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Ludhiana City Centre
Launched with a lot of glitz and fanfare the ambitious Ludhiana City Centre project, the Congress government’s dream project, became the ‘centre of controversy’ as soon as the government changed in the state. While the legal battle rages in courts, rust and rot have set in at the construction site and several investors have burnt their fingers and suffered huge losses making them wary of
government-sponsored projects, reports Navin S. Grewal
The Ludhiana City Centre scam has left many genuine investors disillusioned and sceptic about government-sponsored projects. Infrastructure worth several crores put into the project is destined to go waste as the project has been stopped pending enquiry and it is also likely to sink several crore rupees put into the project by investors, many of whom are now reluctant to come and claim their share out of fear of being hounded by the Punjab Vigilance Bureau. But one clear lesson that many people have learnt is to say no to any state-sponsored project, especially the ones that are unlikely to be completed before the end of a particular government’s tenure, because the next government may create obstacles on one or the other pretext. Property agents, who were so actively involved in selling shares in the Ludhiana City Centre, are now reluctant to even admit that they have had anything to do with the project. The association of the project with a particular political party has in fact become a jinx that has left investors, big and small, in a fix. “What is the fault of an investor, most people who had bought stakes in the Ludhiana City Centre can neither claim their money back nor have any hope that the project will see the light of the day. It is a dead investment of at least Rs 22 crore which the Today Homes deposited with the Ludhiana Improvement Trust as part payment from the sale proceeds”, says Harjit Singh, a Ludhiana-based investment advisor. What today appears to be an abandoned structure of concrete, was not very long ago projected as one of the biggest achievements of the previous Congress government. It was supposed to be “the fourth biggest city centre project of the world, with a helipad and a mini golf course on its rooftop besides having parking space for 8,000 cars. Spread over an area of 26 acres that aimed at changing the skyline of Ludhiana and the surrounding areas by providing the biggest mega shopping malls in the country, the biggest atrium, 12 multiplexes with a seating capacity of 2,500 persons, a food court, residential apartments, healthcare, library, museums. Besides, the centre planned to have a 200-room five-star hotel with a helipad on the terrace to allow VIPs to land in the city”, recalls Atama Singh (name changed), a property agent, whose office is just across the City Centre site. However, due to fear of the Punjab Vigilance Bureau he is quick to add, “I know nothing about the space size or the rates at which commercial space was being sold, I only learnt about the scam from newspapers or from the vigilance officials who have been frequenting the property dealers in the area to get details of the properties they booked on behalf of Today Homes, the company building the Ludhiana City Centre. I have heard that all transactions were done at the company’s head office at Delhi. But you please don’t quote me on this”. Another Shaheed Bhagat Singh Nagar resident, Manohar Lal, who often goes for a walk in the area around the incomplete construction says that the manner in which the project has been abandoned is not at all conducive to investment in the state. “Where is the guarantee that a project started by one government will be allowed to be completed by another, in the end it is the investor who will suffer and no investor would like to put his or her money in a project that faces similar uncertainty”. Besides the financial loss suffered by many, residents of the area too are suffering because of the abandoned project. Work on the two storeys of the basement was left midway causing several problems for the residents of the area. Due to digging in the middle, the road that runs around the Ludhiana City Centre has sunk at many places, making it unfit for driving. This has also led to water accumulation that has damaged many nearby buildings, says Atama Singh. “The price of property in the adjoining residential areas that had sky rocketed after the announcement of the project by Amarinder Singh government has plummeted after the work at the project came to a halt in February / March last year. There are no new buyers, while many people who had invested in properties in the vicinity in the hope of reaping good returns are stuck. Many have cut losses and sold their acquisitions at a heavy loss,” says Karan, son of a leading real estate agent in the area. Hardev Singh, former general secretary of the Property Dealers Association says that the area saw a huge investment in 100 to 500 square yard residential plots after the project was announced as everyone wanted to own property in the vicinity of this high profile city centre. But today there are no buyers, and those who had invested in the hope of getting somewhere close to Rs 35,000 per square yard are now willing to sell their property for anywhere between Rs 13,000 to 20,000 per square yard. Investors, who were earlier looking at this project, are now putting their money into other areas. In this scenario government projects will be viewed with a lot of scepticism in future. Many private projects that were started after the Ludhiana City Centre have been completed and are doing good business. These include the West End Mall on Ferozepur Road, Flames on Satpal Mittal Road. Projects like Max on Ferozepur Road are on the verge of completion and people who invested in these projects have made good money in terms of asset appreciation, he says. Interestingly, most property dealers in the area are unwilling to accept that they have had anything to do with the sale or purchase associated with Today Homes, the company that was building the Ludhiana City Centre, a joint venture of
the Ludhiana Improvement Trust and Today Homes and Infrastructure Pvt Ltd, before it was halted by the SAD-BJP government on charges that some Rs 3,000 crore that would have come to the state ex-chequer have been siphoned off by the company in connivance with former local bodies minister Chaudhary Jagjit Singh and former
Chief Minister Amarinder Singh. On the ground, Today Homes still has an office at the site, but it remains closed most of the time, with its skeletal staff having little to do. The concrete pillars and the iron rods used in the concrete are getting rusted and may eventually become unsuitable for construction because of corrosion. The massive project that proposed to have a golf range on the top of the building, may finally have to be demolished and the 40 to 50 feet of ground that has been dug up for basement will either be filled or the entire construction work will be started all over again. “If the project remains like this for some more time, the existing construction will become unsafe for taking the weight of five or six storeys on top,” a Today Homes official said on the condition of anonymity. The Ludhiana City Centre Project was launched after the Improvement Trust cancelled nearly 400 allotted plots of 125 sq yards each.
