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Bad ads under SCanner
More stringent actions needed to segregate black sheep, experts tell Maneesh Chhibber
The recent notice issued by the Supreme Court on a public interest litigation (PIL) seeking stringent guidelines for advertisements issued by real estate developers and builders so as to check cheating of gullible persons has cheered the real estate experts and lawyers in the region. They feel it is high time such steps are taken to deter builders and developers from taking people for a ride by promising them the proverbial moon without actually providing anything concrete. They also feel that proper monitoring of advertisements issued in the media by the builders and strict action against those who try to lure customers by making false promises will go a long way in curbing the nefarious designs of cheats and fraudsters, who comprise a small, but influential minority, among the builders and real estate developers. It may be recalled that earlier this week, a three-Judge Bench, comprising Chief Justice K.G. Balakrishnan, Justice P.K. Balasubramanyan and Justice R.V. Raveendran, had issued a notice on the PIL filed by an NGO, Sanrakshak — the Protector — which has alleged that innumerable persons across the country are being duped by misleading advertisements in the print and electronic media by builders, who vouch that their projects have been approved, even though that is not the case. In many cases, including Punjab, the government woke up following the publication of misleading advertisements and issued statements clarifying the status. However, such illustrations have been too few and far between. Even the petitioner in the PIL has pointed to this fact, questioning whether the builders, developers and land mafia of the country can be given blanket permission to cheat the general public, by misrepresentation and forgery of hard-earned money in the name of residential schemes, like pre-launch, advance booking of residential plots, flats, apartments, housing society membership, by such misleading advertisements. Architect P.K. Garg, who himself has designed many
housing and shopping centres in the region, says: “Even though instances of gullible persons being taken for a ride through wrong or misleading advertisements in the region have been few, yet it will be a welcome step if some mechanism is put in place to check such acts. This is because even a stray incident can leave a long-lasting impression.” Punjab and Haryana High Court advocate Raman Walia, who is a standing counsel of many leading infrastructure companies, concurs: “Misleading advertisements are generally issued by fly-by-night operators out to make a quick buck. Look at Mohali and most of Punjab. I am not sure if all mega housing and commercial projects approved by the previous government will stand the scrutiny of the law. While all of them stand approved, the question is did the government verify the antecedents of those backing the projects and check if they had actually bought the necessary land needed for the project? I have my doubts.” Another leading real estate expert, who did not wish to be quoted, also favoured setting up of a monitoring agency by the government to verify the claims being made in such advertisements. “Such an agency could charge fee from the builders and colonisers to cross-check claims and then, if satisfied, issue a certificate approving those,” he adds. Advocate Mohan Jain, former advocate-general, Haryana, too, feels that government laxity is actually abetting illegal acts of unscrupulous elements. “Tell me, how many builders have been booked or permissions withdrawn for misleading the government? I don’t think any. Since the stakes are very high, everybody, including the officers responsible for regulating everything, stand to gain by not doing anything. Moreover, where are the laws that can act upon such acts swiftly?” he asks. But, government officers wash their hands off the issue. A senior officer, who was till recently involved in the process of sanctioning mega projects in Punjab, rues the lack of support staff and infrastructure to deal with issues such as misleading advertisements. “We are not investigators, neither do we have the resources. We only go by what is submitted in writing. While I agree that there needs to be some kind of check done before projects are cleared, I am not certain if this is viable under the present conditions,” he asserts. He, however, hastens to add that if the apex court gives any direction or frames a set of guidelines, then it would be impossible for the government to ignore the same and it would have to act, even if it means spending money.
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Backgrounder
Taking cognizance of misleading advertisements being given by builders, developers and even land mafia on the real estate development, the Supreme Court, earlier this week, had issued notices to the Centre and all states for laying down national guidelines on regulated ads.
The notices were also issued to six state government development authorities, including Punjab Urban Planning and Development Authority, Haryana Urban Development Authority, the administration of Chandigarh and five other union territories, the Press Council of India and six private builder companies.
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Star-spangled realty
Celebrities of all shades are endorsing real estate projects, says
Stars are descending on the real estate sector, literally. This is the least that can be said going by the flurry of real estate endorsements by the celebrities.
