HUDCO outlines agenda to improve housing

scenario in India

Interview with Mr. V. P. Baligar, Chairman and managing director, HUDCO

HUDCO is a Public Sector Company, under the Ministry of Housing & Urban Poverty Alleviation (MoHUPA) and HUDCO has been a key partner with the Government in building assets for the Nation. In its operations, HUDCO lays a considerable emphasis on the housing need of the 'deprived' i.e. Economically Weaker Sections (EWS) and Low-Income Groups (LIG). The core purpose of HUDCO is to undertake housing and urban infrastructure development programmes in the country, provide long-term finance for construction of houses for residential purposes in urban & rural areas and finance the setting up of the new or satellite towns and industrial enterprise for building material.

Built Expressions caught up with Mr. V. P. Baligar, Chairman and managing director, HUDCO for an exclusive interview on the sidelines of recently held third ‘All-India Police Housing Conference,’ Bangalore.

1.      What according to you is the most viable technology that can be adopted in the present circumstances with acute shortage of construction manpower?

With the rising cost of construction, it is imperative to adopt cost-effective technology yet does not compromise on quality. There are many cost effective building materials and technologies developed by various R&D bodies including the works of Lauri Baker which can well serve housing needs. HUDCO earlier proposed compressed mud technology, which was using soil (got from digging foundation) and cement. We have also used ‘Fly Ash Technology’. With a view to propagate, disseminate and promote these innovative and cost effective housing technologies and to transfer them to the field situation, the Government of India and HUDCO launched a major programme for the establishment of 600 National Network of Building Centres or Nirmithi Kendras across the country.

Now, we are witnessing technologies from all over the world coming to India. There should not be any boundaries for technology. I think whichever technology works for quality, time and cost we should adopt.

2.      HUDCO sanctioned over Rs. 20,000 crore in the financial year 2011-12. What was the break-up for different projects under HUDCO?

During the year, HUDCO sanctioned 130 schemes for a loan amount of Rs 20,511 crore.  About 30percent of the amount for housing and 70 percent for infrastructure and our housing ranges from economically weaker section (below Rs. 1 lakh per annum) housing to Lower Income Group (LIG), Middle Income Group (MIG) and Higher Income Group (HIG). We have included police housing, zilla panchayat housing and rural housing. We also provide housing for other government servants and we have retail finance. Our infrastructure lending ranges from water supply, sewerage to ports, airports, metros, roads, power and for almost every kind of urban infrastructure.

3.      Apart from the financing operations, HUDCO promotes research and studies and help propagate use of local building materials. In this context, what kind of work HUDCO is doing?

Human Settlement Management Institute, the training and research wing of HUDCO, was founded in 1985 by the Corporation in order to provide training support for professionals working in its borrowing organizations and to establish a forum for interaction of administrators, professionals, researchers and others engaged with the issues and day-to-day practice of human settlement development.

Generally, we provide 1.5 percent of our Profit after Tax for R&D that comes to Rs. 3.5 crore to Rs. 4 crore every year. We have been supporting R&D through different institutions like IITs, IIMs, school of planning and architecture in Delhi and other reputed engineering colleges. We have associated with organizations such as TERI. We fund state administrative training institutes for instance, Mysore and Kolkata. We give about Rs. 60 lakh in three years for setting up of HUDCO Chair and take up studies and research in such institutions.  We do ‘Capacity Building’ of urban local bodies and a large of number of urban administrators; elected representatives do need capacity building.

We have supported bamboo research in IITs as bamboo is a green building material in terms of low energy consumption and environment friendly. HUDCO has entered into a MoU with IIT-Delhi and supported with a funding of Rs. 71 lakhs. The amount of grant has been released to IIT-Delhi for setting up National Resource Facility on Bamboo Technologies to promote rural industrialization with focus on bamboo products by upgrading the artisans’ skills, developing improved processes technologies and machinery through scientific technological and design inputs. Work has started in IIT-Delhi. In designs, we encourage environmental-friendly technologies, low-cost housing technologies, or town planning.

4.      Are there any programs initiated by HUDCO to meet out the challenges of construction labour shortage? What is your advice to the construction sector?

Yes, construction sector is crippled by the labour shortage problem. To tackle this, we have joined with CIDC to cater to this need. Skill Commission of India and Skill Development Commission of the state governments are also concerned about the lack of skill in the construction industry. In addition, we are providing training in conservation of heritage buildings in Delhi. Under this initiative, we offer skill sets required for conserving monuments. Our association with National Culture Fund, we offer expertise in the maintenance of heritage buildings. In HUDCO, we have set up an innovation cell, through which we are going to set a venture capital along with National Innovation Council. In the next few months we will set up venture capital firm in National Innovation Council and officially launch it.

Even the construction industry has to wake up to this challenge and think out of the box solutions to counter labour shortage. The sector should create skill sets for workers and pay them more.  In a scenario of acute shortage of manpower, we need to adopt few technologies such as ready-to-build technologies. In many foreign countries, housing parts are available and you just need to assemble to make a house. Going forward, precast technology is going to be the future. For instance, in Punjab, with precast technology, a company can build a house in ten hours. We should encourage such technologies that give an edge on cutting down the time, cost and quality control. Contractors must adhere to the laws of the land whether they are environmental laws or labour laws or any other quality control parameters.

Violation of laws is rampant in the construction industry including real estate sector and hence, it carries a bad image. Central government is thinking of putting up a regulator, which help the real estate to come up with regulations on the real estate and in turn will help customers by protecting the rights of the house owners.

5.   What is your vision for 2020? What kind of innovative projects HUDCO has undertaken?

We have already doled out a plan for 2020. Our aim is to fund 1 million houses and earn a business of Rs. 50,000 crore a year. We are reviving some of our National Network of Building Centres or Nirmithi Kendras, an initiative by the Government of India and HUDCO with a view to propagate, disseminate and promote these innovative and cost effective housing technologies.

We plan to take up Adarsh Nagar Yojana, through this programme, if any city has deficit in infrastructure and we will fund that deficit in infrastructure. Also, we help the city to prepare a city development plan and fund that project for the next five to ten years.

We are coming out with a scheme called HONEY (HUDCO Nava Nagar Yojana). There are about 7,900 cities and towns in India. Unfortunately, every town is developing haphazardly. When a private developer comes and purchases land develops sites and services, sells and runs away. They don’t even know who will maintain later and ignorant about the clearance. So, we would like to stop this haphazard development. We would like to fund urban local bodies and urban development authorities to develop housing stock next to each and every town in the country with the help of HUDCO. In addition to funding, HUDCO will also provide design support and services and also finance. We will also have a financial model in which they don’t have to be dependent on the state governments. HUDCO will help them with the loan and help them also to recover the loan. The initiative is financed in such a way that it becomes self supporting. Few of commercial land or buildings, residences for middle group or higher group will be included under this scheme. Our aim is to make all urban local body and urban local authority to be self supportive rather than dependent on the state governments.