Everyday in the newspapers we read about unscrupulous builders fleecing innocent tenants and taking them for a ride. We can tap this market for business by promoting ourselves as their saviors.
C & W can tap the redevelopment market that exists in the city
- Can enjoy decision making powers with regard to the technical aspects of the project. In other words all decisions relating to engineering, procurement and construction. Presently there are many clients who do not involve the PMC in the procurement for the project, but is asked to just monitor the construction. There is no point in monitoring vendors who are already empanelled with the clients.
- Can give the common people an alternative which is transparent and at the same time professional.
- Word of mouth publicity can get us more jobs of the same nature.
- New opportunity for the capital market division to get investors for such projects.
- An opportunity to serve the common people.
- An opportunity for the transaction division to broker the sale of the excess flats that are constructed due to granting of extra FSI for the project.
- An opportunity for C & W to enter the residential market for transaction services.
- Entry to the residential market by the transaction division can be leveraged to cater to the corporate that have requirements for residential apartments for their staff.
- Employment opportunities for many people.
- If we manage one such project successfully then we will get the first mover advantage in this market.
- Moreover, this will help us move up the value chain and work as an EPC contractor for clients.
- Decision making on procurement matters by the Project Manager may lead to corruption and give rise to integrity issues.
- It will be very difficult to recover our payments from the cooperative housing societies.
Players in the model:
The modus operandi is as under:
PMC approaches cooperative societies who want to go in for redevelopment.
The Cooperative Society appoints the PMC.
PMC takes approval from the tenants and applying the 70:30 rule takes up the project for redevelopment
Capital Markets division (a sister concern of the PMC division) hunts for finance for the project under redevelopment.
PMC appoints a liaison consultant to deal with the BMC, landowner and other govt. authorities.
PMC appoints an architect in collision with the secretary of the cooperative society to prepare the design scheme in keeping with BMC byelaws and restrictions for open spaces, etc.
PMC appoints the services consultant (if required)
PMC conducts the preconstruction stage in the project.
PMC participates in the construction stage for the project.
PMC carries out the project closeout and handover.
The extra FSI obtained for the redevelopment project as a result of housing slum dwellers can be sold in the open market by the Transaction Services Division(a sister concern of the PMC) acting as the broking agency for the financer.
The financer obtains his construction cost and profits for investment from the sale of the extra space created.
Payments to the various project participants will be certified by the PMC and they will be made from the escrow account created in a bank in the joint name of the secretary of the society and the financer. The cheques have to be signed by both of them.
Our present endeavor to tap builders may not be very successful because builders generally prefer handling projects themselves by taking on staff on their rolls as it is their core competency.
Moreover, if at all they do take us on board, it will only be for monitoring the vendors that they have appointed. Thus we have no control on procurement.