One-time inaugural appearances, project specific emergence to full project endorsements — all have become the order of the day. To take a head start over competitors, real estate firms have been aggressive in advertising. According to a newsletter from AdEx India, a division of TAM Media Research, there has been a rise of 65 per cent in print ad volumes of real estate sector in 2006 over the previous year. Interestingly, most of the advertising by realty firms were seen in north zone publications. “Five celebrities (two film actors, one film actress and two TV actresses) were used by the real estate advertisers for endorsement on TV in 2006. Shahrukh Khan (endorsing DLF Group) had the maximum 35 per cent advertising share followed by Amitabh Bachchan and Aishwarya Rai (endorsing Aamby Valley City) with 23 per cent and 21 per cent share, respectively,” to quote the findings. Celebrity signatures have been the key ad mantra for many. Such endorsements are not without the bouquet of non-tangible benefits. Besides, being attention grabber, the promos ensure
credibility and send a strong message of persuasion. A few like Navdeep Malhotra, the maker of A Different Sunday, an art documentary, aver that it may also imply that product (read project) sales are plummeting and star power is being used to pep up the value. “If stars can lend fizz to aerated drinks and other consumer goods, then why not real estate? Housing projects are merchandise too and need a selling impetus. However, it also lends a peep into how tough the competition is in the sector and on the chances of sales sagging or plateauing in near future,” he says. According to Omaxe vice-president Amitabh Bhattacharya corporate brand endorsement, product or project endorsement or event endorsement breaks the monotony and sameness of claims in a cluttered advertising environment. “It creates a stopper value,” he says and adds that compared to FMCG or any other category, star endorsement in the real estate sector is much less. “If the personality of celebrity and the positioning of the brand or real estate project blend well then, it creates a trigger point and augers sales,” he says. The hi-end luxury apartment and penthouses in The Forest by Omaxe has Ustad Amjad Ali Khan with his two sons Aman and Ayan, as brand envoys. A word of caution here is, that star should not overdrive the product, he warns. Saurabh Kapoor of LVL City, a company that has Yuvraj Singh and Preeti Jhingiani as its brand ambassadors says a brand ambassador adds to the recall value of any product. “There should be synergy between the brand and its ambassador, so that people can relate the two. It adds to brand recall value. Product sells at its own strengths. Real estate firms form a long-lasting relationship with investors, a relation, which lasts much longer than buying a product like soap or a shampoo.” Sometimes, advertisement against a projected image sets many a tongues wagging. Just recently, Remo signed up for Pune-based Mont Vert Tropez. According to many, Remo’s endorsement allegedly struck a discordant note with the Goans as the singer had been on the forefront of a battle to save Goa from real estate giants.
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Yamunanagar, Jagadhri to merge
Ball has been set into motion to make Yamunanagar, the second largest urban centre in Haryana after Faridabad, a mega city with wider roads, green belts, golf course, recreational sectors and other infrastructure in the offing. Plan 2021 means weaving the twin towns, Yamunanagar and Jagadhri into a single entity, and develop them as an important tourism node and industrial hub of the state. Yamunanagar (known as Abdullapur till 1947) and Jagadhri (earlier known as Gangadhri) grew into urban centres with haphazard growth. Today vacant spaces between the two towns have vanished and there is slum like situation in several parts of the Jagadhri workshop area. Officials admit that ‘planning intervention has almost become impossible’ in several parts. The proposed mega Yamunanagar-Jagadhri project has been planned for a projected population of 11.50 lakh in 2021 from the present 3 lakh. The Haryana Urban Development Authority (HUDA) would carve out 39 sectors over 7,039 hectares. As per the revised plan, an area of 3,343
hectares will be developed for residential sectors with a density of 250 persons per hectare (to accommodate 2021 population). Sectors 2, 2A, 2B, 4, 5, 10, 12 (part), 12A, 13 (part), 14, 15, 16, 16A, 17, 17A, 18, 18A, 20 (part), 21, 22 (part), 23, 24, 25, 26, 27, 28, 28A, 29, 33, 34, 35A and 39 will be the residential areas in new Yamunanagar -Jagadhri. HUDA proposes to float nearly 2,500 residential plots in Sector 15 and 17A in the second half of 2007. It was in different stages of acquiring land for Sectors 13, 22, 23 and 24. District town planner R.K Singh informs that 323 hectares has been allotted for commercial use in Sectors 3 (part), 9, 18 (part), 19 and 24A. As much as 150 meters wide commercial road is proposed along dividing road of Sectors 12, 13 and 20 to exploit the potential of these roads, which would be the major roads of the towns, Singh says. “This commercial belt will compensate for commercial area lost out on account of conversion of Sector 12A to residential (as per the revised draft plan) area,” says Singh and adds that green belts have been proposed on either side of this avenue. Sectors 1, 3 (part), 6, 7, 30, 30A, 31 and 32 has been earmarked for industrial use, besides the industrial estate of Haryana State Industrial Development Corporation (HSIDC) at Manakpur. The government proposes to set up an industrial model town in Jagadhri. It has been admitted on a government paper that the present urban road system of this urban agglomeration is erratic causing bottlenecks prone to accidents. The new plan has taken care of this, claims Singh. A ‘ring road’ or peripheral road 75 meter wide (V-1) with 50 meters green belt on either side will be built, which would skirt the entire proposed mega town. It will take off from Yamunanagar - Saharanpur road (NH - 73) just before Kalanaur. The traffic originating from various parts of the city having destination outside it and the traffic to bypass the city would be diverted on this ring road. The existing roads have been retained and sector roads would be wide enough. Several over bridges and bridges have been proposed. There would be a transport nagar and transport depot in sectors 8 and 35. A total of 518 hectares of land has been proposed for transport and communication purpose in sectors 8, 10 (part), 11 (part), 35 and area under the proposed peripheral road. Open spaces over 930 hectare would be the hallmark of this proposed urban centre. HUDA has planned to exploit canal front of Western Yamuna Canal (WYC) passing by the eastern side of Jagadhri town. Sectors 37 and 38 have been reserved exclusively for recreational use on either side of Jagadhri — Saharanpur road (old) along WYC. “The idea is to develop the area in a tourist hub”, says Singh. Golf course, water sports, writers’ retreat and other similar things could come up in this recreational pocket. Planned development of the area started in early seventies in form of improvement trust and housing board colonies. Draft plan for controlled areas around Yamunanagar and Jagadhri was published in January 2005. As per a source in the Haryana government the Dadupur -Nalvi canal (under construction), which would pass through the proposed sectors, was missing in the draft plan of 2005.