Most of these allottees are yet to get alternative residential plots. SAD working President Sukhbir Badal has, in a public statement, said he is not against the Ludhiana City Centre project, but he wants the Rs 3,000 siphoned off by the previous government to be recovered before the project is allowed to be resumed. In practical terms it only means that the people should abandon all hope that the project will see the light of the day in the near future.
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Illegal colonies dot Faridabad
Illegal colonies not only spoil the character of a city but also burden the limited infrastructure, thus putting a spanner in development works,
The Haryana government’s plan to develop Faridabad as a well-planned city is being undermined on account of continued illegal and unplanned growth of colonies and other residential clusters. If Faridabad once earned the notoriety of being a slum haven inviting uncharitable descriptions regarding its planning, now the city is witnessing unbridled growth of illegal colonies on a large scale. Although plots in illegal colonies are cheaper, those who set up houses there straightaway book a right to the city life. In fact, several illegal colonies have come up and are in various stages of construction in Hodal and Palwal segment of this industrial district in spite of the general impression that the unplanned growth cannot take place on a sustained basis and on such a large scale without the knowledge of the authorities concerned. The municipal corporation of Faridabad (MCF) and the district town and country planning (enforcement) are the two bodies directly responsible for checking the mess in their areas of jurisdiction. With a huge chunk of geographical landmass, including Faridabad (Old and NIT) and Ballabhgarh, and the core city areas, fall under the jurisdiction of the MCF, thus the MCF becomes directly accountable for any such anomaly. The MCF, in order to check the menace of illegal constructions, had set up a demolition cell, headed by an officer of the rank of executive engineer about seven years back. Earlier, the three zones of the MCF areas, namely Old Faridabad, NIT and Ballabhgarh, had respective zonal and taxation officers looking after illegal constructions and their demolitions. However, the arrangement of having one nodal office headed by executive engineer has been done away with and the responsibility has been given to the offices of the respective joint commissioners of the three zones. The new illegal colonies that have either come up or are in various stages of construction are in the areas falling on the other side of the canal across Old Faridabad. The already established unauthorised colonies falling in the NIT area are getting further enlarged. Parvatia Colony, Pradhan Colony, Dabua Colony and SJM Nagar are some such colonies. Same is the case with Ballabhgarh where illegal constructions and expansions of colonies like Adarsh Nagar, Jeevan Nagar, New Subash Colony and Azad colony continues. According to many, there is a strange pattern in the administrative intervention. The authorities apparently look the other way round while the illegal constructions are on. In the midst of public outcry cases are registered against some persons like servants and such other associated with the owners of the plots or houses. And as soon as the issue fades from public memory, the mafia comes back with a vengeance to complete the project. Most of the time the land sharks do plotting for colonies in an unauthorised way, sell plots and vanish from the scene after pocketing hefty profits and leaving their clients in the lurch.
