NEW DELHI, MAY 23, 2020: The National Real Estate Development Council (NAREDCO) announced the creation of a platform which will enable its members to address the key issue of disruption in the supply chain, due to the COVID-19 pandemic. This platform will also work towards improving the supply chain and speeding up construction work.
With the aim of helping mitigate the crisis facing real estate developers, NAREDCO and the Royal Institute of Chartered Surveyors (RICS) held a webinar session with members discussing ways of ‘Rejuvenating Supply Chain for Real Estate and Construction recovery’.
The discussions had members suggesting strategies aimed at mitigating the impact of COVID-19 on real estate. Key challenges being faced include disrupted supply chain, availability of workers, liquidity crunch and improving overall construction activities across the country.
As the situation moves closer to normalization with lockdowns easing across India, real estate developers are now looking forward to rapid traction in terms of construction activities as also liquidity relief from the government.
Dr. Niranjan Hiranandani, President, NAREDCO, said, “We need to find out ways in which we can cooperate with each other in the immediate term, and support our suppliers. One option could be to pool our resources; NAREDCO can set up a platform which can be a Supply Chain Emergency Sourcing Platform. If anyone has a problem, a pooling of resources can help normalize the supply chain. Secondly, working with preferred suppliers, we can collate orders to get supplies at a preferred rate. Thirdly, we need to get credit facilities. We will collate problems of members and represent these before the Finance Ministry and the RBI Governor, and discuss what can be done to solve the problems.”
He went to say, “There are too many links missing in the supply chain. Many suppliers are in the containment or RED Zones, so we are in a quandary. We need to improve the supply chain. Two aspects where we have a positive response: first, the Ministry of Home Affairs (MHA) has allowed workers who are ‘in situ’ (i.e. ‘on-site’) to carry out construction work. This was the first relief, especially for pre-monsoon activity. The second relief is: you can carry out the rest of the construction activities, provided workmen are ‘in situ’. Initially, the MHA officials were unwilling to let construction activities other than emergency and pre-monsoon activities to start, now they have agreed to further construction work also going ahead. Luckily, some cities have opened up after the lockdown, and construction work has started,” said Dr Niranjan Hiranandani.
The webinar also discussed the RBI Repo Rate Cut, NAREDCO welcomed the decision taken by the RBI Governor, as also expects an announcement soon on the ‘one-time rollover’ of debt to enable restructuring of existing loans for the real estate industry. The announcement made earlier today will spur demand and is likely to mitigate the ill-impact of COVID-19 pandemic.