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Outlet drain missing from PUDA Urban Estate
Dharmendra Joshi writes from Kapurthala
The Punjab Urban Development Authority (PUDA) has failed to provide any outlet drain for sewerage in the local urban estate where as many 717 residential plots had been allotted after a draw by PUDA in first phase of allotment in 1999. Subsequently several other plots were allotted but PUDA could not provide any outlet drain for sewerage. President of Urban Estate Welfare Society RS Dhillon said that presently over 700 persons are living in urban estate after constructing houses on about 100 plots allotted by PUDA and construction is on, on the other 100. The residents had to suffer a lot in the absence of any sewerage outlet drain, Dhillon said, adding, that they had to arrange pump sets to dispose of the sewer water into vacant plots several times. Dhillon expressed fear that any water borne disease may spread due to disposing of sewerage water in the vacant plots in the absence of any other alternate arrangement. Further, there was no proper entry road to the locality, which causes further inconvenience to the residents, he added. The president of the Urban Estate Welfare Society further said that contrary to the plan of providing 120 feet wide two-lane roads, PUDA authorities could not provide proper entry road to the locality. A number of trees on the proposed road are causing difficulty for the residents from the GT road side, he added. When contacted PUDA estate officer Harbir Singh said that the work for outlet drain for sewerage was already going on. The same would be completed soon, he said. The estate officer said PUDA is seized of the matter and that the chief administrator had visited the site to oversee the ongoing work. On providing proper entry roads, the estate officer said the department had already written to the Forest Department to seek permission to cut the trees under Section 4 of the Forest Act. He said the road would be widened as soon as the permission was provided.
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Unitech, Appu Ghar promoters join hands
The joint venture company to be called International Recreation Parks Pvt Ltd (IRPPL), has tied up with global media conglomerate Turner Inc’s children entertainment channels Cartoon Network and Pogo to provide a specific themes to the amusement parks. “We would invest Rs 1,200 crore on the Noida project and around Rs 400 crore on the Rohini project to build state-of the art amusement parks in Delhi and its neighbourhood. We are running the Rohini park on a trial basis while the Noida project is expected to be operational by mid of this year,” IRPPL Managing Director Rakesh Babbar told PTI. He said the park would feature over 30 different rides and attractions, which will be supplied by leading European manufacturers including Zamperla of Italy who also supply rides to Disney, Universal Studios and Six Flags. “The projects would be funded through a mix of resources including debt, equity and internal accruals,” Babbar said. Noida park, which would have a built area of 150 acres, would be divided into two zones — amusement park and commercial — with 85 per cent of the site dedicated to the amusement park and the remaining 15 per cent for commercial purposes. The first phase of operations in Noida, expected to be complete at an investment of Rs 600 crore in July, would include a Teen Zone and a lifestyle centre. The second phase will include the opening of rest of the amusement park and a premium brand retail section- Garden’s Galleria.
