Business history: How Jaypee Infratech’s stalled construction projects left homebuyers in the lurch

The irrigation departments of north Indian states must have had something to do with entrepreneurship. While Amtek was floated by the son of a Haryana state irrigation department official, its neighbour Uttar Pradesh’s counterpart was not to be left behind. Only in this case, it was the official himself who quit his job midway and began his entrepreneurial journey.

Jaiprakash Gaur, an engineer with a diploma from the University of Roorkee, began his voyage as a contractor in the late 1950s. After taking up small jobs for the department he had worked in earlier, Gaur slowly ventured into bigger ventures. By 1979, he had floated Jaiprakash Associates and started eyeing larger hydel electric power projects along the tributaries of the Ganga, such as the Tehri Dam and the Narmada Valley Project.

A good relationship with successive governments stood them in good stead. Their reputation for taking care of employees and their associates preceded them. It was not until the late 1990s that Jaypee entered real estate in a big way. At that time, the government was toying with new models of infrastructure creation, where land development was offered as a barter. This model has been the source of many a failed company in the...

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