Built-up Houses Scheme Welfare Association
Greater Noida
(Registration No. S/65798/2009)

(formerly BHS09 Forum)

Causes for Concern

 

1.      First Time Introduction of Interest

 

Till BHS08, there was a provision of paying through a “Interest Free Installment Plan” whereby the allottees could either pay cash down or pay an equal amount through interest free installments.  BHS09 is the First Scheme where interest was levied and made payable on day one.

 

2.      Excessively high installment:

 

The only payment option offered in the brochure and also on Allotment Letters is a “Four Year Installment Plan with Interest”.  Under this plan, a middle class allottee has to pay close to Rs.60,000/- per month on a half yearly basis, that too in a recession hit economy.  It seems that this plan is actually a “Construction Linked Plan” with installments linked to tendering & construction phases when GNIDA should need money to pay to builder/s.  Otherwise there could be no justification for asking unpractical and huge installments from middle class allottees.

 

3.      Unjustified and Illogical interest:

 

The cost of a house, which will be ready after 3 years, is Rs.29.98 lakhs. Making this entire amount due at the time of allotment itself, especially when GNIDA will be needing money much later at various construction phases, has resulted in GNIDA earning unjustified interest of at least Rs.6,00,000/- per allottee. This is true for both options i.e. Upfront Payment (GNIDA earns interest) or Installment Plan (allottee pays interest).

 

4.      Application of Location Charges on Cost of Construction:

 

Location charges are levied in sync with the premium that a house may command in the market based on its location.  Houses built on two similarly located plots in the same Sector allotted under BHS-09 and XT/01/08 will command same location premium.  But the allottee who gets a built up house under BHS-09 is required pay an additional up to Rs.2,60,700/- due to "Location Charge" on the cost of construction as above.  Neither will the builder hired by GNIDA charge extra for houses at certain locations nor will GNIDA spend anything extra for such houses.  Then why should GNIDA charge location charges on cost of construction at the expense of an allottee of BHS-09 Scheme?

  

5.      Excessive Profit

 

5.1.    Total Cost of each Built-up House in BHS-09

 

5.1.1.    It was reported in the Times of India dated 9th April 2008 that the Board of Greater Noida Industrial Development Authority (GNIDA) hiked the land rates from Rs.5,900/- per sq m to Rs.10,500/- per sq m in the evening of 8th April 2008.  As the BHS-09 scheme opened before that i.e. on 16th February 2008, this establishes the fact that Land Price applicable for BHS-09 is Rs.5,900/- per square meter.  Hence for all purposes, the cost of 120 square meters of land for building a house under BHS-09 Scheme is Rs.7,08,000/-.

 

5.1.2.    A tender notification no. GM/Project/A-4/08/1850 was released by GNIDA on 30th October 2008 in the New Delhi Edition of Times of India.  Through this tender, GNIDA invited bids for construction of 2375 houses in Xu-II and Xu-III at a total estimated cost of Rs.3,26,59,91,000/-.  Thereafter another Tender No. O.S.D./Projects/09/53 dated 28th January 2009 was released for construction of  625 houses in Sector 03.  These Tenders establish the fact that GNIDA estimated the average construction cost of one house at Rs.13,75,153.87.   The tender documents further establish that this amount is payable in phases linked to construction at site. 

 

5.1.3.    Para 5.1.1 & 5.1.2 above prove that for each house under BHS-09, the total cost of land and construction, as per GNIDA, should be Rs.20,83,153.87, all inclusive, at the end of three years.

  

                5.2   GNIDA: Profiteering even in the times of Recession

 

5.2.1.      The profits GNIDA will earn are indicated in the below chart:

 

Premium

Location

Percentage

Location

Charges

Cost + Location

Average

Interest

Total

Premium

Cost to

GNIDA

Profit to

GNIDA

Profit

Percentage

29,98,000

0

0

29,98,000

6,00,000

35,98,000

2,083,153.87

1,514,846.13

72.72

29,98,000

5

1,49,900

31,47,900

6,00,000

37,47,900

2,083,153.87

1,664,746.13

79.91

29,98,000

10

2,99,800

32,97,800

6,00,000

38,97,800

2,083,153.87

1,814,646.13

87.11

29,98,000

15

4,49,700

34,47,700

6,00,000

40,47,700

2,083,153.87

1,964,546.13

94.31

 

 

The profits charged by GNIDA from a middle class common man ranges from 73% to 94%.  This does not includes the income through sale of Brochures (Rs.1,100/- each), Interests on Registration Money, Allotment Money and First Installment (No expenses incurred till date), profit on cost of land (purchase price from Rs.300/- to Rs.850/- and sale price Rs.5,900/- per sq meter), lease rent of 10% of Total Premium, Lease Deed Charges, Conversion Charges from lease hold to free hold etc. etc.  The list goes on and on…

 6.      “As is where is basis??”

GNIDA will be awarding tenders for construction of houses under BHS-09 to private builders.  It will be paying the cost of construction and charging the same from allottees.  Its engineers and staff will be ensuring that the builders adhere to quality, quantity, completeness, timelines etc., and for this they will get salaries from GNIDA.  If everybody does its due diligence, the houses should be in great shape at the time of handover to the allottees.  Then why should the “Purchaser” accept the house in “As is where is basis” as per Para C, Section III, Page 8 of the brochure?

 7.      GNIDA providing Major Concessions to Private Builders.  

As per the reports by the Media and feedback received from Greater Noida sources, major concessions have been provided to Consortiums and Groups of Private Builders.  The builders who have been selling two bedroom flats for 40 – 45 lakhs are now offering such flats from Rs. 21 lakh onwards. 

8.      Non-implementation of Reliefs as offered by Uttar Pradesh State Government: 

In view of the ongoing Recession, the kind and considerate Mayawati Government has announced various Reliefs to allottees under various schemes.  It has been reported in Media that Reliefs have been provided to allottees in NOIDA, an organization being headed by same Mr. Lalit Srivastava, who is also the CEO of GNIDA.  It has also been reported that the UP “Awas Vibhag” has put restrictions on State Development Authorities thereby restricting application of Location Charges only to the “Corner” Plots to the extent of 10%.  No Location Charges should be applied to Plots facing Roads or Green Areas.  Similar relaxations are being announced by almost all State and Central Government Bodies.  Yet no such relief or concessions have been provided to the Allotees of BHS09 Scheme.