The Rs22,000-crore Dharavi redevelopment project, which aims to transform India’s largest slum into a plush township, suffered a major setback on Wednesday with no developer willing to bid for it. This comes as a shock as 16 developers had participated in the pre-bid meeting hosted by the DRA.
Nirmal Kumar Deshmukh, CEO, Dharavi Redevelopment Authority (DRA), said, “We did not get any response as the real estate market is going through a slowdown.”
The Maharashtra Chamber of Housing Industry (MCHI), the apex body of developers, put the onus on the overall uncertainty prevailing in the realty market.
“Today, in this environment of uncertainty, no developer is willing to take the risk,” said Dharmesh Jain, president, MCHI.
Ironically, the first global tender for the revamp project floated in 2009 attracted 101 developers of which 19 were shortlisted. However, over a period of time, owing to the government’s indecisive stand on the project, most developers pulled out following which the state government scrapped the project. “The problem was the lack of clarity in the eligibility as well as the role of the government in implementing the scheme,” said a leading developer, who had bid the last time.
Subsequently, the government floated the current global tender on January 30, 2016, for four sectors of Dharavi — comprising 178 hectares — where developers will have to set up new infrastructure on this area apart from rehabilitating slum dwellers in new apartments.
Dharavi residents, however, blame the state government. “The government should discuss the scheme with the residents and infuse confidence among developers. Both these were not done. Hence, developers are unwilling to bid,” said Raju Kode, president, Dharavi Bachao Samitee.
What’s stopping developers
Developers bidding for the Dharavi revamp project have to deposit Rs24 crore as Earnest Money Deposit (EMD), while the winning bidder has to deposit Rs250 crore to Rs300 crore as bank guarantee deposit.
With developers facing a monetary crisis, no developer is willing to pump in such huge amounts.
According to the government, 59,165 slum dwellers will have to be rehabilitated, residents point out that the number exceeds 2 lakh.