prevalent tender terms, building practices etc.,
all hint that GNIDA will give this tender to a private party of their
choice and pay them periodically as the construction progresses. The
final payment will be made only after complete hand-over and
rectification of the “Snag List”, if any. Even thereafter, an amount
of about 5% of total tender cost should be retained for a certain
period, which is in line with the building practices prevalent.

As GNIDA must have realized all the money it disbursed against
acquired land from the Registration Money itself, it is only the cost
of construction that has to be paid to the builder which is always
linked to the progress in construction at site. Hence the GNIDA is
fleecing General Public (read allottees) by charging not the published
cost of house at Rs. 29,98,000.00 but an additional amount of Rs.
6,00,000.00 (Rupees Six Lakhs) (approx.) towards interest charges from
each allottee. Whether the allottee pays the total cost upfront
(after specially requesting GNIDA for a full payment option) and GNIDA
earns interest on it, or the allottee chooses the Installment Plan and
GNIDA earns interest on it, both ways GNIDA is unethically and
deceitfully earning a huge interest component which should not be
applicable at first place.

As per prevalent business practices, either there should be a
substantial discount on full up-front payment of Rs. 29,98,000.00 or
this amount should be charged under “Construction Linked Plan”,
whereby a certain percentage becomes chargeable as the construction
progresses and the total amount of Rs,. 29,98,000.00 becomes fully
paid up just before possession is handed over to the allottee.

9. Excessive Construction Cost:

As per schemes launched around the same time as BHS-09, plots
measuring same 120 sq. meters were sold @ Rs. 10,500.00 per sqm.
Thereby the cost of a 120 sq. plot comes to Rs. 12,60,000.00, whereas
the cost of built-up house is being charged at Rs. 29,98,000.00
(tentative). Hence the cost of construction for a single story house,
built on 120 sq. meter plot, is being charged by GNIDA at Rs.
17,38,000.00 (Rupees Seventeen Lakh Thirty Eight Thousand) which is
more than double as per the present cost of construction indices.

10. Application of Location Charges on Cost of
Construction:

GNIDA is selling both plots and houses of 120 sq. meters and charging
location charges on both. Once build, both kind of houses will
command similar location premium in the market. But in case of a
plot, the location charges imposed are only on the cost of land
whereas in case of houses, it is on the entire cost of the house,
including the cost of construction. As such, an allottee might have
to shell out up to the extent of 15% i.e. Rs.2,60,700.00 just as extra
location charges towards cost of construction. This is another example
of blatant cheating as cost of construction has nothing to do with
location. Neither the builder hired by GNIDA is charging extra for,
say, a park facing houses nor GNIDA is spending anything extra for
that. Hence why should GNIDA charge the extra money, thereby duping
the poor allottee?

11. Installment Amount too high for common person:

The only “Payment Plan” offered by GNIDA (Para A-5.1) is the “Four
Year Installment Plan with Interest”, whereby an allottee has to pay
around Rs.3,50,000.00 every six months. Hence for such an individual,
the equated monthly provisioning comes to a mammoth Rs.58,333.00.
Keeping other expenses in mind, the monthly take home salary/income of
this person should be more than Rs. 80,000.00 and the gross monthly
income (keeping in mind the obvious top Income Tax slab of 30%) around
Rs. 1,14,500.00. Obviously a person looking for a 120 sq meter house
with two bedrooms does not earns that kind of money.

This only proves that while planning, GNIDA only thought of its
Construction Linked Payment to Builder and the huge profit margins.
That is why it offered poor allottees only an installment plan that
suited GNIDA the most. This way they get a steady flow of revenue and
also save on taxes that would have been levied on interest that would
have accrued had all the money come up-front. Eventually, GNIDA end
up in huge profits at the expense of poor allottees.

12. “As is where is basis??”

While the proposed specifications for built up Houses is provided on
page 13 of the brochure, Para C, Section III, Page 8 clearly mentions
that “the house will be accepted by the purchaser on “As is where is
basis”” which connotes that even if the doors and windows are missing/
stolen or the floor is broken or the fittings and fixtures are of poor
quality, broken or missing, the purchaser, who has invested his life’s
earning into the house, cannot complain or demand anything.

13. Biased terms towards allottees:

In case of any default, delay, excess variation or poor quality
construction by GNIDA, they may, at their discretion, return our money
without any interest, whereas, if due to any reason (present recession
being a major issue) the allottee is not able to live up to his
obligation, he shall be fined heavily to the extent of full forfeiture
of all the money he has paid GNIDA.

As this is a big issue and the fraudster is a Government Organization,
we need to come forward and form a United Front. For putting forward
our consolidated voice, we will have to form a Registered BHS-09
Allottees Welfare Association. The action plan should be to
collectively communicate with GNIDA under the Welfare Association
banner, form pressure on GNIDA from the Political and Media Fronts.
In case the desired results are not forthcoming soon, we will have to
file a suit in the appropriate court of law. I am personally sure
that with all the above frauds and blunders, GNIDA does not have a
strong case and will have to give way. A good stand from our side
will be to ask for plot instead of built-up house as this will remove
most of the deceits and unethical deeds of GNIDA.