Almost two decades after it was first proposed, the Dharavi redevelopment project in Mumbai is close to taking off, finally. The makeover of Asia’s biggest slum cluster will be done by Adani Realty, the real estate wing of Adani Group.
The group quoted the highest amount of Rs 5,069 crore for the initial investment in the Rs 20,000 crore project, followed by Rs 2,025 crore of the DLF Group. The government’s stipulated minimum investment was Rs 1,600 crore.
According to the bid criteria, the company will have to form a special purpose vehicle (SPV). Thereafter, 20% of this initial investment will have to be submitted before signing the development agreement and an additional 20% on submitting an integrated master plan.
Dharavi stands on a slice 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.
Spread over 2.8 km, the slum sprawl is home to small businesses which employ over 100,000 people. The state had envisaged this sprawl be transformed into a cluster of high-rises with improved urban infrastructure. It entailed resettling 68,000 people, including slum dwellers and those with commercial establishments.
SVR Srinivas, chief executive officer of the Dharavi Redevelopment Project, said, 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 redevelopment project in 17 years and the rehabilitation exercise in the next seven years.
In terms of process, the bid will now move to the state government’s committee of secretaries that will discuss the proposal. The government has already announced a floor space index (FSI) of 4 for the redevelopment along with several concessions in the form of a premium paid by the developer, inspection charges, Goods and Service Tax etc.
The notification issued by the state government’s housing department in October had said the bidding company or lead member of the consortium shall have a minimum consolidated net worth of Rs 20,000 crore as per the latest balance sheet and such balance sheet shall not be earlier than March 31, 2022.
Though eight companies, including firms from South Korea and UAE had attended the pre-bid meeting on October 11, only three bids were received on Tuesday, the last day of submission.
This is the second attempt by the Adani Group for the project. It had, in 2018, put in a bid of Rs 4,529 crore but Dubai-based Seclink Technology Corporation had emerged as the highest bidder at Rs 7,200 crore. The bid process was later cancelled by the erstwhile Maha Vikas Aghadi government as transfer of railway land became a bone of contention between the Centre 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 decks for inviting fresh tenders for the project.
Adani Group’s real estate arm Adani Realty is nearly 12-years-old and is aggressively expanding its footprint in Mumbai. It started with an integrated township of Shantivan in Ahmedabad in 2010, made its foray into Gurugram with Oyster Grande in 2012, and into Mumbai in 2014 with Western Heights project in Andheri. It currently has five under-construction projects in Ahmedabad, two in Jagatpur, three in Gurugram, and one in Pune.