Construction of Jagananna Colony houses stalled amid political transition

The construction of houses in the Jagananna Colony project on the outskirts of Visakhapatnam has come to a standstill, attributed to the recent state elections and subsequent political shifts. Despite the conclusion of the polls, construction activities have not resumed, a slowdown tied to the YSR Congress Party (YCP)’s electoral defeat. Contractors involved in the project, reportedly affiliated with the YCP, are hesitant to proceed. The previous YCP government had unofficially awarded construction contracts – 40,000 houses to JNR Group and 20,000 houses to Rocktree Infra – without a formal tender process. Both companies are linked to former YCP MLAs.
A tripartite agreement was made involving the beneficiaries, banks, and contractors, who offered a third option in house construction. Despite the government having no official role, it entrusted the responsibility to relatively inexperienced construction companies. Consequently, 1,09,216 houses were planned across 73 layouts in the city’s suburbs, sanctioned by the central government under the PM Awas Yojana scheme, with an estimated project value of around Rs 2,000 crore. The central government allocated Rs1.8 lakhs per house, while women beneficiaries contributed Rs 35,000 from the bank under the DWCRA loan scheme. The state government provided essential materials like cement, sand, and iron.
The construction, which began two years ago, has not progressed as expected. Notably, Rocktree Infra has failed to meet construction targets, while the JNR group managed to make some progress. Smaller companies struggled to keep up. By the third week of last month, 16,585 houses were completed, 3,850 houses were nearly finished, 759 houses had reached wall construction, 27,953 houses were at the foundation stage, and the foundations for another 29,456 houses were dug. However, construction for 19,426 houses had not commenced. To date, Rs 335 crores have been sanctioned and credited to the construction companies’ accounts by the respective banks.
With the impending formation of a new government, there is uncertainty about whether the JNR group and other smaller companies will continue their work in Jagananna colonies. Officials report a current stagnation, attributing it to the informal assignment of construction tasks rather than a formal tender process. Previously, many officials raised legal concerns about the agreements between beneficiaries and banks, independent of government oversight. This concern is exemplified by the lack of action against Rocktree Infra, despite its negligence over the past two years. It is anticipated that the construction of houses in Jagananna colonies will regain momentum only after the new government takes office and formulates a policy decision on housing.