After DLF, CCI Likely to Probe Unitech, Parsvnath & Omaxe

Unitech, Parsvnath Developers and Omaxe are likely to face the Director General (DG) investigation in the next one week. The Competition Commission of India (CCI) is likely to order probe on Unitech, Parsvnath and Omaxe based on preliminary investigations which suggest abuse of dominant power by the developers. Several complaints from residents on late delivery of projects and non compliance of agreement by the developers prompted CCI to order the probe, reports ET Now. 

“We have received some complaints from the residents, but these are mainly for delay of the projects and are not the kinds that come under the CCI purview,” said Rohtas Goel, CMD Omaxe. Earlier, CCI had imposed a hefty penalty of Rs 630 crore on DLF Ltd for abusing its dominant market position on a complaint by ‘The Belaire’ association in Gurgaon. The Competition Commission of India (CCI) on Tuesday said the Centre as well as state governments should come out with regulatory frameworks for the realty sector to protect consumers from unfair trade practices.

Slump Delays Projects of Several Developers in NCR including DLF, Unitech

Most of the projects launched in the National Capital Region (NCR) between 2005 and 2007 are yet to be completed. These include DLF’s Magnolias and Belaire in Gurgaon, Parsvnath’s Exotica in Gurgaon and Palacia and Privilege at Greater Noida. Unitech has also seen construction delays in two of its projects — Escape and The Close — in Gurgaon. “We are trying to complete the two by the end of this year,” a DLF spokesperson said on the company’s delayed projects.

A Parsvnath official said the company is targeting completion of its two Greater Noida projects by end-2012. “In case of Exotica project in Gurgaon, even though there were delays, we have completed possessions in the first two phases. We are currently offering possession in the third phase. And in six months, we will start providing possessions in the fourth phase,” he told DNA. A Unitech spokesperson said the company has already offered The Close (North) for possession. “Of the total 16 Towers, 14 towers have been offered. Also, more than 500 families have occupied their apartments and many others, who have taken possession, will move in soon. The remaining towers will be offered for possession in the next few months. Similarly, for The Escape as well, possession has already started and is happening in a phased manner.”

Developers blame the delay on the 2008-09 slowdown, among other factors. “During the slowdown, all the projects were impacted. Other factors such as lack of construction workers due to Commonwealth Games last year and the National Rural Employment Guarantee Scheme have also contributed to the delays,” said the DLF spokesperson. The Parsvnath official dittoed: “Almost two years were lost to the recession. Customers defaulted and even the banks that had committed us funds also took a backseat. We were pitted against odds.” The lessons seem to have been learnt well.

DLF has put in place a system of pre-launch checks and balances. “As a policy, we have decided that launches will be done only after all the required approvals from the concerned agency have been taken,” the spokesperson said. Parsvnath has started taking dedicated loans for projects. Unitech, on its part, has jacked up manpower for speedy implementation. “Unitech has ramped up the construction activity significantly during the last 24 months. Workforce deployed at sites increased nearly six-fold from 3,500 to about 20,000-plus,” its spokesperson said. But just as the going appeared to be getting better comes the likelihood of another slowdown, what with interest rates and input costs shooting through the roof.