Adani Group emerged as successful bidder to the Dharavi redevelopment plan earlier this week. The conglomerate, headed by Gautam Adani, quoted Rs 5,069 crore to secure the bid while the DLF group had quoted Rs 2,025 crore.
The slum clusters of Dharavi, considered to be the largest such site in Asia, are situated close to major commercial complexes in Mumbai such as the Kurla-Bandra and Mahim. As such, it is prime real estate property which makes this an important project of significant commercial value.
Dharavi is home to a large informal sector with over 1,00,000 employed within the slum area that stretches over 2.8 square kilometres. Over 58,000 families are estimated to stay within these premises and this redevelopment project will have a huge consequence on their lives.
Past Plans And Present Project
This is the not the first time that a tender to redevelop Dharavi was floated. The project has been in the pipeline of the Maharashtra state government for over two decades since the idea was first suggested by architect Mukesh Mehta in 1997. The state government formally initiated the project back in 2003-04 and an action plan regarding this was approved in February 2004.
It was in 2018 that the BJP-Shiv Sena government in Maharashtra notified the formation of a Special Purpose Vehicle (SPV) for redeveloping Dharavi. Global tenders were invited and the winning bidder was expected to have an 80 per cent stake in the SPV while the remaining 20 per cent would be with the state government. The successful bidder would also be responsible for the entire redevelopment and rehabilitation plan.
Back then, although the Dubai-based Seclink Technology Corporation won the tender for Rs 7,200 crore, surpassing Adani Group's bid of Rs 4,529 crore, the project could not take off. The erstwhile Maha Vikas Agadi government, under Shiv Sena's Uddhav Thackeray, had to cancel the project because there was some issue with the transfer of railway land that was under the central government. However, once the BJP came back into power in coalition with Eknath Shinde, these creases were ironed out and eventually Adani came up with the winning bid.
Adani's Gain
The entire project, which will be worth around Rs 20,000 crore, will give Adani access to prime real estate space in India's financial hub. Additionally, the state government's decision to cross-subsidise the cost of development will be a huge gain for Adani Group.
Under the current bid agreement, “Apart from equity of ₹400 crore, any investment required for the project shall be brought by the lead partner in the form of compulsorily convertible securities such as compulsorily convertible debentures and/or compulsorily preference shares.”
The project will include construction of free housing for all eligible slum dwellers, along with other infrastructure development. The Maharashtra government wants the rehabilitation process to take place within the next seven years.
Outside the rehabilitation scheme, Adani's realty arm can also construct a free-sale area with a relatively high floor space index which can be sold in the open market. The timeline for the entire redevelopment is estimated to be around 17 years. At that point, the commercial value of Adani's holdings in Dharavi will be huge.
People's Prospects
So far, the common people of Dharavi have expressed various apprehensions about Adani's redevelopment project. While many are worried about the future of the thriving informal sector and wide variety of local businesses, some have also expressed concern about the loss of the diverse culture in Dharavi, once the project is completed.
Dharavi is reported to be one of the earliest settlements of the fisherfolk in Mumbai before the city started expanding rapidly in the 19th century. Since then, it has been a melting pot of various Indian and even global cultures as international tourists take a lot of interest in Dharavi. It is this multicultural setting that will be threatened by the homogenous rehabilitation structures that will gradually come up.
Ramakant Gupta, President of Dharavi Bachao Andolan, is of the opinion that the project should go ahead according to the projected timeline. “The Dharavi Rehabilitation Project (DRP) was approved in 2004, but nothing has happened so far. In 1995, there were 57,000 shanties in the slum, but the number has more than doubled now and we assume that it is around 1,20,000. We welcome the government decision, but it should be implemented in time,” he said.
Mahesh Ankush Kawle, a resident of Shastri Nagar in Dharavi, alleged that the project is being carried out for the personal gain of certain individuals and not for the welfare of the local people. There is no doubt that the cultural image of Dharavi will undergo a tremendous shift once the redevelopment project gets underway. At the same time, it remains to be seen whether the project help expand the commercial capability of the local residents or whether it will strike a death blow to the hundreds of local businesses within the soon-to-be revamped slum clusters.
(With inputs from Press Trust of India)
