The long-awaited Dharavi redevelopment project has finally moved forward with the Adani Group winning the tender.
Adani Group has submitted a bid of Rs 5,069 crore for the redevelopment of one of the world’s largest slums.
DLF, which quoted Rs 2,025 crore for the 259-hectare redevelopment project in Dharavi, was ranked second, said SVR Srinivas, CEO of the project.
“We will now send the details to the government, which will consider and give final approval,” Srinivas said PTI.
He added that the Eknath Shinde government would approve it in a few weeks.
Let’s take a closer look at Dharavi and the project:
Located in central Mumbai, Dharavi has a population of 6.5 lakh spread over 2.5 square kilometers.
This translates to 2,27,136 people living per square kilometer – families of eight to 10 living in 10×10 huts.
Apart from congested slums, Dharavi is home to several small-scale leather, ceramics and textile manufacturing units.
The district has 5,000 GST-registered businesses, 15,000 one-room factories and is an international export hub with an annual turnover of $1 billion, according to BMC data.
The already famous area gained even more notoriety after the 2008 movie “The Poor Millionaire” and then during the COVID-19 pandemic, when the “Dharavi model” was applauded by local authorities and the World Health Organization.
The origin of the project
The Maharashtra government first decided to redevelop Dharavi in 2004, according to the Slum Rehabilitation Authority website.
File image of Dharavi. Firstpost
The state passed a government resolution on 4 February 2004 endorsing its action plan to redevelop Dharavi as an integrated planned city.
He decided to use land as a resource to cross-subsidize development costs.
It is planned to divide the land into sectors and appoint entrepreneurs for the same.
The government has also decided to notify the entire Dharavi as an undeveloped area and appoint a special planning authority for planning and development.
Stuck attempts
The redevelopment of Dharavi, one of Asia’s largest slums, has revealed more than 600 acres of prime land, but the project has faced obstacles over the past two decades.
According to Moneycontrolthe state government has made at least four attempts to put out bids for the redevelopment over the past 15 years, most recently in 2018, with no luck.
According to Financial Expressin 2018, Adani Group’s Rs 4,529 crore bid fell short of Dubai-based Seclink Technology Corporation’s Rs 7,200 crore.
This bidding process was canceled by the previous Maha Vikas Agadi government after the transfer of railway land became a source of contention between the state government and the Centre.
New offers are invited
The Shinde government in September decided to invite fresh bids for the project and announced a global tender in October.
According to the hindu Union Railway Minister Ashwini Vaishnau and Maharashtra Deputy Chief Minister Devendra Fadnavis on October 18 signed an agreement allotting over 47.5 acres of railway land in Dadar for the Dharavi Redevelopment Project.
The government then released a statement saying the concession was offered in light of the overall market slowdown and the COVID-19 pandemic.
Maharashtra Deputy Chief Minister Devendra Fadnavis
Adani’s bid is for the entire project at a cost of Rs 20,000 crore and the total time frame for rehabilitation of the slum dwellers is seven years.
Eight bidders, including entities from South Korea and the UAE, attended a preliminary meeting held in October, and three of them actually bid for the project.
Naman Group, a city-based developer, was the third whose bid failed to qualify.
The government has asked for a minimum consolidated net worth of Rs 20,000 crore to select the winning bid and is likely to assess both technical and financial feasibility before awarding the project to the highest bidder.
The winning bidder is required to form a special purpose vehicle (SPV) to implement the project and the phased schedule of investment has also been set by the government.
According to the hindu The SPV will work with the Dharavi Redevelopment Authority to implement Phase 1 of the project, which involves redevelopment of specific areas comprising slums and non-slums, buildings and pavilions.
According to financial express, 20 percent of the initial investment will have to be submitted before signing the development agreement and another 20 percent upon submission of an integrated master plan.
The ball is now in the government’s hands.
According to Financial Expressthe state has declared a Floor Area Index (FSI) of 4 for the redevelopment along with multiple concessions including the premium paid by the developer, inspection charges, goods and services tax.
Adani already has a real estate arm in the country that has already executed or is in the process of executing projects in the financial capital, including one in suburban Ghatkopar and another in Byculla in central Mumbai.
Adani realty started with Shantivan Integrated City in Ahmedabad in 2010; then in Gurugram with Oyster Grande in 2012; and finally in Mumbai in 2014 with the Western Heights project in Andheri, according to Financial Express.
There are currently five projects under construction in Ahmedabad, two in Jagatpur, three in Gurugram and one in Pune, according to the newspaper.
With information from agencies
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