The role of project man­age­ment and its im­por­tance for RERA in In­dia

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Gur­jot Bha­tia feed­back@livemint.com Gur­jot Bha­tia is Man­ag­ing Di­rec­tor, Project Man­age­ment, CBRE South Asia Pvt Ltd

The Real Es­tate Reg­u­la­tion and De­vel­op­ment Act (RERA) 2016 was passed by the In­dian Par­lia­ment in March 2016, paving the way for a for­mal gov­er­nance author­ity for In­dia’s real es­tate sec­tor. The RERA Bill man­dates the reg­is­tra­tion of real es­tate projects and di­rects devel­op­ers to de­lin­eate func­tions and du­ties of pro­mot­ers and sets out penal­ties for non-com­pli­ance.

The Act is a def­i­nite step to­wards bring­ing in greater trans­parency to the realty sec­tor. The in­dus­try is likely to have teething is­sues with the Act com­ing into force; but a reg­u­la­tor will bring in cred­i­bil­ity for the sec­tor in the long run, which is likely to open up fund­ing av­enues and bring down lend­ing costs. This is ex­pected to come with a pinch of salt as the sec­tor is likely to wit­ness some changes such as con­sol­i­da­tion of play­ers, and in­creas­ing in­ci­dence of joint ven­tures for de­vel­op­ment of projects.

All in all, with a few mod­i­fi­ca­tions, the Act could prove to be a land­mark leg­is­la­tion, re­sult­ing in a rad­i­cal shift in In­dia’s realty dy­nam­ics.

RERA in­tends to bring about the much-needed ef­fi­ciency and trans­parency in In­dian Real Es­tate via uni­form reg­u­la­tion. With RERA be­ing im­ple­mented across the states, devel­op­ers are likely to fo­cus on the timely de­liv­ery of their on­go­ing projects and also re­main in­creas­ingly flex­i­ble on pric­ing and pay­ment struc­tures. The Act shall di­rectly im­pact the tra­di­tional and gen­er­ally adopted ap­proach to launch or com­plete Projects.

For ex­am­ple, Projects shall have to be reg­is­tered launched con­structed and mar­keted in phases with only those com­mon fa­cil­i­ties which can be com­pleted within the promised time­lines. Devel­op­ers shall have to strictly ad­here to sanc­tioned plans and com­mit­ted spec­i­fi­ca­tions.

They shall have to man­age their cash flow much more wisely, tightly and with trans­parency as they would be re­quired to put aside 70% of project funds in a ded­i­cated escrow ac­count linked to the project. Devel­op­ers shall be re­quired to sub­mit de­tails like project plans, ap­provals and sanc­tions, land ti­tle sta­tus, date of com­ple­tion and par­tic­u­lars of Project pro­mot­ers, con­trac­tors, ar­chi­tects, with the State RERA.

While the ad­vent of RERA is be­ing her­alded as a “gamechanger” and a “great en­abler” for the In­dia Real Es­tate in­dus­try in the long run, it is also be­ing seen a dis­rupter in the short term.

The abil­ity to subscribe to and sus­tain the re­quire­ments of the Act by var­i­ous quar­ters of the In­dus­try is of con­cern. This is where Project Man­age­ment shall prove to be a per­fect so­lu­tion to over­come any short-term chal­lenges that Devel­op­ers and var­i­ous other stake­hold­ers may face.

Project Man­age­ment is a dis­ci­pline that uses Peo­ple, sub­scribes them to a well-reg­u­lated and trans­par­ent Process, thus en­abling the achieve­ment of the de­sired Per­for­mance on any Project. A well writ­ten and fully adopted Project Man­age­ment process, for­mu­lated in ac­cor­dance to the de­sired Project goals helps over­ride the in­ef­fi­cien­cies that are brought about due to hu­man er­rors, un­rec­og­nized risks and lack of plan­ning in any Project.

More than ever, it is ex­tremely im­por­tant now for de­vel­op­ment com­pa­nies to in­sti­tu­tion­al­ize the dis­ci­pline of Project Man­age­ment.

A com­pre­hen­sive Project Man­age­ment Plan, which brings to­gether all Project ac­tiv­i­ties to syn­chro­nize to­wards a timely, cost ef­fec­tive and qual­ity de­liv­ery of a Project will en­able guid­ing Project devel­op­ers to plan, con­struct and de­liver a project with cer­tainty, trans­parency and inl ine with the guard-rails of RERA.

MINT/FILE

RERA aims to bring in greater trans­parency in the realty sec­tor.

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