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Go exclusive A huge influx of sparkling malls with finely tuned marketing strategies has certainly gripped every shopping enthusiast in this millennium city. However, with the growing competition theme or speciality malls are setting new trends and transforming the fundamental activity of shopping into a lifestyle statement. Theme malls is the new trend adopted by promoters and developers to add a touch of exclusivity to the new malls coming up the city. Ranging from the malls for meant exclusively for marriage shopping, IT-professionals, mall-cum-hotel to discount-malls, the developers are unveiling projects based on the requirements of local retailers and their future business potential. As per the business strategy, developers are focusing on developing theme malls in order to convert footfalls into some real business for shop owners. These ‘solo’ malls are believed to be more popular than the ‘multi-hued’ ones. The first such speciality mall was the Gold Souk in Gurgaon, which is dedicated entirely to jewellery collection. This mall houses some of the biggest brands in the jewellery business in India as well as abroad. While talking to The Tribune, Aerens Gold Souk international Ltd, vice-chairman, Ashish Gupta said initially, people in India had a craze for a mall, but now the concept is shifting towards more modern and hi tech malls. He said serious buyers always want to shop at a place where there is variety and these speciality malls bring all brands under one roof. He said the concept of theme malls not only benefits the buyers but the sellers also get quality customers. He said the concept of theme malls will also increase the conversion rate for the retailers. Gold Souk has conversion of around 80 per cent per annum as only serious buyers visit the mall for shopping. A spokesmen of DLF said currently the company is working on four different formats regarding the setting up of malls, which include neighbourhood, premium, destination and luxury malls. These would cater to different customer segments with specific requirements. He said among the theme malls the company is building Emporio Mall at Vasant Kunj, which will be a luxury mall. “This 3.2 lakh sq ft. mall will house leading international and national luxury retailers. This super luxury mall will bring together the world’s top brands to the Indian market. The mall is expected to have more than 100 outlets. Both neighbourhood malls and theme malls have their own catchments and retail mix and so one cannot really make a choice between them”. Raheja Developers, GM (Sales and Marketing) Harinder Dhillon stated that as the market scenario is changing due to better awareness and tremendous infrastructure development, the company is planning to come up with such malls soon. He said the concept of these theme malls blends well with the kind of busy schedules people have these days. These specialised malls fulfil the needs of a particular segment. All latest brands of a particular genre are available at one place with different qualities and buyers don’t have to run from pillar to post to get the best.
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Realty regulator role mooted for National Housing Board
HDFC Chairman Deepak Parekh has suggested that National Housing Bank should be made the real estate regulator at the national level to ensure orderly growth of the property market. “National Housing Bank could take up the role of an apex real estate regulator,” Parekh said at a conference organised by Confederation of Real Estate Developers' Association in New Delhi. Presently, the NHB regulates housing finance companies, he said, adding its role can be expanded to include real estate sector. The logistical challenge in setting up a real estate regulator is that it will have to be done at the state level since land is a state subject under the Constitution, he said. Even if each state has its own regulator there can be a national body that promotes best practices and oversees the functioning of state-level realty regulators, he said. Speaking about the need of a real estate regulator, Parekh said: “Just anybody today can become a developer and a broker... as the real estate market gets more attractive, it is only natural to find that mushrooming of new developers and new brokers.” He said mutual fund and insurance agents sell products after getting licenses “but when one buys a house, which today costs the common man more than an arm and a leg, there is no regulator to ensure that the transaction is in order”. Real estate regulator’s primary role would be to ensure adequate consumer protection in case of real estate fraud. “Why should there be any resistance to the concept of a basic consumer protection for an individual’s largest investment in a physical asset in his lifetime,” he said. Parekh, however, said the role of the regulator should not be similar to banking ombudsman but should be wider. “The regulator can mandate that all apartments be sold on the basis of carpet area and not super-built up area,” he added. CREDAI’s President Rajni Ajmera opposed the government’s move to bring real estate regulator for Delhi, saying already it takes more than 12 months to get various approvals to start the project. He requested the Minister of Urban Development Jaipal Reddy not to bring a regulator. Parekh highlighted that nearly 26 per cent of the total foreign direct investment in 2007 came to real estate sector and over 40 per cent of the total funds in the country’s primary share market has been mopped up by the realty firms.
— PTI
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Where are affordable homes for the poor?
Despite the realty boom a worrying scenario has emerged vis-a-vis meeting the basic requirement of shelter for the poor and the marginalised.
