Slump in realty market may hit Dharavi makeover | india | Hindustan Times
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Slump in realty market may hit Dharavi makeover

india Updated: Feb 11, 2009 22:00 IST
Gigil Varghese

The slump in the real estate market may hit the Dharavi makeover plan hard.

The Dharavi Redevelopment Authorities’ (DRA) had invited 19 developers, who had bid for the ambitious Rs 15,000-crore project to redevelop Asia biggest slum into a township, to present their plans from Tuesday.

Of the 19, three top builders have neither submitted their plans nor responded.

“Mukesh Ambani’s Reliance Engineering Associates, Godrej and Larsen and Tourbo consortium, and the Canada-based Potential Group have not responded to the call to present their plans,” said an officer, who did not wish to be named.

L&T spokesperson refused to comment, but sources close to the project said that the consortium had not participated in the financial bids and had opted out of the project.

Reliance Engineering and Potential Developers did not respond to e-mail queries by Hindustan Times.

Speaking on condition of anonymity, one of the bidders said the cash crunch in the real estate market had affected their plans to raise money for any project.

Most of the firms had planned to raise money either by borrowing or through equity. But the collapse of leading US financial institutions has caused credit in global financial markets to dry up.

The state’s grand plan to metamorphosise Dharavi, Asia’s biggest slum, into a township — complete with a golf course, jogging track, education and medical centres —

“Emmar MGF Land and DB Realty submitted their plans on the first day. I don’t know about builders pulling out and do not want to comment on it,” said Gautam Chatterjee, officer on special duty for the Dharavi Redevelopment Project.
Hindustan Times had earlier reported that the builders had requested the government to reduce the earnest money and deposit as stipulated in the financial bid condition.

Chatterjee had said that it was in view of the prevailing financial market conditions that the government had not asked any of the developers to submit the financial bid upfront.

Also, the DRA has written to Housing Development and Infrastructure Ltd (HDIL) asking whether they would qualify considering that Lehman Brothers, their financial partner, is bankrupt after recession hit the US. “They have not responded either,” said an officer from the DRA.

Meanwhile, two other bidders, Akruti City and DLF have now formed a consortium. Vimal Shah of Akruti said: “We will present our plans but what will ultimately happen is a business secret and cannot be revealed.”
gigil.varghese@hindustantimes.com

The project

The state government’s grand plan to metamorphosise Dharavi, Asia’s biggest slum, into a township — complete with a golf course, jogging track, education and medical centres — has been marooned by the global meltdown, which has severely hit builders who are reeling under a liquidity crunch.

The DRA had invited 19 developers, who had bid for the makeover project, to submit the master plan for each sector they are interested from February 10.

Of the 19, Mukesh Ambani’s Reliance Engineering Associates, Godrej and Larsen and Tourbo consortium, and the Canada-based Potential Group have neither submitted their plans nor responded.

Two other bidders, Akruti City and DLF, have now formed a consortium.