Almost two decades after it was first proposed, Mumbai’s Dharavi redevelopment project is finally close to taking off. The makeover of Asia’s largest slum will be done by Adani Realty, the real estate arm of the Adani Group.
The group quoted the highest amount of Rs 5,069 crore for the project’s initial investment of Rs 20,000 crore, followed by DLF Group’s Rs 2,025 crore. The minimum investment set by the government was Rs 1,600 crore.
According to the tender criteria, the company will have to form a special purpose vehicle (SPV). 20% of this initial investment will then need to be submitted prior to signing the development agreement and an additional 20% upon submission of an integrated master plan.
Dharavi stands on a piece of prime land in the heart of Mumbai and is just a stone’s throw from India’s richest business district, the Bandra-Kurla complex, where commercial office premiums are among the highest in the country.
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Spread over 2.8 km, the slum is home to small businesses that employ over 100,000 people. The state has envisioned this growth to be transformed into a cluster of high-rise buildings with improved urban infrastructure. This led to the resettlement of 68,000 people, including slum dwellers and those with commercial establishments.
SVR Srinivas, CEO of the Dharavi Redevelopment Project, said that out of three bidders, only Adani and DLF remained in the race as Naman Group did not qualify for the technical bid.
The Maharashtra government aims to complete the slum reconstruction project in 17 years and the rehabilitation in the next seven years.
In terms of process, the bid will now move to the committee of secretaries to the state government, which will discuss the proposal. The government has already announced a floor area index (FSI) of 4 for the redevelopment along with several concessions in the form of premium paid by the developer, inspection charges, goods and services tax, etc.
The notification issued by the state government’s housing department in October said that the bidding company or lead member of the consortium should have a minimum consolidated net worth of Rs 20,000 crore as per the latest balance sheet and that balance sheet should not be earlier than March 31 , 2022
Although eight companies, including firms from South Korea and the UAE, attended the pre-bid meeting on October 11, only three bids were received on Tuesday, the last day of submissions.
This is Adani Group’s second attempt at the project. In 2018, it had bid for Rs 4,529 crore, but Dubai-based Seclink Technology Corporation emerged as the highest bidder with Rs 7,200 crore. The bidding process was later canceled by the previous Maha Vikas Agadi government as the transfer of railway land became a bone of contention between the Center and the state government. In October, the newly formed Maharashtra government, led by Chief Minister Eknath Shinde and Deputy Chief Minister Devendra Fadnavis, cleared the call for fresh tenders for the project.
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Adani Group’s real estate arm Adani Realty is almost 12 years old and has been aggressively expanding its presence in Mumbai. It started with Shantivan Integrated City in Ahmedabad in 2010, made its foray into Gurugram with Oyster Grande in 2012 and into Mumbai in 2014 with the Western Heights project in Andheri. There are currently five projects under construction in Ahmedabad, two in Jagatpur, three in Gurugram and one in Pune.