The year 2007 saw an unprecedented boom in Indian real estate sector with foreign investors pouring their money into India and some of the big domestic players making it big by launching several real estate projects. The outlook for 2008 also remains quite positive. However, one question that now haunts everybody is where are affordable homes for poor and the marginalized? With Central and state housing agencies having failed to meet the demand in the “affordable homes” category and the private sector players more keen on multiplying their profits through high end housing and commercial projects, a worrying scenario is fast emerging vis-à-vis meeting the basic requirement of shelter for the poor and the
marginalised. In this context, the three-day NATCON 2008 organised by the CREDAI was a timely one as suggestions poured in from the government as well as realtors to address this important aspect in the real estate growth story. Minister of state for housing and poverty alleviation Kumari Selja, who was present at the inaugural session of NATCON 2008, that got over on Wednesday, stressed that governmental effort alone would not suffice to provide housing for the poor and the private players will have to compliment and supplement public sector bodies’ efforts to really make a difference. “The urban housing backlog with increased urbanisation in India assumes alarming proportions, especially for the Economically Weaker Sections (EWS) and Low Income Groups (LIG), which constitute more than 99 per cent share of total housing shortage of
“This magnitude of backlog is evident by the fact that 21 per cent of our total urban population lives in slums or slum like conditions and 35 per cent of the households are one-room tenements,” she pointed out. “Public housing agencies have been in the forefront of providing housing for the EWS. Given the magnitude of the housing shortage and budgetary constraints of both Central and state governments, it is amply clear that public sector efforts will not suffice in fulfilling the housing demand. “Therefore, the private sector has to play a more proactive role in taking up housing programmes on a massive scale for the poor and low-income groups with social commitments,” the minister said. In the context, she said the Central government intends to involve the private sector in the Jawahar Lal Nehru National Urban Renewal Mission (JNNURM) for completion of 1.5 million dwelling units in the country by the end of 2012. Government shall be a partner by providing enabling environment through incentives and concessions for low income housing. She further added. Union minister for urban development Jaipal S. Reddy stated that “State governments should give incentives to builders for constructing small housing units/apartments”. Expressing his thoughts on the theme of the convention, “Real Estate for all”, CREDAI Chairperson Kumar Gera said, “Though the real estate sector in the country is growing at a stupendous rate, it is not benefiting all.” “The sum total of direct and indirect taxes, duties and levies amounts to a very significant figure, almost in excess of 25 per cent, for a housing unit that has a pan India average cost of Rs 2,700 sq ft. This negates the impact of this boom and widens the gap between what one can afford and what is available. Therefore, there is an urgent need to find ways to reduce these costs in order to decrease the price of the end product,” he said. “The way to make available affordable housing could be through setting up of ‘Special residential zones’ that would enjoy various exemptions, as in the case of the SEZs. These SRZ’s would have small residential units below 60-70 sq. mtrs that would make available large-scale affordable housing for the masses,” he said. CREDAI President Rajni Ajmera said “Natcon 2008 is CREDAI’s attempt to bring together developers, real estate professionals, policy makers, financial institutions and investors under one roof to debate, discuss and explore the new avenues in the real estate sector in India. The three-day convention had discussions and deliberations on topics such as - policies and regulatory environment, real estate indices and developer rating, reforms in real estate, affordable housing: Making it reality on PPP and future of real estate in the next five years, shifting ownership patterns and influence of FDI, new dynamics in retail/ hospitality/entertainment and expected role of government and private sector in real estate.
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HOME DECOR
Soft flooring options are gaining a firm ground in Indian homes,
Soft floorings have become the in thing, thanks to the arrival of international brands like Berry Floors, Pergo, Crono, etc, in Indian markets. These have redefined the preferences of Indian customers like never before. With western preferences entering Indian homes more and more people, feel experts, are now opting for soft floors like laminated wooden flooring and carpeting, for their domestic utility rather than sticking to costlier ‘hard’ options. The look surely is international and adds an elite touch to home decor. A recent study had clearly spelt the growing craze for wooden and carpet floorings amongst urban Indian populace, which is increasingly understanding the scientific edge which soft floors have over the harder ones. Umesh Ghai, an expert in the business of floorings and director of Floor Square, Sector 8, Chandigarh, asserts that keeping the financial, aesthetic as well as the health points of view in mind, soft floorings in the form of wooden boards or carpets have a scientifically proven edge. While medical effects of concrete hard floors like marble, tiles and concrete structures on our body are proven, it is also noteworthy that hard floorings increase the incidence of disorders due to more usage of domestic floors bare footed. On the contrary wooden and carpeted floors reduce such incidences. Similarly, concrete building structures tend to utilise more energy in summers as well as in winters when buildings, owing to their concrete construction, become either extremely cold or hot. Alternately, wooden and carpet flooring tends to reduce these extremities inversely for a comfortable living. The experts also agree that the cost factor is a vital factor that is quite overwhelming in prioritising the use of wooden floors. While laying a high quality marble floor may cost around Rs 80 to Rs 90 per sq feet with additional costs up to Rs 20 as labour charges for each foot of fitting, a wooden floor with a wide range of designs and top quality wood costs about Rs 85 per square feet. This saving of around 15 to 20 per cent is over and above the other health and environment-friendly benefits. While the increase in the use of ceramic tiles in the exterior areas of houses has increased considerably, the use of wooden floors is increasing day by day in areas like bedrooms, dining and drawing rooms. However, the wooden floors are not recommended for wet surface like bathrooms and kitchens.