— PTI
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TAX tips by S.C. Vasudeva Q. I own land of about 2,000 square yards. There is built up area of about 2,000 sq. ft. I have sold the said property for a consolidated price and a claim for the long-term capital gain was made in the return. The assessing officer has not accepted my claim and treated the same as short-term capital gain. I may add that before the registration of the property in favour of the buyer, the building was demolished as the buyer was interested to buy the land only. Is the action of the assessing officer correct? — R.K. Kochar, Patiala A. I hope you have taken steps to file the appeal before the CIT(A). The action of the assessing officer is not correct as the sale is basically of the land as the building had been demolished by you. The gain arising on sale has to be treated as a long-term one. The Madras High Court in the case of CIT vs. Union Co. (Motors) Ltd. (283 ITR 445) has held that the land not being a depreciable asset, the provisions of Section 50 are not attracted in a case where the sale consideration paid by the buyer is only for land since the building had no value and got demolished, the gain arising on such a sale would be a long-term capital gain. Partners no more Q. We are a partnership firm having a factory in which we manufacture hand tools. There are four partners in the firm. Three of the partners want to split. The business of the partnership on going concern basis, along with all assets and liabilities, will be taken over by the remaining partner. A tentative oral agreement has been entered into by the parties. We, therefore, requested our income-tax consultant to prepare a draft for such a takeover. We were advised that this would involve capital gain tax liability. Please let us know if the contention of the tax adviser is correct? —
Raghubir Singh, Jalandhar A. Section 45(4) of the IT Act, 1961 (The Act), provides that profits and gains arising from transfer of capital assets by way of distribution of capital assets on dissolution of firm would be chargeable to tax as income of the firm. Prior to the amendment of the Act in 1988, Section 47 of the Act contained a clause, which excluded distribution of capital assets on dissolution of firm from the term ‘transfer’. With the deletion of the said clause wef April 1, 1989, the taking over of the assets and liabilities of the firm, including the capital assets by one of the partners, would be covered within the provision of Section 45(4) of the Act. Accordingly, the firm would be liable to pay tax in accordance with the provisions of the said section. I may add that there are a few decisions, which are against the aforesaid preposition but in my opinion the correct view seems to be that which has been explained hereinabove. I therefore concur with the view of the tax consultant.
Officer’s action Q. I am carrying on the business of the civil contractor and taking up petty jobs of civil construction as and when advertised by the corporation. I was awarded a contract for construction of bathrooms in a park managed by the municipal corporation. In terms of the agreement, 10 per cent of the contract price was retained by the corporation to be refunded after the completion of the satisfactory performance period of six months. The assessing officer has added the above 10 per cent to my income despite of my pleadings that I have not received the amount so far. Is the action of the assessing officer correct? — A.K. Singh, Gurdaspur A. The action as taken by the assessing officer in my opinion is not correct. It is a settled principle of law that if the amount has been retained in terms of the retention clause in the contract out of the bills raised by the contractor after the completion of the work, such retention money does not accrue to the contractor in the relevant assessment year. This is the position even if the assessee is following mercantile system of accounting. You may refer the decision of Calcutta High Court in the case CIT v. Simplex Concrete Piles (India) P. Ltd. 179 ITR 8 (Cal) to the appellate authority in this regard.
Land and building Q. I am one of the partners of the firm owning a cold storage plant. I have received a notice under the wealth tax provisions for filing the wealth tax return? How should I compute value of my interest in the firm, which owns such cold storage plant? — K.S. Johar, Ambala A. In my opinion the value of your interest in the firm, which owns the cold storage, should be determined by applying land and building method and that of the plant and machinery on market value basis. It will be better to get the valuations done from an approved valuer and the valuation report should be filed along with the return of wealth.
Business income Q. I have constructed a hotel having 30 rooms and entered into an agreement with a person to manage and run the business of hotel made under a fixed term agreement. After the expiry of the term, the vacant possession of building would be handed over to me. Will the income, which would be fixed sum per month, be assessable as a rental income or as income from business? — Upkar Singh, Moga A. The assessability of the fixed sum received by you would depend upon the terms of the agreement. If the agreement provides for the payment of fixed sum by the lessee, which is a composite sum for the lease of hotel building along with all the other assets such as furniture and fittings, air conditioning plant etc. and is intended for exploitation of business assets, the sum so received should be taxable as a business income. In my opinion, it cannot be held to be covered by the income from house property.
The writer can be contacted at sc@scvasudeva.com
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Buzz on Bourses Mumbai: Indiabulls Real Estate Limited (IBREL), the real estate arm of Indiabulls Group, was listed at Rs 380.05 on the Bombay Stock Exchange. IBREL, which recently demerged from Indiabulls Financial Services Limited (IBFSL), hit highs of Rs 414.80 per share in early trade and over 12.97 lakh shares were traded on the BSE. The face value of the stock is Rs 2 each. Pursuant to the scheme of arrangement, between Indiabulls Financial Services Limited (IBFSL), Indiabulls Real Estate Limited (IBREL) and their respective shareholders and creditors, the real estate undertakings of IBFSL got demerged. — PTI Gold Souk to build malls
New Delhi: Real estate firm Aerens Gold Souk has said it will develop 100 large format multi-speciality malls across the country. The company would set up 100 such malls in Tier I, II and III cities having a population of at least 4 to 5 lakh, Aerens Gold Souk Group said in a press note. The average size of the large format multi-specialty mall — The Souk — would be around million square feet. The company is presently developing five such large format malls in Ludhiana, Jaipur, Kochi, Amritsar and Chennai, it said.
