No takers for Abhyudaya Nagar redevelopment bid

According to real estate developers, the lack of response is due to the high compensation to be given to the colony’s existing residents, which makes the project unattractive

Mumbai: The residents of Abhyudaya Nagar are in for another round of disappointment. There are no takers to revamp the prime 33-acre locality at Kalachowki despite the Maharashtra government pushing for the project to be executed through the much-talked-about cluster redevelopment.

Mumbai, India - September 23, 2016: Aerial View of Abhyudaya Nagar in Mumbai, India, on Friday, Sept 23, 2016. (Photo by Bhushan Koyande/HT)

“We have not received any bid,” said an official from the Maharashtra Housing and Area Development Authority (Mhada), which was put in charge of appointing a construction and development agency to spearhead the redevelopment project. “As a result, for now, we have decided to cancel the ongoing process. Over the next few days, we will take a call on re-tendering.”

According to real estate developers, the lack of response is due to the high compensation to be given to the colony’s existing residents, which makes the project unattractive.

“The commitment towards providing compensation, including thrice the carpet area, makes the entire project unviable,” said a real estate developer who requested anonymity. “While the area is strategically placed, the existing set of project criteria is unattractive.”

Another builder shared that the stakes are too high to take the plunge. “The initial capital expenditure required is around ₹1,500 crore to ₹1,800 crore. This does not include subsequent construction cost and a 10% hike in rent every year. About ₹1,500 crore will have to be paid to different government agencies towards premium and other charges to secure permissions and initiate construction. Approximately another ₹120 crore to ₹150 crore will have to be disbursed towards the first year’s rental and shifting costs.”

Developed by Mhada in the 1960s to house industrial workers on a tenancy basis, Abhyudaya Nagar is a residential colony with 48 buildings. It comprises around 3,410 eligible tenements, of which 3,335 are residential and 75 commercial. After 1985, the ownership of the tenements was transferred to the tenants to form cooperative housing societies. There are also slum settlements within the colony that are also to be rehabilitated.

There were three previous attempts to redevelop Abhyudaya Nagar, in 2006, 2007 and 2014, when developers had directly reached out to the residents. Then, in March last year, the Maharashtra government approved the cluster redevelopment of the colony and put Mhada in charge.

In October 2024, weeks before the Maharashtra assembly elections, Mhada floated a bid to revamp the more than six-decade-old colony, with a deadline of November 21. Thereafter, a lack of response resulted in repeated deadline extensions, before Mhada eventually decided to cancel the tender.

Mhada officials said that if the conditions stated in the bid document have to be amended to garner a response, that will require clearance from the state housing ministry. Otherwise, the second call on redevelopment will be floated with the same terms and conditions.

According to the existing tender, the winning developer will receive 55% of the housing stock for sale in the open market. The remaining 45% will comprise rehabilitation homes and Mhada’s share of units, which will be sold through a housing lottery at a later stage.

Residents of 3,283 homes with a carpet area of 208 sq ft were due to receive units measuring a minimum of 635 sq ft under the existing tender. Residents of 36 tenements measuring 192 sq ft would get 622 sq ft homes. Those living in eight homes currently measuring 486 sq ft would get 1,199 sq ft units, while those in eight 315 sq ft units would get 777 sq ft homes. Each of the 3,335 tenements would also get a parking space.

Each family would be paid ₹50,000 as part of the shifting cost, in addition to the alternative accommodation rent of ₹20,000 per month, with a 10% annual hike, according to the tender.

In the case of commercial units, 67 owners with units of 208 sq ft carpet area would get 355 sq ft units, and the remaining eight measuring 1,503 sq ft would get 2,555 sq ft. A corpus fund of ₹5 lakh would also be provided to residential and commercial space owners.