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GROUND REALTY
Galvanised Iron, PVC, Stainless Steel, Copper, there is plenty to choose from while selecting water supply pipes for your home or commercial buildings.
Jagvir Goyal gives guidelines to help you choose the right kind of pipes
Both, the choice of right kind of water supply pipes and their proper joining and fixing are important to have trouble free water supply in buildings. Here are some guidelines to choose the right kind of pipes.
Choice of material
Water supply pipes available in the market are of Galvanised Iron (GI), PVC, Stainless Steel (SS) and Copper. Another type of pipes called composite pipes are also being used and their use is constantly increasing. Each material has its plus and minus points. GI pipe is time tested. Its fittings are easily available. Labour for it is easily available. However, wherever water is hard, it gets corroded with time and its scaling starts. Copper pipes provide better water pressure as a pressure drop may occur in GI pipes as their inner surface is relatively rough in comparison to that of copper pipes. However, Copper and SS pipes are costlier. If water has dissolved oxygen in it, these also get corroded. cPVC and uPVC pipes are easily available in market and corrosion or scaling too is lesser in them. But these get damaged if water has organic impurities. If subjected to UV rays or direct sunlight continuously, again these get damaged. Sometimes, their fittings too are not available. Plumbers too may not be easily available for PVC pipe work. Their use for hot water supply is also debatable.
Cost factor
At one time, copper pipes had become available at the price of C class GI pipes. Last year saw a steep rise in the cost of copper and now, copper pipes are much more costlier than GI pipes. Choose copper pipes only if you want to go for the best without any cost considerations in mind. Metros are finding their increased use in multi-storeyed buildings due to minimum pressure drop in them. PVC pipes and fittings, if used, bring a saving of 10 to 15 per cent over B class GI pipes and fittings. Composite pipes cost almost the same as B class GI pipes. Cost wise, PVC pipes are cheaper, Copper and SS pipes are costly while GI and composite pipes are reasonably priced. Keeping all these factors in view, cost wise, medium class GI pipes and composite pipes are a sane choice.
Composite pipes
More and more architects are recommending composite pipes today. However, their long term performance is yet to be seen. New materials often catch the fancy of architects and contractors as the companies offer big discounts to promote their material and marketing is aggressive. Composite pipes have an aluminium core coated with HDPE layers on its inner as well as outer side. In between HDPE and aluminium, paper thin bonder layers are sandwiched. These pipes are also written as PE-AL-PE pipes and give the impression of being made of five layers. However, these are supplied in coil form. These cost Rs 2 to 3 less per running foot than C class GI pipes.
PVC Pipes
After an initial slump and reluctance towards accepting a new material, PVC pipes have also begun to come under better use now. Of course, PVC pipes are cheaper than GI pipes but their fittings are costlier. Specially, the PVC fittings with brass couplers inserted in them are quite costly. PVC pipes produced for water supply purpose, sanitary installations, drainage or agricultural purposes have different compositions and ISI marks. Among these, those for water supply are most important. Only such PVC pipes that carry IS 4985 are suitable for drinking water supply.
Final selection
From the above analysis, it becomes clear that none of these materials can be considered as perfect. Each material has its advantages and disadvantages. Yet one of these has to be chosen. While choosing one of these pipes, you must bear in mind that nothing can be taken as life-long and one that serves better than others is to be chosen. Keeping all factors in view, the final choice still remains to be GI pipes. Though B class GI pipe is most commonly used, at the most, C class GI pipe of reputed make can be chosen.
Buying GI pipes
While buying GI pipes, buy these yourself. Medium class pipes are also called B Class pipes. Remember that GI pipe categorisation is in reverse order. Class A pipes are lightest and cheapest and Class C pipes are heaviest and costliest. Though B class pipes are generally used, best combination will be to choose C class pipe outside the building and B class pipe for internal water supply network. A ½” diameter B class GI pipe costs about Rs 70 per metre length or about Rs 22 per foot length these days.
Check points
A visible mark for a B class pipe is that it carries a blue band of 3 inch length at each end of its 6 metres or 20 feet length. Screwed or socketed part is included in this 6 metre length. A Class pipes carry yellow bands and C class pipes carry Red bands. Scratch the blue band a bit to check that blue colour has not been painted over the yellow to deceive you. You may look for IS 1239 mark on the pipes. IS 1239 is for steel tubes to be used for carrying water. By checking this mark, you will be sure that only ISI marked pipes have been galvanized. Choose a reputed brand. Tata, Jindal (Hissar), Kalinga are some of the reputed brands.