— PTI
GMR Group headhunts
Singapore: Real estate giant GMR Group, leading the consortia tasked with building and running new airports in New Delhi and Hyderabad, has appointed a Singapore recruitment agency to headhunt top managers for airport operations. GMR has hired the firm to fill 15 key positions with persons who have seven to 20 years of work experience in airport management, operations and ground handling, according to a report by the Straits Times.
— UNI
Social housing project
New Delhi: Bahrain’s Crown Prince Shaikh Salman bin Hamad Al Khalifa has promised his country would open social housing for expatriates to improve their living conditions, Minister for Overseas Indian Affairs Vayalar Ravi said. Ravi, who had a 40-minute discussion with the visiting crown prince, said Shaikh Salman was “extremely keen to better his country’s ties with India”. “The crown prince said the Bahrain government was formulating a social housing project for the expatriates there. It would provide better housing and living conditions for the workers and ease out problems,” Ravi said.
— IANS
OCL approves spin-off
Mumbai: Cement maker OCL India Ltd said its board had approved the spin off of its steel and real estate business. It said investors would get three shares with a face value of one rupee each in the steel business and a like number of shares in the real estate business for every share held in OCL.
— Reuters
Parsvnath in Dharuhera
Mumbai: Parsvnath Developers Ltd has announced the launch of a high-end residential township, Parsvnath City, at Dharuhera in Haryana. The magnificent township, built at an approximate cost of Rs 450 crore, is located at Dharuhera Sector-1 & 1A. Close to National Highway 8, it is strategically situated just 25 km from Delhi border. It would have a health club and swimming pool, exclusively for residents.
— UNI
Emami to float subsidiary
Kolkata: FMCG company Emami Limited has decided to float a wholly-owned subsidiary to make a foray into the real estate sector. A company official said that Emami had identified realty as a major opportunity, which would also help in mitigating the risks of the FMCG business. Sources said with liquidity in excess of Rs 100 crore, the company was well poised to enter the sector. The subsidiary would be formed by the end of March or April, the official, said adding it would take up select projects where the returns were high and quick.
— PTI
New machines from JCB
Chennai: JCB India, a construction and equipment company, will be rolling out three ranges of construction equipment this year, a top company official said. The company would be rolling out the 14 tonne ‘excavator range’ machine in April, compaction equipment in the second quarter and is conducting feasibility study on the ‘Telehandler range’, company managing director Vipin Sondhi, told reporters. JCB had invested around Rs 220 crore for setting up its plant in Pune over the last two years. “The facility is ramping up in terms of manufacturing equipment,” Sondhi said.
— PTI
Tantia projects for Bihar
Mumbai: Tantia Constructions has said it has multiple projects in Bihar and West Bengal for infrastructure totalling Rs 159.99 crore in the months of February and March. Tantia informed the BSE that it has secured a project entailing construction of major state highways in the districts of Buxar and Bhabua from the Central Public Works Department. Valued at Rs 113.18 crore the work has to be completed in 20 months.
— PTI
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A bouquet of advice on bricks
Jagvir Goyal suggests that water used during construction must be clean and free from dissolved chlorides or
sulphates.
In the last episode, the importance of buying the basic building material carefully was outlined and guidelines on cement and steel were given. Here are some guidelines about the other basic materials, like bricks, sand and coarse aggregate with a word on water, too. Bricks
Sound: While buying bricks, select such a lot that gives a ringing sound when two bricks are struck against each other. Such bricks are hard and free from cracks. Bricks produced from good earth will give such a ringing sound. Colour:
Colour of bricks should be deep red or cherry red. However it is not a sure indication of good strength of bricks. Sometimes, when the earth used for manufacture of bricks is largely sandy, a red colour is lent to the bricks which in actual may not be as strong as those made from the good clay. Size:
Check the size of bricks to be accurate as the bricks are sold by numbers. Exact size of a brick is 9” x 4 3/8” x 2 11/16”. A little lesser size may not only ask for more quantity of bricks but cause problems during masonry work too. Size of the frog, commonly called dabbi is 4”x 1 ½”x ¼”. Variation:
Another important point is to see that there are no variations in size of bricks. Such variations cause problems to the masons who find difficulty in maintaining the lines and levels in masonry work. Preferably get the bricks from one kiln only. Also avoid distorted bricks. Look for no broken edges. Water absorption:
You may check the water absorption of bricks by first weighing them and then immersing them in water for 24 hours. The weight of brick now should not be more than 1.7 times the original weight. More porous are the bricks, more water these will absorb. Prefer bricks with least porosity and water absorption. Free lime:
To avoid the problems at a later stage, also check that the bricks are efflorescence free. To perform this check, break a few bricks and check the broken faces. There shouldn’t appear any lumps of free lime. If ignored, these salts appear on wall surfaces at a later stage and become a permanent headache.
