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Govt’s final nod to Adani Properties for Dharavi project

BySaurabha Kulshreshtha
Jul 15, 2023 12:56 AM IST

. As an equity partner of the project, spread over 240.35 hectares, the state government has allocated ₹100 crore from its kitty, while Adani group will spend ₹400 crore as the project’s chief partner

Mumbai: Breaking a six-and-a-half-month deadlock after the state cabinet had approved Adani Properties’ bid for the Dharavi Redevelopment Project (DRP), on Thursday the government gave its nod to the group to form a special purpose vehicle (SPV) to kick-start the project. As an equity partner of the project, spread over 240.35 hectares, the state government has allocated 100 crore from its kitty, while Adani group will spend 400 crore as the project’s chief partner.

Mumbai, India - July 9, 2020: A general view of Dharavi, a COVID-19 hotspot in Mumbai, India, on Thursday, July 9, 2020. (Photo by Satyabrata Tripathy/Hindustan Times) (Satyabrata Tripathy/HT Photo)
Mumbai, India - July 9, 2020: A general view of Dharavi, a COVID-19 hotspot in Mumbai, India, on Thursday, July 9, 2020. (Photo by Satyabrata Tripathy/Hindustan Times) (Satyabrata Tripathy/HT Photo)

Incidentally, the order was issued on the last day deputy chief minister Devendra Fadnavis helmed the housing department – the portfolio was passed on to his colleague Atul Save, after Thursday’s reshuffle.

Maharashtra cabinet awarded the DRP bid to Adani Properties in December 2022. Despite a pending case in the Bombay high court on the project, the cabinet decided to go ahead, as HC had not ordered a stay. Bids for the DRP were opened in November, and Adani Properties with a bid of 5,069 crore, was declared the winner. The DLF group, another frontrunner, had submitted a bid of 2,025 crore. Significantly, no other company was eligible for the final bid.

According to the government order, the SPV of Adani will now have to pay 25% of ready reckoner price (as on the last day of bid submission) as premium of land to DRP or Slum Rehabilitation Authority. It is mandatory to pay the 70% of this premium received to the land owners such as Brihanmumbai Municipal Corporation (BMC) and other institutions. After this, the civic body will issue a no objection certificate. “As DRP is an essential project the urban development department will ask the BMC to issue the NOC immediately,” stated the government order.

The order also stated that if SPV does not get land to implement the rental housing within 10 km of project site SPV and DRP is allowed to look for suitable land in MMR region.

“This is the first order in DRP to give go-ahead for the project. There are some other issues related to TDR; some more orders in this regard are expected in future,” said an official.

The Dharavi backstory

Dharavi’s history dates back to the 1700s when it was an uninhabitable marsh at the edge of the island city and the Bombay gazetteer mentions six great koliwadas of Dharavi. By 1737, the Kala Killa came into being as part of the Bombay Castle fortification and sentries were posted at this fortification to guard the northernmost end of the island city. Around the same time, potters arrived here to set up business from Saurashtra and Kutch, Gujarat, and Muslim master tanners from Tamil Nadu to start the leather tanneries. The artisans and embroidery workers came from Uttar Pradesh, and the Tamilian community set up their sweets and savouries businesses.

Decades since then, Dharavi came to be regarded as Asia’s largest slum – celebrated in literature (‘Poor Little Rich Slum’, co-authored by Rashmi Bansal documenting success stories and entrepreneurial spirit of the residents) and cinema (Sudhir Mishra’s ‘Dharavi’ and Zoya Akhtar’s ‘Gully Boy’).

DRP fact-file

After a stalled attempt in 2018-19, the Shinde-Fadnavis government floated a global tender in October 2022 for the 240-hectare redevelopment project. The base price for the bidding was 1,600 crore.

Bids for the Dharavi Redevelopment Project (DRP) were opened at the end of November, and the Adani group, with a bid of 5,069 crore, was declared the winner.

When Adani’s bid came up for approval before the state cabinet in the last week of December 2022, officials and ministers discussed the issue of the pending court case regarding the project.

In 2018-19, the Dubai-based Seclink group had emerged as the highest bidder with a bid of 7,200 crore. The Adani group lost to Seclink, as it had bid 4,500 crore. However, the bidding process was later cancelled, following which the Seclink group filed a case in the Bombay high court, challenging the government’s decision.

The redevelopment of Dharavi is an ambitious project for the state government, which will take about 15 years to complete. The Shinde-Fadnavis government wants to kickstart the project so that work on it can commence before the 2024 general election.

The redevelopment project proposes that the developer acquire 25.62 hectares of private land. This project will be executed by a Special Purpose Vehicle formed by the developer. Apart from an FSI of 4 and Transferable Development Rights, the project has many other benefits.

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