Check the weight
GI pipes can also be checked by weight. A class pipes are lightest and C class pipes are heaviest. Weights of commonly used diameters of these pipes are as under:
Buying pipe fittings
Must choose GI pipe fittings and specials of a reputed brand. SVW, UNIK and U are some of the reputed brands. Never choose square elbows for right angles. These obstruct the flow of water. Always prefer a bend than an elbow as a bend has large bending radius and doesn’t obstruct flow. Wherever an elbow is to be used, use a round elbow instead of a square elbow. However, plan such a layout that the number of bends in it is minimised.
Check the threads
Ask the plumber to examine the threads at the end of pipes. The threads must be available for full length and depth. Otherwise ask the plumber to use his threading tool to correct the threads. To keep the threads perfect, the couplings over pipes should not be removed till last moment and threads should be bared only when the joints are to be made. Take care and happy building! The writer is Superintending Engineer Civil,
PSEB, he can be reached at www.jagvirgoyal.com
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Now enjoy snore-free snooze
Those who loved dreaming in a duvet, it is a bed that makes dreams real. You could throw a party in the “Starry night sleeping centre” with its surround-sound system and a TV projector in the headboard capable of beaming images up to 10 ft across on to the facing wall. If you are a workaholic, you could remain busy with an attached computer, internet connection and wireless keypad. And above all if you keep on sulking about your partner’s snoring habits that keep you awake at night, it is now a time to enjoy a good night’s sleep. The bed would heat or cool the mattress before you get in and would monitor your body movement and breathing patterns and adjust itself to eliminate snoring. The bed-which will cost up to 25,000 pounds has features based on military technology, including the vibration-detection system designed to stop the snores. When it sensed a snore, a motor in the mattress lifted the sleeping position forward by seven degrees. It also provides tips on improving sleep quality, offered via the computer screen. There is also an iPod docking station and a hard disc storage system capable of holding and playing back up to 400,000 songs or 2,000 hours of video. “The bed is a place for reading, watching movies, spending time with the kids, listening to music
and even folding laundry. It’s time our bed becomes our sleep counsellor. And when we improve our
sleep, we can improve our quality of life,” the Daily Mail quoted Mark Quinn of manufacturers Leggett & Platt as saying. The Starry Night has been designed to be the hub of the home on the basis that the bed is no longer simply a place for sleep and conjugal delights, he added.
— UNI
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Real News New Delhi: AMR Group, mainly engaged in gold and jewellery business, is foraying into the booming property market and plans to invest about Rs 1,000 crore in the next two years to develop three real estate projects in Uttar Pradesh and Haryana. “We are developing a 25-acre IT/ITeS park in Greater Noida at an investment of Rs 800 crore, which includes land cost,” Director of AMR Infrastructures Ltd, the flagship company of the group, Brij Mohan Gupta told PTI. The project will have a total developable area of two million sq ft, of which, 1.5 million sq ft would be for office and remaining would be retail space. The company has got the land from state governments to develop these projects. The IT park would have six-screen multiplex, which has been taken on lease by Satyam Cineplex, he said. The construction of the project is expected to get
completed by 2009. AMR Infrastructures' second project is located at Kundli (Haryana) and falls in the national capital region. The company is developing 112 service apartments and a shopping mall covering
80,000 sq ft of retail space. The investment in this project, which is expected to get completed by 2009, would be Rs 120 crore, Gupta said. The national capital-based company has bagged one acre land from Haryana Urban Development Authority in Kurukshetra to build a shopping mall spread over
60,000 sq ft and a 3- screen multiplex. The project is expected be completed by the year-end. “The investment in Kurukshetra project would be Rs 60 crore,” Gupta said. When asked how the company would fund the Rs 1,000 crore investment, he said it would be through internal accruals and advances from sales. AMR Infrastructures, which has a land bank of about 500 acre for future projects, would adopt both sale and lease models to operate its shopping malls, Gupta said.
— PTI
Choice Hotels to manage five hotels in Punjab
Chandigarh: Hospitality services provider Choice Hotels India will manage five hotels in Punjab coming up at an investment of Rs 400 crore. “We have tied up with promoters of these four hotels under franchise model, whereby we would give our own brands to these hotels and we would also manage them," Choice Hotels India, chief executive officer, Vilas Pawar said in Chandigarh on Wednesday. Three hotels are coming up in Ludhiana, while two hotels would be set up in Bathinda and Amritsar. “These hotels are in different stages of construction at the moment and they are expected to be completed by the end of this year,” he said. “So far Choice Hotels has been involved in branding and marketing hotels but will henceforth also manage all new properties. We intend to manage all our upcoming budget hotels. It will help us in enhancing our brand image and add to our bottomline," Pawar said. The company, which is a part of Choice Hotels International, has hotels chains with 32 properties over 22 destinations including New Delhi, Mumbai, Chennai, Ahemdabad, Aurangabad, Hyderabad, Lucknow, Pune and Shimla among others. It has four brands in India which are Clarion, Quality, Comfort and Inn.