Sand
Coarseness: Quality of sand plays an important part in building construction. Better sand helps concrete attain better strength. For RCC work, always prefer coarse sand. Have a feel of the sand and you can judge the coarseness. Engineers check the quality of sand by checking the fineness modulus but that may not be practical for a common man. Clay lumps:
Another dangerous factor is the presence of clay lumps in sand. More is the clay or silt in sand, more unsuitable does it become for use. Clay and silt content in sand should not be more than 4 per cent. Checking the source of sand can control these factors. When getting the sand from the rivers, get it from near the inner edge of meander. Don’t be casual here but insist for clay and silt free coarse sand. Storage:
Proper storage of sand helps in preventing mixing of soil with sand. Develop a temporary platform of bricks at site and get the sand unloaded over it. Ask the workmen to keep the clay puddle for tile terracing away from sand storage. Leftover of concrete done during the day should not be thrown into the mound of sand.
Coarse Aggregate
Type: A common question asked by the readers is whether to prefer crusher or round aggregate for their building. Both types of coarse aggregate have their plus and minus points and a choice has to be made after the examination of each type of aggregate available in an area. Crushed stone:
Crushed stone, popularly called crusher, has the benefit of good grading. No oversize stones are there and no clay or fine particles are there. However it may contain flaky and elongated pieces, which are not suitable for RCC work. Also it requires more cement than round aggregate for a particular mix design. Ideal crusher should have 85-100 per cent of it passing through a 20 mm sieve, 5-25 per cent passing through a 10 mm sieve and 0-5 per cent passing through a 4.75 mm sieve. Round particles:
Also called waterborne aggregate, it suffers from the problems of gap grading and presence of fine particles and clay in it. Its site screening may result in heaps of large-sized stones, which are of no use. Its silt and clay content should be checked to be not more than 1 per cent. Its use provides better workability of concrete and less quantity of cement than that needed for crusher is required for a particular mix design. However, it has to be thoroughly washed before use to get rid of clay and silt present on the round stones. Size:
Prefer 20 mm down aggregate for columns, beams, lintels and slab or we can say that all RCC work should be with 20 mm down aggregate. For damp proof course, 10 mm down aggregate should be chosen.
Water
In addition to the basic material, pay attention to the water being used for construction work and don't be negligent towards quality. Water used must be clean, having no odour or taste, rather fit for drinking purpose. If the water contains dissolved chlorides or sulphates, it may cause great harm to the steel embedded in concrete as these salts are enemies of steel and corrode it quickly. Look for a good source of water. Generally a hand pump or tube well is installed at site before the construction begins. No harm in spending a few rupees on getting the sample of water tested and knowing its worthiness. Happy building!! The writer is Superintending Engineer (Civil), PSEB, and can be reached at www.jagvirgoyal.com
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Amritsar a hospitality sector favourite
Entrepreneurs await the new urban development policy, says
Ashok Sethi
After enjoying free run with large concessions and other benefits given by the previous Congress government to the mega mall projects in the state, big entrepreneurs are awaiting the fresh urban development policy of the new state government. Maintaining stoic silence, some of the managements of a few major projects have stopped construction all together while others were continuing with the building activity at a slower pace. The message being sent across to different multinationals is that although the projects are going full steam ahead yet still they would await a concrete blueprint. The Holy City has been sanctioned 12 malls, multiplexes and commercial complexes with hotels primarily on the prestigious Mall Road, International Airport Road and the Batala Road. Some of the leading brands and food chains have taken up shops in these multiplexes at phenomenal rates but are expected to renegotiate in case of delay in the execution of the projects. Some of the leading hotel chains, including Raddison, Ramada In, JW Marriot, Country Inn and even famous Chatwals of New York fame are vying for a suitable tie-up with the local entrepreneurs. Representatives of various chains have already made numerous visits for the selection of appropriate sites. According to BBC reports, the City of Golden Temple has emerged the fifth most sought after destination across the globe. MP Navjot Singh Sidhu is projecting the Holy City as a hot destination for pilgrims. He has prepared a vision paper for the development of tourist infrastructure, including the upgradation of the Amritsar International Airport, four-laning of Jalandhar-Amritsar highways to be extended to Wagah joint check post. The top priority of the present new government is to make Amritsar a futuristic city to exploit rich heritage, he added. Sidhu said it is unfortunate that the previous government nullified the prestigious SEZ project thereby eroding the mandate of the Prime Minister who had announced the setting up this mega industrial project. More than two-dozen residential colonies, both approved by PUDA and the illegal ones, find no serious buyers. Property agents who had a thriving business during the last three years have been awaiting new customers. Talking to The Tribune, an aspiring businessman Vinod Malhotra said he found out that it was the agents and the developers who had combined to keep the prices high. He said the prices might drop due to consumer resistance. Citing another reason for fewer people going to newer colonies Malhotra said home loan rates have increased. According to a survey conducted by The Tribune team, roughly 10,000 plots have been carved out, which are finding just a handful of takers. Another factor, according to Y. Khanna, a property dealer, is the closure of financial year. Optimistic about fresh investment in the real estate sector Khanna says things may look up after the harvesting season.
