Telangana: Fate of real estate projects worth Rs 45,000 crore uncertain as migrants head home

The mass exodus of migrant labourers to their respective native places by special trains arranged by the Telangana government has cast a shadow on the real estate sector in the state, particularly for Rs 45,000 crore worth of projects that have been in the works in and around the state capital, Hyderabad.

Over five lakh migrant workers have been stranded in Telangana due to nationwide lockdown restrictions, which were initially enforced for 21 days from March 25 and then further extended for another 19 days till May 3 to contain the spread of coronavirus disease (Covid-19) disease.

Majority of the migrant workers to Telangana are construction labourers – both skilled and unskilled -- who are engaged in various real estate projects and construction activities.

These workers are returning to their native places, particularly to Bihar, Jharkhand, Uttar Pradesh (UP), Rajasthan, Madhya Pradesh (MP) and Chhattisgarh, in batches. While the first batch of 1,200 construction labourers left for their native places in Jharkhand from Hyderabad last Friday, the Telangana government has arranged to ferry the rest of them by arranging special trains.

On Tuesday, 12 special trains, carrying over 15,000 migrant labourers, left for their native places. On Wednesday morning, another three trains, carrying over 4,000 labourers, departed from Hyderabad.

“We had made arrangements for running 40 special trains daily for one week for these stranded migrant labourers. But some of the states, where these labourers belong to, requested us to go slow, as they need to make adequate arrangements for transporting them to their native villages. Besides, they need to be mandatorily quarantined for two weeks,” Telangana chief minister K Chandrasekhar Rao told media persons on Tuesday night.

Rao said of the five lakh-odd stranded migrant workers in Telangana, over three lakhs are involved in the real estate sector and other construction activities. “The construction activities have just started. I had suggested that they stay back in Telangana and we’d take care of them. But, they’re free to return to their native places, as they had wished,” he said.

The real estate industry in Hyderabad, which saw a boom over the last year, is feeling the heat due to the return of the migrant labourers to their respective native places. “Over 80% of the workforce in the real estate sector comprises migrant workers, particularly from Bihar, Jharkhand, UP, Rajasthan and MP. This en masse exodus of the workers will hamper the projects, especially those that are in the final stages of construction and more so, as the constriction activities have just resumed after weeks of lockdown restrictions,” said V Rajasekhar Reddy, general secretary of Confederation of Real Estate Developers’ Associations of India (CREDAI), Telangana chapter.

Reddy blamed the Centre for its hasty move in allowing migrant labourers to return to their native places amid lockdown restrictions that are still in place in some parts of the country. “It’s a risky business for everybody. We don’t know whether and when they would come back to resume work. Even if they come back after a month or two, there is every possibility that they could have contracted SARS-CoV-2 that causes Covid-19 in their native places,” he said.

Telangana Real Estate Developers Association (TREDA), estimated that projects, both residential and commercial, measuring around 300 million square feet, are being held up in and around Hyderabad.

“Assuming that the average basic construction cost is around Rs 1,500 per square feet, around Rs 45,000 crore is locked up in these unfinished projects,” R Chalapathi Rao, president, TREDA, told HT.

C Sekhar Reddy, convener for infrastructure and real estate wing of the Confederation of Indian Industry (CII), Telangana chapter, however, pointed out that real estate ventures that are in the initial stages of completion would be hit the hardest.

“The builder will suffer massive losses due to lack of manpower, escalating input costs such as steel, cement and other materials and also an acute fund crunch,” he said.

Rao hopes that even if 50% of the migrant labourers return after two months, normalcy will be restored in the real estate sector. “We can pool in skilled manpower from the National Academy of Construction and engage local labourers in the interim, apart from adopting the latest technology. We’re hopeful that the sector will regain normalcy and buoyancy within the next six months,” the TREDA president added.