The construction sector in Pune and its surrounding regions is grappling with severe challenges. Following alleged threats from Raj Thackeray’s Maharashtra Navnirman Sena, many migrant workers from UP and Bihar have fled, prompting builders to activate the force majeure clause to alleviate liabilities related to delays and financial overruns.
With labor costs almost spiraling out of control due to a dearth of workers and a scarcity of skilled hands, prospective buyers will find themselves paying significantly more for their apartments. Kumar Gera, chairman of Gera Developers, stated, “We have informed our customers that there will be a delay in the delivery of flats due to this force majeure situation.” He further emphasized, “We can’t say when the sub-contractor’s labor will be back, when normalcy will return, or when flats will be ready.” He noted that the labor force on project sites has plummeted from 2,300 to just 1,400, leading to an astonishing 75% slowdown in construction progress. Mr. Gera also holds the position of founding chairman at the Confederation of Real Estate Developers Association of India.
Lalit Kumar Jain, chairman of Kumar Builders and president of the Promoters and Builders Association of Pune (PBAP), underscored that labor costs have surged by a staggering 250%, now reaching Rs 750 per day. As a result, it will soon be inevitable for residential property prices to increase as developers pass these costs onto buyers.
Mr. Jain noted, “We believe that 50% of laborers have gone back, and labor rates have surged from Rs 350 a day to Rs 750. We are not even sure if the laborers will come back.” He added that builders are actively seeking laborers in Bihar and UP, attempting to coax them back to work, but the response has been lackluster thus far. Furthermore, he stated, “The Builders Association will wait until the end of March to reassess the situation. At that point, members will make a decision regarding informing their customers about potential price hikes.”