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Price correction short-lived
S. Satyanarayanan says sagging rates may be confined to just a few overheated locations
However, industry analysts and real estate managers strongly feel that the correction in the real estate prices is likely to be short-lived and confined to some over-heated locations. Industry watchers feel that with strong economic growth constantly generating new buyers, the upward trend will resume over the next four to six months. “The spurt in real estate segment has more to do with the demand-supply gap and not much linked to hardening of interest rates as those who genuinely looking for commercial space or residential premises will not be bothered by the moderate increase in interest rates,” Assocham Secretary General D.S. Rawat told The Tribune. “The hardening of interest may deter those who already own a house and want to buy a new one from investment point of view as with comparatively high interest rates and low rentals, return will be a bad investment,” he said. In this context, he pointed out fall in real estate prices is short-term phenomenon and the market is expected to pick up once again after five to six months. The only difference would be, with inflow of a large number of FDI in this segment, any increase in the prices would commensurate with the quality of product. Meanwhile, the findings of a Ficci survey based on the feedback from a sample of 24 leading real estate consultancy firms, developers, construction companies, builders and financing institutions indicates that the residential sector is more speculator-driven as compared to the commercial sector, which is end-user driven. The Ficci survey reveals that Foreign Direct Investment (FDI) would technologically boost the industry and improve product quality implying an increase in property prices. Although a correction of up to 10-15 per cent in the property prices is deemed inevitable in some overheated locations of the market (where the demand is more than the supply) 67 per cent of respondents did not foresee a sudden collapse. This view disregards the climbing trend in property prices to be a bubble.
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Licensed to build
Permit for developers may be made mandatory in Hyderabad, says MCH has proposed a new licencing system aimed at making the builders accountable. Builders taking up high-rise projects, group houses, commercial complexes and apartments will have to get a licence from the MCH to execute the projects. As per the draft proposal, awaiting official notification, if the builders violate mandatory guidelines, their licence would be cancelled and they will be debarred from carrying out construction activity for five years. The need for a regulatory mechanism was felt in the backdrop of several big time builders as well as the smaller ones habitually deviating from building plans and failing to stick to provide mandatory facilities. Following strictures from courts in several cases of violation of building norms recently, the MCH had recently served notices to nearly a hundred builders for illegal constructions, setback deviations and failure to follow fire safety measures. In the process, at least another 300 builders of apartment complexes were untraceable. Under the new licence system, builders will have a pay a hefty amount as a security deposit to get themselves registered, which will be valid for five years and renewable. A system of grading of builders for the purpose of licensing is also under consideration. According to this proposal, builders will be categorised into two grades; those who take multi-storeyed complexes and others who construct buildings up to 15 metres. Builders will have to be income tax assesses in order to get the licence. Builders will be graded by a panel headed by the MCH commissioner, including chief city planner and chief engineer of MCH, representatives of director of town and country planning department. The proposal has elicited mixed reaction from the builder community. While S. Narasimha Reddy from Builders Association of India, AP Chapter, welcomed the move saying that if implemented properly, it would help in increasing accountability, CMD of Janapriya Group K. Ravinder Reddy expressed reservations over the system of grading to builders. “Since it is difficult for new builders to enter the market, it would lead to domination of a few players,” he said. According to the draft proposal, fresh builders will have to be engineering or architecture graduates to be eligible for registration with the MCH. Officials are also considering giving weightage to the past history of builders in issuing licences under the new system.