— PTI
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TAX TIPS
Q. We are a partnership concern and are manufacturing industrial fasteners. The factory building and the machinery was completely destroyed by a fire which broke out on account of short circuit. Is the amount received from insurance company with regard to the destruction of these assets exigible to capital gains tax? I am advised that there has been some change in law, which brings such an amount to taxability. — Sudhir Kumar A. In Vania Silk Mills Private Limited vs. CIT, the Supreme Court had held that insurance claim received on account of destruction of asset is not chargeable to tax as the destruction does not amount to a transfer. The judgement has been nullified to some extent by introduction of a new sub section (1A) to Section 45 of the Act w.e.f. assessment year 2000-01. According to the said sub section where a person receives during the previous year, any money or other assets under any insurance from an insurer and the compensation has been received because of damage or destruction of a capital asset and such damage and destruction is as a result of following categories of circumstances: (a) flood, typhoon, hurricane, cyclone, earthquake or other convulsion of nature; or (b) riot or civil disturbance; or (c) accidental fire explosion; or (d) action by any enemy or action taken in combating an enemy (whether with or without a declaration of war). then any profit or gain arising from the receipt of such money shall be chargeable to Income-tax under the head “capital gains”. The amount received from the insurance company shall be the deemed be full value of consideration received or accruing as a result of the transfer of the asset. Accordingly in your case the amount received from the insurance company on account of destruction of factory building and the machinery will be treated as full value of consideration accruing as a result of the transfer of such capital asset. The amount received in excess of the written down value of such capital assets would be taxable as a short term capital gain in view of the provisions of Section 50 of the Act.
Tax on forfeited advance
money
Q. I had received an advance of Rs 5 lakh towards the sale of my residential house which was allotted to me at the time of the Partition. In accordance with the Agreement to Sell I had the right to forfeit the said amount in case the buyer did not make the payment of the entire agreed consideration by a particular date. As the buyer could not fulfil the conditions required under the Agreement to Sell, the amount has been forfeited by me. I have now sold the house to another buyer who took over the possession in October 2007. What would be treatment of amount received as advance from the earlier buyer which was forfeited by me? — A.K. Anand, Delhi A. In accordance with the provisions of Section 51 of the Income-tax Act 1961 (the Act), where any capital asset was on any previous occasion the subject of negotiations for its transfer, any advance or other money received and retained by the assessee in respect of such negotiation shall be deducted from the cost for which the asset was acquired or the written down value or the fair market value as the case may be, in computing the cost of acquisition. The amount of Rs five lakh forfeited by you will have to be reduced from the cost of acquisition of the residential house which you have sold. In case after deducting advance received for the sale of property the result is a minus figure, the cost of acquisition would be nil.
Computing capital gain
Q. I am intending to sell my residential house in Hisar and buy a residential flat in Faridabad. I am informed that for the purposes of computation of capital gain the circle rate will be taken as the rate for computing capital gain. Is the information so given to me correct? — Sher Singh, Hisar A. Section 50C of the Act provides that where the consideration received or accruing as a result of the transfer on the capital gain being land or building or both is less than the value adopted or assessed by any authority of state government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purposes of Section 48, deemed to be full value of consideration received or accruing as a result of such transfer. Therefore, the information given to you is correct and the capital gains on the sale of your house will have to be computed on the basis of the circle rate if any, notified by the state government in case the consideration received by you is less than the value adopted or assessed for the purposes of the payment of stamp duty.
