Cost hits housing under JNNURM ::Business Line

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With time running out for the scheme to provide housing for the urban poor, just a third of the projects are done.

Builders implementing the JNNURM scheme for low-cost housing say escalation in construction cost has made the project unviable.

The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) scheme was started with a view to provide low-cost houses for the urban homeless.

“When we were awarded the contract in 2007-08, there was no escalation clause. The cost of construction has risen from Rs 450 per square foot to Rs 700 square foot. In this situation, it is difficult to expedite the contract, and this is a putting a huge financial burden on us,” Mr Ankur Pandhe, Managing Director, Padhe Infracon, who is implementing some of the projects in Maharashtra, said. He said JNNURM is coming to an end by March 31, and in most places, contractors were leaving the projects half-built.

FUND ALLOCATION

According to a delivery monitoring unit report released by Ministry of Housing and Urban poverty alleviation, Rs 39,650 crore has been sanctioned for construction of 15.75 lakh houses, to elevate the condition of 63 lakh poor people.

The report notes that even though 92 per cent of the project timeline is completed, only 50 per cent of the fund has been disbursed, resulting in completion of just 31 per cent of the sanctioned houses.

Sources said that contractors have been demanding that the civic body pay them the difference in costs of materials, including sand, steel and cement. “The cost of steel has grown, and labour prices have gone up by almost 100 per cent. Also, in many places, land issues have been plaguing the work.”.

Meanwhile, the Builders Association of India has said state-level project sanctioning committees have depended on old manuals and codes to design housing projects. Inputs such as energy-saving structures, and cost-effective materials weren't made a part of the design.

They also allege that distribution of funds was skewed in favour of larger states of India.

“States like Goa, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura were ignored by the Planning Commission. The mission didn't have any performance-based incentives for states. Furthermore, States have raised the issue of the Centre not distributing adequate funds”.