The Credai Ahmedabad, representing real estate developers, has requested the Gujarat Real Estate Regulatory Authority (GujRERA) to provide a six-month extension for current housing projects under the force majeure clause of the RERA Act.
This request is based on the increasing costs of construction, disruptions in supply chains, and shortages of labor. In a formal representation to the regulatory body, the association highlighted that the ongoing conflict in West Asia has impacted the supply of crude-related construction materials, thereby hindering project execution and straining financial planning throughout the industry.
Credai Ahmedabad emphasized that developers are encountering challenges in completing their ongoing projects within the stipulated timeframes, and that new project launches and construction activities are also expected to face delays.
The association noted that the prices of essential construction materials, including cement, steel, tiles, aluminum, PVC pipes, paints, ready-mix concrete, cement blocks, and waterproofing materials, have surged significantly since the onset of the conflict. Suppliers have reportedly raised prices by 30% to 60%, while the availability of these materials remains unpredictable.
The association further stated that the increase in input costs has escalated overall project expenses by 10% to 20%, disrupting the budgets and cash-flow projections that were established at the time of project registration. It contended that the current circumstances are beyond the developers’ control and warrant relief under Section 6 of the Real Estate (Regulation and Development) Act, which permits the extension of project timelines in cases of force majeure.
“Developers are confronted with an unprecedented situation where both the availability and affordability of crucial construction materials have been adversely affected simultaneously,” remarked Ankur Desai, secretary of Credai Ahmedabad.
The report also emphasized the increasing labour shortages, indicating that construction activities have become more challenging to maintain during the summer months due to a diminished workforce and inconsistent material supply.
In comparison to the Covid-19 period, Credai Ahmedabad has urged GujRERA to provide a comprehensive six-month extension for project completion deadlines, ensuring that developers are not penalized for delays resulting from external circumstances. Desai mentioned that the association has also requested the regulator’s intervention to enhance the supply of raw materials and to address what it termed as artificial price inflation in the market.
