GRAP 4 curbs in Delhi-NCR: Realtors say temporary halt to construction work factored in their contingency plans

The Delhi government’s Stage 4 of the Graded Response Action Plan (GRAP) came into effect from 8 am on November 18. The CAQM issued the order due to the deteriorating air quality in Delhi.

“Ban C&D activities, as in the GRAP Stage-III, also for linear public projects such as highways, roads, flyovers, over bridges, power transmission, pipelines, tele-communication etc,” the CAQM order said.

Also Read: GRAP 3 curbs in Delhi-NCR amid ‘severe’ AQI may delay real estate projects: Credai and Naredco

Developers said that the real estate community will cooperate with the government agencies in adhering to the GRAP 4 guidelines concerning construction activities.

“This is a temporary phase and the developer community is prepared to meet the challenges. This occurs every year and developers have now started including this phase, when there is a momentary halt to construction work, as part of their contingency plans. I don’t see any major impact on the real estate sector and I hope the situation will not last beyond a month,” Pradeep Kumar Aggarwal, founder and chairman, Signatureglobal (India) Limited told HT.com

Will the ban have a significant impact on the Delhi-NCR real estate market?

The temporary stoppage in construction activity in Delhi-NCR may not have a significant effect on the real estate market as the region contributes about one-fifth of the supply compared to MMR, said MD Liases Foras Pankaj Kapoor.

Having said that, there may be an impact on employment as significant amount of labour is employed in construction activity, he added.

Delhi has become the de facto ‘poster boy’ of urban pollution in the country. It would be logical to assume that severe air pollution impacts a region’s overall property market. “However, this is not really the case. Pollution spiking in Delhi-NCR happens largely during the onset of winter, which coincides with agricultural stubble burning in nearby states. A perennial ‘high alert’ throughout the year would have more serious implications on real estate, but it is a seasonal phenomenon. With periods of respite, cities are quite adaptable,” said Prashant Thakur, director and head – research, ANAROCK Group.

“It’s also true that pollution has the unfortunate tendency of becoming an accepted feature for urban dwellers. Real estate prices in most Indian cities are not dictated by environmental factors as much as by affordability and their ability to provide employment,” he added.

Halt in construction activity impacts project timelines and developers’ obligations to financial institutions: CREDAI

“Pollution control is essential, and CREDAI extends its support to the CAQM mandate. However, it should also be understood that real estate projects already adhere to stringent pollution control standards as required by RERA. The real estate sector, being one of the nation’s largest employers of unskilled labour, also suffers financially, and therefore, such activities that do not increase dust levels, NGT can consider them to keep outside the ambit of GRAP,” said Manoj Gaur, president, CREDAI-NCR.

It should also be understood that each halt impacts project timelines, budgets, and developer obligations to financial institutions, he said.

One of RERA’s stringent conditions includes timely delivery of projects, and in case of any delay, a developer has to pay a late delivery penalty, which raises the cost of the project. With a large number of units currently under construction and customers eagerly waiting for their homes, exempting RERA-approved projects, especially those nearing their completion, from GRAP could balance public health needs with economic stability by sustaining essential development work, he added.

Amit Modi, director, County Group said that concrete steps should be taken to reduce the high levels of pollution, and developers for the time being should restrict themselves to non-polluting activities on-site, such as carpentry and plumbing fittings, wooden flooring, aluminum and glass fittings, internal wiring, sanitary fittings and other non-polluting interior work and external work like horticulture, to make sure that while on one hand work and delivery timelines promised to homebuyers are not hindered and at the same time there is no adverse impact on the environment.