Gujarat Real Estate Authority Seeks State Intervention for Abandoned GIFT City WTC Development

The Gujarat Real Estate Regulatory Authority (GujRERA) has taken an unprecedented step by formally requesting the state's Urban Development Department (UDD) to intervene in the revival of the stalled World Trade Centre project in GIFT City. The unprecedented appeal highlights mounting concerns as thousands of investors face uncertainty over incomplete towers and frozen investments.

Current Project Status

Sources revealed that the abandoned development, which was originally launched between 2014 and 2015, had been planned to comprise four towers. However, only two towers reached completion while Towers B and C remain unfinished due to construction halts.

Officials indicated that the primary challenge arose from the project promoter's arrest by the Enforcement Directorate on real estate fraud allegations, which effectively paralyzed both the developer operations and the project's progress.

Investor Predicament

The regulatory authority noted that while the allottees' association possessed legal rights to assume control and complete the project under RERA provisions, they informed GujRERA about their inability to undertake such a massive responsibility.

Additionally, GIFT City authorities had already cancelled the development agreement for the incomplete towers, creating both legal and operational complications. This situation has resulted in investor funds remaining locked without clear prospects for recovery or project delivery.

Regulatory Milestone

Industry experts pointed out that this represents the first occasion where GujRERA has approached the UDD for direct intervention in completing a stalled real estate project. The primary objective focuses on protecting consumer interests and preventing the erosion of investor confidence in the sector.

Possible Resolution Strategies

According to sources familiar with the matter, GIFT City authorities remain receptive to potential solutions and are examining various approaches to complete the project. These options potentially include engaging a new developer or establishing special arrangements that would ensure project completion while safeguarding investor interests.

Enhanced Banking Regulations

Alongside this intervention request, GujRERA has implemented new guidelines for banks involved in project financing. The regulatory authority emphasized that mortgage registrations must be completed promptly with revenue authorities.

Furthermore, the guidelines specify that loans should not be approved where sale agreements precede mortgage deeds. The authority also mandated enhanced due diligence procedures, particularly when promoters already have outstanding debts with other banking institutions.

Industry Implications

Real estate analysts suggested that GujRERA's groundbreaking approach of engaging the UDD for assistance could signal a pivotal moment for regulatory accountability and project completion in Gujarat's real estate sector. The upcoming weeks will prove crucial in determining whether these stalled towers find a viable path to completion or face continued deadlock.