Dharavi Slum Redevelopment : Shinde Govt Floats Global Tender For Rs 20,000 crore Project

The Maharashtra government on October 1 floated a fresh global tender for the redevelopment of Asia's biggest slum Dharavi spread over 240 heactres of prime land in the heart of the country's commercial capital Mumbai.

The state government has invited experienced and qualified bidders from India and abroad to bid for the integrated redevelopment of Dharavi through the international competitive bidding method.

The slum redevelopment project which be undertaken by a joint venture in which the selected developer is expected to hold 80% equity, (estimated to be Rs 400 crore while the state government will hold 20% with Rs 100 crore equity capital).

Apart from the equity of Rs 400 crore, any investment required for the project shall be brought by the lead partner in the form of instruments such as Compulsorily Convertible Debentures and/or Compulsorily Convertible Preference Shares, the state government has mandated.

The state government has so far notified about 240 hectares forthe Dharavi slum redevelopment

The state government will complete the bidding process by the end of the year and the chosen developer will get seven years to see the work through, including the rehabilitation of more than 56,000 families.

The state government has also approved floor space index (FSI) of four and additional fungible FSI available as per the prevailing development control regulations (DCR) for rehabilitation, renewal component and free sale built up area in the open market.

A pre-bid meeting will be held on October 11 and the last date for submission of the bid is October 31, 2022.

The project is estimated to cost Rs 20,000 crores.

Originally mooted in 1999 by the first BJP-Sena coalition government, the proposed slum redevelopment project has languished for decades due to various challenges. In 2004, the then chief minister Vilasrao Deshmukh announced the Dharavi revamp project, which he claimed, would transform the lives of residents by shifting them from the slum to plush apartments. However, his government struggled to operationalise the plan announced with much fanfare.

In 2012, the then Congress-NCP government handed over the responsibility to redevelop Sector 5 of the slum cluster to the Maharashtra Housing Area Development Authority (MHADA). However, there was not much progress after the announcement.

The project received fresh impetus in Oct 2018 when the BJP-Shiv Sena government led by then Chief Minister Devendra Fadnavis approved the setting up of a Special Purpose Vehicle (SPV). The SPV was envisaged to be formed with the developer holding an 80 per cent equity stake and the government owning the remaining stake.

In Nov 2018, the BJP-Shiv Sena government invited global tenders to redevelop Dharavi, one of the largest slums in Asia, into an integrated township as part of the Rs 22,000 crore project.

Unlike the phased approach envisaged in earlier attempts to get the project off the ground, the 2018 plan permitted the whole area to be considered for redevelopment. The expected cost of rehabilitation was estimated at Rs 22,000 crore, and over one lakh structures were planned to be constructed in seven years. The state government also persuaded the Railways to give up 90 acres of land in Matunga and Dadar for the project.

Under the 2018 plan, 70,000 residential and 30,000 commercial or industrial establishments were proposed to be constructed in Dharavi over seven years. It was also proposed that the tenants who have existing structures of 300 sq. ft will get flats with 350 sq. ft carpet area, while those in slums with 350 sq. ft but less than 500 sq. ft will get flats of 400 sq. ft carpet area after redevelopment; likewise, those living in slums in a 500 sq. ft area, will get flats of the equivalent area; and the latter will also be offered an additional 35 per cent fungible Floor Space Index (FSI).

In late 2019, Sealink, a United Arab Emirates-based firm, was selected as the developer for the redevelopment. However, the regime change in Maharashtra after the split between pre-poll allies BJP and Shiv Sena delayed the project further.

In Oct 2020, the Uddhav Thackrey-led Maharashtra Vikas Aghadi (MVA) government cancelled the tender and said new tenders would be floated soon. The MVA government claimed that one of the reasons for calling off the tender was the delay by the Centre in transferring the railway land, which was critical for the project.

With the ouster of the MVA government and Shinde-Fadnavis in the saddle, the project has gained momentum again.