Realty firms may get Rs12,000 crore push

Published: August 11, 2009

New Delhi: Real estate firms and construction companies will see an increase in business with the country’s home ministry looking to build—at a cost of Rs12,000 crore—100,000 houses for people who serve in paramilitary forces such as the Central Reserve Police Force (CRPF) and Border Security Force.

These houses will be built over the next four years.

The home ministry wants to involve private real estate and construction firms in the project in an attempt to speed things up. This will be the first time the private sector builds such residential complexes for the paramilitary. It is usually the Central Public Works Department, the government’s construction arm, that builds residential apartments for the paramilitary forces.

“As of now only around 15% of the paramilitary forces have accommodation. We plan to raise that to around 25% in the next four years and for that we need to build 100,000 housing units,” said a home ministry official dealing with the matter, who did not want to be identified.

The selected firm could be paid an annuity over a specific number of years to make the project attractive, added this person.

This will reduce the risk involved in the project and guarantee the builder a fixed payment every year. It is also likely to expedite the construction process.

DLF Group executive director Rajiv Talwar said the government could consider several other options to make the project viable. “The government could offer a part of the floor area ratio (FAR) to the developer to help recover cost or it will have to look at some other option which makes the project viable.”

Talwar also said that it would be better if the ministry were to call representatives of the real estate sector for discussions before announcing these projects.

FAR, also called floor space index, is a metric that defines the size of buildings that can be developed on a plot of a certain size.

Omaxe Ltd’s chairman and managing director Rohtas Goel said his company would be interested in these projects if it was meant for developers—who would develop the entire project and take care of all issues, including financing—and not contractors, who typically implement a building contract for a fee.

The government wants to move swiftly to address the severe shortage in housing for paramilitary personnel.

According to the home ministry, currently only one in seven personnel posted with the Central paramilitary forces has official family accommodation.

And less than one-third of the policemen in the police forces of the various states stay in accommodation provided by the government.

At a time when the state police forces and the paramilitary are countering threats from insurgents in many parts of the country, a shortage of accommodation could cause unrest among the personnel, say analysts, as it already has in some cases.

Of the 770,000 personnel in the paramilitary, only 110,000 have government-provided accommodation. And of the 1.5 million personnel in the police departments of states, only 400,000 have government-provided accommodation.

Top officials in the home ministry and the paramilitary say that there is a constant demand from the men for official accommodation, which they are unable to meet. “The army gets the best of facilities. But today the war against insurgency is being fought by the paramilitary, who are getting stepmotherly treatment,” said an officer with the paramilitary, who spoke on condition of anonymity.

In the past two years, CRPF has lost 200 personnel in various skirmishes with insurgents and nearly 2,000 have been injured.

Former CRPF chief J.K. Sinha said the morale of the men had taken a beating as they were forced to live in huts and camps in areas where they were often under attack from extremists.

“It is very difficult to keep up the motivation among the men when they feel insecure about where they live. This insecurity also leads to depression, suicide and other problems,” Sinha added.

Source: Live Mint

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