Now that Adani Realty has put in the highest bid for the Dharavi redevelopment project, the next step will be for the state government to ratify the winner. Thereafter, an SPV (Special Purpose Vehicle) will be formed to get the project underway.
Among Asia's largest slum clusters, Dharavi became world-famous as one of the locations where the Oscar-winning film Slumdog Millionaire was shot.
Adani Realty, DLF, and the Naman Group had submitted bids for the redevelopment of Dharavi and the rehabilitation of its slum dwellers. Adani Realty had quoted Rs 5,069 crore as the initial investment, while DLF had quoted Rs 2,025 crore. Naman Group was disqualified as it did not meet the technical criteria.
SPV
Unlike previous tenders for the project, the current tender requires that an SPV be formed, which will have Maharashtra government officials as directors, along with experts and representatives of the lead partner who has won the bid. The SPV will prepare a master plan for the redevelopment and rehabilitation project.
The Maharashtra government aims to complete the rehabilitation of slum dwellers within seven years from the start of construction, and complete the entire project — including the sale component — in 17 years. The sale component is the portion the developer will sell in the market to recover his costs.
Also read: MC Explains | How Dharavi, one of Asia's largest slum clusters, will get a facelift Next steps
The slum cluster proposed for redevelopment sprawls over 240 acres and is home to about a million people. Alongside preparing the master plan Adani Realty will also have to carry out a survey of the number of legit tenements in Dharavi. It will have to verify documents per the format prescribed by the government and decide on the legality / illegality of tenements.
When will the construction start?
The project is divided into two components. One is the rehab component, meant for rehabilitating close to a million people. As part of the rehabilitation process, the government has decided to give a 405-square-feet flat to each eligible slum dweller.
The second is the sale component, through which the developer is expected to (more than) recover the costs of developing the overall project.
According to officials involved in the bidding process, there are a lot of formalities and paperwork to be completed before construction can begin. A senior state government official said, ``We can start construction in 2023 after completing the survey and after the master plan is approved by relevant authorities.’’
SVR Srinivas, CEO of the Dharavi Redevelopment Project, had said that it would take 4-5 months to form the SPV and appoint a project management consultant, etc.
Scale of construction
According to officials, in the next 17 years over 10 million square feet will be constructed at a cost of over Rs 20,000 crore. Of this, 2-3 million square feet is meant for sale in the open market, while the rest is for rehabilitation of the slum dwellers.
Also read: Dharavi redevelopment & rehabilitation: Companies want project duration increased About Dharavi
One of the densest slums in the Asia-Pacific region, Dharavi is also a hub for several small-scale, unorganised industries that manufacture medicines, leather, footwear, and clothes. It is located in close proximity to the Bandra Kurla complex, a commercial hub.
Dharavi was among the worst affected areas during Covid, with more than 9,000 cases and over 100 deaths reported.
Concerns
Local residents and small businesses are worried about being moved out of Dharavi. They say that authorities should share a proper roadmap and obtain the consent of the project-affected, and ensure that rehabilitation is done in the same area.
Local resident Ashwin Mane said: ``Tenders for redevelopment have been floated many times earlier but nothing has happened. This is the first time someone has actually won it. However, we are still in the dark. The government needs to engage with the locals. This will ensure we get proper information and that a few anti-social elements do not misguide the slum dwellers for ulterior motives.’’
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