New Delhi (Agency):Godrej Properties, a significant real estate company in India, revealed that its board has green-lighted Rs 155 crore ($20 million) for repair work at its completed ‘Godrej Summit’ housing project in Gurugram, Haryana. The decision comes in response to the discovery of chloride in the concretes used in the buildings, which can cause corrosion of steel reinforcement when in contact with water.
The problematic concrete was discovered last year after the partial collapse of a residential tower in the Chintels Paradiso project in Gurugram, which led to the death of two women. The collapse was attributed to widespread corrosion of steel reinforcement in many towers of the society.
Following the unfortunate incident, Godrej Properties arranged for an external expert to conduct a thorough independent assessment of a quality issue discovered in the ‘Godrej Summit’ project. The external expert’s assessment confirmed the presence of chloride in the concrete used in the project.
Despite this, the expert concluded that with the necessary repairs and maintenance, the buildings should perform as expected over their intended design life. With this in mind, Godrej Properties allocated an estimated Rs 155 crore to cover repair, maintenance, customer claims, and any related costs. The funds have been provided in the unaudited financial results of the company for the quarter ended June and were approved by the Board on Wednesday.
In a regulatory filing, the real estate firm stated that its subsidiary, Godrej Projects Development Ltd (GPDL), which completed the Godrej Summit project in phases in 2017 and 2018, has the right to claim against the contractors who built the project.
GPDL has also made a generous offer to buy back units or provide rentals to all unit holders of the project. The company will account for the buyback once the relevant documentation with GPDL is executed by interested customers.
The ‘Godrej Summit’ project, comprising a total saleable area of 2.1 million square feet, was developed by GPDL in partnership with the landowner. According to an investor presentation, GPDL had a 65 per cent economic interest in the project in terms of the saleable area.
Godrej Properties, part of the larger business conglomerate Godrej Group, is a significant player in India’s real estate sector. It has a strong presence in major urban areas including the Mumbai-Metropolitan Region (MMR), Delhi-NCR, Pune and Bengaluru.