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Cautious on Construction
Equity fund managers trim exposure on sector stocks, says
Nishant Kumar
Indian equity fund managers continued to trim exposure to construction sector stocks in March, following the withdrawal of tax breaks in the federal Budget, a Reuters poll of 13 fund houses showed. The allocation by diversified equity funds to this sector dropped to an average 6.58 per cent of assets from 8.12 per cent a month ago, with three-fourth of the respondents planning to maintain or further cut their exposure within the next three months. This is in line with the findings of the Reuters poll in February, which indicated that more than 38 per cent of the respondents were planning to cut their exposure to the sector, that includes cement, infrastructure and real estate stocks. “It is because of the impact of taxation post-budget,” Mihir Vora, head of equities at HSBC Asset Management (India) Pvt. Ltd., told Reuters. “Construction companies will have to shell out higher tax in the future,” he said adding, it might impact their profitability in the next couple of quarters. The outlook for construction stocks turned weak after the 2007-08 budget proposed the withdrawal of income tax breaks on infrastructure construction contracts and refrained from extending some tax breaks to developers. Cement stocks also got battered after Finance Minister Palaniappan Chidamabaram raised excise duty on cement sold above Rs 190 per 50-kg bag and lowered the duty on cheaper cement, in a bid to rein in inflation. Consequently, cement makers met with officials and agreed to a moratorium on price rise for a year. “There is a fear on margins getting squeezed in the near term for cement companies because of the dual excise policy announced by the government,” R. Rajagopal, head of equities at DBS Cholamandalam Asset Management, said. His holdings ACC and India Cements have fallen 16.4 per cent and 8 per cent between February 28 and March 21. India’s benchmark index was down over 6 per cent by Wednesday since the start of 2007. Infrastructure and real estate stocks have fallen even more, due to valuation worries, budget decisions and concern property prices might have risen too high. Stocks such as IVRCL Infrastructures & Projects Ltd and Mahindra Gesco Developers Ltd. have lost 24.12 per cent and 35.06 per cent, respectively. The sector has dropped to the seventh place in the equity fund managers’ preference list from third in December. In this period, fund managers have generally become cautious, cutting equity exposure and moving to cash. While the equity allocation of diversified funds dropped to 88.65 per cent in mid-March from 95.20 per cent three months back, the proportion of cash has gone up to 10.96 per cent from usual levels of 4-5 per cent. However, the latest poll showed fund managers could cut cash allocation rapidly in the next three months with nearly 62 per cent of the respondents planning to increase equity exposure. Asset managers believe that results from forthcoming elections in Uttar Pradesh, global cues and quarterly corporate results could contribute to market volatility, resulting in some bargains in select stocks. “They are just being cautious to try and identify better opportunities when they can enter,” Mugunthan Siva, chief investment officer, OptiMix division of ING Investment Management (I) Pvt. Ltd. said.
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Estate talk
Bags $2 million Chennai project, writes
Arup Chanda
Mumbai-based Sankalpan group has bagged a $2 million project in Chennai and plans to expand in other states of south India. The group is an integrated realty and premium infrastructure services provider having interests in architectural design consultancy, turnkey outfits, infrastructure projects and commercial real estate development. Having already executed more than 15 projects in Chennai, the company is ready for more. Sankalpan recently bagged a $2 million project interior fit-out turnkey project for a leading Nasdaq- listed IT major Syntel. Talking to The Tribune about the company’s future plans chairman Ninad Randive said: “We are currently looking for potential partners who would bring in financial strength while we contribute out expertise in the project management to develop SEZs in south India. Other than Chennai we will also be concentrating on other cities like Coimbatore, Trivandrum and Hyderabad wherein IT parks and retail infrastructure requirements are
fast escalating.” He said the IT corridor in Chennai is expanding fast and the group plans to grab bigger businesses in the area. It had already executed big turnkey projects for IT major Cognizant and BPO projects for Standard Chartered Bank and Deutsche Bank in the city. The 11-year-old group also has an international presence in Dubai and Singapore. In Dubai the group has executed a project for ABN Amro’s BPO which is a Platinum Green building eco-project and the first of its kind. In Singapore they have a consultancy office. Sankalpan has also bagged a project from a Mumbai-based hospitality group to construct 40 hotels all over the country including a 5-star hotel in Delhi, he added. Randive said that Sankalpan would soon be launching its facility management services as a new business venture and is looking for potential partners. He said: “With globalisation, there is tremendous pressure to match international workplace standards.
This is where a huge need for trained facility managers is being felt across the country and Sankalpan would like to bridge this gap.” The group is planning to compete with other real estate developers to bag part of more than one million sq ft of space within the next year in Chennai itself.
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Call it an image building exercise or an effort to be a cut above the rest, realty giants are now discovering that celebrity signature is the new tang. Reel icons are standing up for real estate, musicdom’s new tune is housing and top players are all game for realtors.
Nishikant Dwivedi traces out Plan 2021 that conjoins twin towns to make it a mega city
Real-estate major Unitech and promoters of India’s first amusement park Appu Ghar, International Amusement Ltd, are jointly setting up two entertainment parks in Noida and Rohini with an investment of about Rs 1,600 crore.
There had been an unprecedented spurt in real estate prices, both in commercial and residential properties, during the last couple of years riding on the increasing purchase power of the consumers and easy availability of finance. However, the recent monetary measures initiated by the RBI, which resulted in hardening of interest rates, had led to an impression that the ‘bubble’ in the real estate sector will burst. In fact, in some areas across the country there has been correction in the real estate prices during the past couple of months.
If the Municipal Corporation of Hyderabad has its way, builders in Hyderabad will need to have a licence before they can take up any project. Till now, only architects and planners are required to register with the municipal authorities.