Noida Authority Boosts Escrow Monitoring to Curb Defaults
The Noida Authority is set to hire a consultancy firm to oversee its financial operations, monitor insolvency cases under the National Company Law Tribunal (NCLT), and enhance internal coordination. The selected consultant will assist in executing escrow agreements and provide timely updates on insolvency proceedings.
Request for Proposal (RFP) Issued
The Authority has released a Request for Proposal (RFP) for consultancy services, inviting bids from interested firms. The deadline for submissions is February 18, followed by a technical evaluation on February 19. Initially, the firm will be contracted for a one-year term.
Escrow Monitoring Mechanism to Curb Defaults
Noida Authority leases land parcels for development under specific agreements. However, numerous developers have failed to comply with these terms, leading to project delays and defaults on land payments. To address these challenges, the Authority plans to implement an escrow monitoring mechanism, ensuring timely payment settlements when third-party rights are created through the sale of units, apartments, or plots.
The appointed consultant will play a vital role in drafting and executing escrow agreements while consistently monitoring fund flows. This initiative is part of a broader strategy to recover outstanding dues from defaulting developers, who collectively owe the Authority thousands of crores. These jointly managed escrow accounts will safeguard buyer funds, preventing developers from diverting resources to other projects instead of settling their financial obligations.
Role in Insolvency Monitoring
Beyond escrow monitoring, the consultancy firm will also track companies undergoing insolvency proceedings at the NCLT. The Authority requires real-time updates on at-risk firms, including those yet to enter formal insolvency. By closely monitoring these cases, the Authority aims to make well-informed decisions and take proactive measures to protect its financial interests.
For developers already facing insolvency, the consultant will assist in filing claims, coordinating with the Committee of Creditors (CoC), and ensuring active participation in the resolution process. With 17 group housing projects in Noida currently under NCLT proceedings, this oversight is crucial for safeguarding the Authority’s financial stake.
Conclusion
The Noida Authority’s move to introduce escrow monitoring and strengthen insolvency oversight reflects a strategic approach to improving financial discipline and ensuring project completion. The appointed consultancy firm will be instrumental in executing this vision by enhancing fund management, reducing defaults, and closely tracking insolvency cases.
Read more: Noida Pending Registries: Homebuyers Demand Urgent Action
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