The construction work for the redevelopment of Dharavi, one of the largest slum clusters in Asia, is likely to start in October 2023, said SVR Srinivas, Chief Executive Officer (CEO) of Dharavi Redevelopment Project (DRP).
Srinivas said the Adani Group, which has won the bid, will be issued a letter of intent (LoI) in the next few days after which signing of a memorandum of understanding (MoU) will be done. The slum cluster proposed for redevelopment sprawls over 240 acres and is home to about a million people.
In November 2022, the Adani Group was declared the winner for the project. The Group had won the bid by promising an initial investment of Rs 5,069 crore for the over Rs 20,000-crore project.
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. While Adani Realty quoted Rs 5,069 crore as the initial investment, DLF had quoted Rs 2,025 crore. The Naman Group was disqualified since it did not meet the technical criteria.Also Read: Adani wins Dharavi redevelopment project — what next?
Sharing the timeline with Moneycontrol, Srinivas said: “The Maharashtra cabinet has approved the Adani Group's bid for Dharavi redevelopment. Once the government issues us a letter, we will issue the LoI to the Adani Group. From here, all the paperwork will start. The LoI will be followed by signing an MoU with Adani Group."
"After this, a special purpose vehicle (SPV) will be formed. The SPV will have stakeholders from the Adani Group and the state government. With the formation of the SPV, we will also have to invest Rs 500 equity, of which Rs 100 crore will be given by the state and the remaining Rs 400 crore by the winning bidder."
What is an SPV?
Unlike the previous tenders floated by the Maharashtra government, the current tender document mandates an SPV, which will have Maharashtra government officials as directors, along with experts and representatives of the lead partner which has won the bid.
The SPV will prepare a master plan for the redevelopment and rehabilitation project.
The Maharashtra government plans 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.
When will actual work start?
“Once the SPV is formed by March or April 2023, the shifting can start. However, there are court orders to not shift slum-dwellers during the monsoon. Hence, we will have to wait until the monsoon is over. Once the paperwork is completed, a master plan will be prepared. After its approval, the commencement certificate (CC) will be issued to start the actual construction work, after monsoon, in October 2023,” added Srinivas.
He said that the rehabilitation deadline will be for seven years after the CC is issued.
The major challenge for the authorities and the winning bidder will be to carry out a survey of the number of legit tenements in Dharavi, which is also known as annexure-2 for slum rehabilitation projects in Maharashtra.
Quantum of construction over the next 17 years
According to officials, in the next 17 years, over 1 crore square feet will be constructed at a cost of over Rs 20,000 crore. Of this, 20-30 lakh square feet is meant for sale in the open market, while the rest is for rehabilitation of the slum-dwellers.
Dharavi's informal economy
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-19, with more than 9,000 cases and over 100 deaths reported.Also Read: Dharavi Redevelopment Plan: Existing industrial units to get more space, tax sops, common facility centre, says Maha Dy CM