Dissolution of partnership
Q. A partnership firm comprising four partners is owner of a building in which the business of the firm is being carried on. The business which has been carried on by the partnership for the last few years has not been very successful and it has been mutually decided by the partners to dissolve the partnership. What would be the consequences of such dissolution? — Anil Kumar, Pathankot A. According to the provisions of Section 45(4) of the Act, the profits and gains arising from the transfer of a capital asset by way of distribution of capital assets on the dissolution of the firm shall be chargeable as income of the firm of the previous year in which the said transfer takes place and for the purposes of such transfer fair value of the asset as on the date of transfer shall be deemed to be the full value of consideration, received or accruing as a result of the transfer. The following conditions must be satisfied for being covered under the provisions of Section 45(4) of the Act: (a) The assessee is a firm; (b) There is a distribution of capital asset on the dissolution of the firm; (c) The distribution may be of a long term or a short term capital asset. Accordingly, the distribution of the capital asset (i.e. a factory building) as specified in the query would be covered within the term “distribution of capital assets on the dissolution of the firm” and therefore the firm would be liable to pay capital gains tax. The fair market value of the factory building on the date of transfer/(dissolution) would be taken as full value of the consideration. The writer can be
contacted at sc@scvasudeva.com
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Buzz on Bourses Mumbai:
Hyderabad-based construction player Ramky Infrastructure plans to raise around Rs 50 crore from Foreign Institutional Investors and Private Equity players before its issue hits the capital market. “We have plans to make some pre-IPO placement. Two private equity players and a couple of FIIs have evinced interest to buy equity shares. Lead managers for the issue are in talks with them,” A.R Reddy, Chairman, Ramky Infrastructure informed. Ramky Infrastructure, which is sitting on an order book of Rs 4,159 crore as on September 31, 2007, proposes to raise around Rs 400 crore through the initial public offering, for which it has already submitted the Draft Red Herring Prospectus with SEBI. “We are expecting SEBI approval by February-end and as soon as we receive it, the issue will hit the market,” Reddy said.
— PTI
Lok Housing seeks delisting
from DSE
New Delhi: Realty estate developer Lok Housing and Construction is delisting from the Delhi Stock Exchange. “The company is in the process of making application for voluntary delisting of its equity shares from the DSE,” its company secretary Vijay B.Sharma said in a public notice. The Mumbai-based company is seeking “delisting from the DSE because the benefits accruing to the investors by keeping the equity shares listed on the stock market did not commensurate with the cost incurred by the company for continued listing,” the notice stated. Lok Housing equity, however, would continue to be listed at the Bombay Stock Exchange.
— PTI
Alchemist Realty issues
bonus equity shares
New Delhi: Mumbai-based Alchemist Realty Ltd’s board has approved the increase in share capital by Rs 7.50 crore by addition of 75 lakh equity shares of Rs 10 each. The board has also approved the bonus issue of one equity share for every one equity share held by the shareholder, a company statement said.
— UNI
Red Fort Capital launches Rs 1,000 crore fund
Mumbai: Red Fort Capital, one of India’s leading international private equity real estate firms, has announced the launch of its first domestic fund for Rs 1,000 crore targeting land level deals. The fund, to be garnered through invitation only, would focus on land and realty projects worth over Rs 5,000 crore, the company said in a release here. The investment would be in under-valued land for residential, commercial, IT, retail and hospitality projects and focus on key cities across India, such as re-development projects here, affordable housing and land in key urban centres, providing investors a diversified exposure to land appreciation.
— UNI
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Realty shares command highest PE ratio
Mumbai: Companies engaged in realty sector are commanding highest Price Earning (PE) ratio on stock exchanges at present followed by firms from the capital goods and power sectors. According to the Bombay Stock Exchange which computes PE for its dozen odd sectoral indices, the average PE of BSE Realty Index was as high as 71.55 as on January 4, while the average PE ratio for BSE Capital Goods was second highest at 51.20. The BSE Power Index PE ratio was at 42.94. Price earning ratio indicates market’s fancy for any particular share or sector. The companies that are growing fast generally command high PE ratios. The PE ratio is arrived at by dividing the share price by the earning per share. Sandip Shenoy, Strategist at PINC Research said the high PE ratio of realty shares is indicating growth and potential of the sector. Many realty companies are growing very fast, he pointed out. According to analysts, DLF Ltd which is the leader of the realty pack, individually has PE ratio of 214 and thus may have skewed the PE ratio of the BSE Realty Index to some extent. The yield of BSE Realty Index is as low as 0.05 as of January 4. The yield is the relationship between the company’s share price and its dividend payment. The higher the share price, the lower is the yield. Given the current high prices, the yield of many companies is negligible. But the yield of 0.05 for the realty sector is unusually low. The PE ratio for other sectors given on the BSE website is on the lower side. Although metal shares have appreciated sharply, the average PE for BSE Metal index is still modest at 18.43.
— PTI
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With access to global trends in interior décor becoming easy, more and more Indian homes are opting for soft floorings as compared to the traditional hard concrete floors. 
What is the right material for water supply pipes?’ This is one question that keeps hovering in the minds of all house builders. When asked, engineers, architects, suppliers and users express different opinions thus increasing the confusion. Earlier, only GI pipes were available and there was no alternative thus no confusion prevailed. Now, PVC, copper and composite pipes have arrived in the market and choice has become difficult.