All allottees of Greater Mohali

INTERIM INSTALLMENT GREATER MOHALI (KHARAR)

1.            Please refer to this office letter of even number dated 19 Mar 13.

2.            Feedback from allottees suggests that the background for calling the Interim Installment has not been correctly understood.

3.            It may be appreciated that all AFNHB schemes including Greater Mohali are self financed by the allottees.  The installment schedule is planned on the basis of the cash flow required for funding the project.  In case the progress of the project is slow, the installment is accordingly delayed / deferred.

4.            In the Greater Mohali project, all installments as per the announced costing were called before the allotment for draw of flats.  The final amount which generally includes additional cost due to allottees suggestions, parking cost, VAT, Service Tax, escalation on articles for which basic price is enumerated in contract and cost of additional areas, if any, is to be paid prior to collection of Clearance and possession letter.  However, in this project the increase of cost due to additional work such as allottees’ suggestion and increase in cost of cement and steel were not recovered in the planned installments.  The final amount due therefore, ranges between Rs.4.49 lacs to Rs. 16.74 lacs per allottee.  The total amount due from allottees as final payment is approx. Rs.75.35 crores.  Since the work in the project is progressing unabated, the project is being funded and the contractors are being paid for the value of work done as per the payment yardstick.  Owing to the large final amount due from allottees, as on date, the project account is in the negative by approx. Rs.35.0 crores.  This deficit amount has been infused into the project by AFNHB from other sources.  In order to cover the deficit in this project, it was decided to call for the interim installment out of the final dues from each allottee.  It is further clarified that the final amount has only been bifurcated partly towards the interim installment and there is no net increase in the finalized cost of dwelling unit.

5.            Since part of the final amount has been called as an installment, equalisation charges are therefore applicable on delayed payment.  The equalisation charges, as term suggests,  are levied to avoid unfair advantage to those who delay their payment vis-à-vis those who have made their payments on schedule.  The equalisation charges are not retained by AFNHB and are credited to the project for collective benefit of all allottees.  In this particular project, AFNHB has collected about Rs. 4.52 crores towards equalisation charges till freezing of the cost.  The entire equalisation charges have been ploughed back to the project  before announcing finalized cost of the respective flats.  It is worth mentioning that not even a single rupee towards equalisation charges is retained by AFNHB.  The same can be verified from the presentation and the costing details provided to allottees.  However, in case the majority feels that equalisation charges are not required then AFNHB can revisit and reverse the equalisation charges. However, this may basically become a penalty for allottees who make timely payment and reward for the defaulters.

6.            The situation has arisen also since despite approx. 500 flats being ready for handing over, lot of allottees have sought deferment due to various reasons such as service exigencies.  At this juncture, AFNHB’s limited resources have been stretched to the extreme by the Mega project.  The AFNHB has received in principle approval for land at Naya Raipur from Govt. of Chhattisgarh and has been allotted land by West Bengal Govt. at Panagarh for which payments have to be made by AFNHB. The issue of equalisation charges can be revisited by the Board based on feedback from allottees.

7.            It is expected that the issue now stands clarified and therefore, all allottees are requested to pay the interim installment by the due date.