Water Crisis: Bengaluru-Based Realty Stocks Fall As Karnataka Weighs Construction Ban
The Karnataka government is contemplating a five-year ban on construction of multi-storey residential buildings in Bengaluru, considering the acute water crisis in the city, Deputy Chief Minister G Parameshwara said on Thursday.
Shares of Bengaluru-based real estate firms declined on the news. In early morning trade Friday, Sobha Ltd. shares fell as much as 7 percent to Rs 507, while those of Puravankara Projects Ltd. declined as much as 6 percent to Rs 69.40. Brigade Enterprises Ltd. and Prestige Estate Projects Ltd. shed as much as 5.7 percent and 4 percent, respectively.
Speaking to reporters on Thursday, Parameshwara alleged failure on the part of builders to provide water to those dwelling in apartments. The builders sell the apartments to families without assuring them of water availability, he said. When the water sources go dry, the apartment dwellers depend on tankers, and the water supplied through the tankers cause water-borne and skin diseases, he claimed.
Due to water scarcity, deliberations were on to ban the construction of apartments in Bengaluru for the next five years, Parameshwara said.
The government would soon convene a meeting of all the builders and developers to seek their opinion on the issue to take a final call, he said. The deputy chief minister said he has directed officials of municipality Bruhat Bengaluru Mahanagara Palike to make sure that the apartments have functional sewage treatment plants.
Stating that the Cauvery fifth stage water supply project was in progress,the deputy chief minister said it would be inadequate to meet the water requirements of the city. Hence, officials have been directed to prepare a detailed project report to bring water from Linganamakki dam in Shivamogga district, around 400 km from Bengaluru near coastal Karnataka.
"I have heard of opposition to this project (water from Linganamakki) too. Once the detailed project report is ready, we will examine the pros and cons of the project," he said.