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Slum dwellers face ruin in development blitz

The shantytowns and slums are the focus of a looming showdown, with the developers and municipal authorities seeking to raze them to the ground and replace them with plush offices, shopping malls or apartments.
Reuters | By Dominic Whiting, Mumbai
UPDATED ON JUN 08, 2008 01:17 PM IST

Prakash Kajuri is asset rich but cash poor. The Mumbai courier earns about $6 a day delivering packages in India's most populous city but his home is sitting on land worth about $2 million dollars.

Kajuri lives in Dharavi, often described as Asia's biggest slum, where around a million people cram on to what was once a mangrove swamp along railway lines leading to central Mumbai.

The slum is the focus of a looming showdown as municipal authorities and developers seek to raze it to the ground and replace it with office towers, luxury apartments and shopping malls.

Families that can prove they have lived in Dharavi since 1995 would be entitled to a free apartment in the same area, but the new dwellings would be tiny, just 225 square feet or 20 square metres, about the size of a living room. Not surprisingly, many prefer to stay where they are.

"Why should I move into such a small place with my family?" said Kajuri, a father of seven, who has lived in Dharavi for over three decades.

"If they want us to move then they should give us the same amount of living space that we now have."

The land on which his nearly 700 square feet shanty stands could be worth at least 100 million rupees in Mumbai's soaring real estate market.

"It used to be just marsh and bushes," said Girish Poojary, a guide who shows groups of curious tourists around Dharavi.

"Now builders from all over the world are coming because there's big money here. There's a domestic airport and business parks nearby, so land is very expensive."

Bids to redevelop the roughly two-square-km (0.8 sq mile) warren of brick and corrugated iron rooms into a high-rise housing and commercial complex are due to close by around mid-year.

The project is expected to take at least seven years to complete and could eventually be worth up to $10 billion in property sales.

But with local politicians haggling to secure votes in the run-up to parliamentary elections in the coming year, hopeful bidders might have to alter their projections to take into account rising animosity among residents.

The Dharavi project, split into five parts, has drawn 26 bids involving 78 Indian developers including DLF Ltd and Unitech , as well as 25 foreign firms including Lehman Brothers, Dubai World and China's Shimao Group.

Nineteen have been shortlisted.

"It takes time with these kinds of projects. It's huge," Ramesh Sanka, chief financial officer for DLF, said in a telephone interview. "But I don't think there'll be any problems, because everyone wants it to happen. Even residents want it."

Although developers are obliged to build rooms on the site for about 87,000 families registered in a 2000 census, as many as half a million people could fall through the cracks.

"A lot of people will go homeless," said Poojary, 20, who lives in another of the many slums that house half of Mumbai's more than 17-million population. "Half of the people in Dharavi rent, so they'll get nothing."

Shutting factories

Arguably the most prosperous among the world's biggest shantytowns, Dharavi has about 5,000 single-room factories and hundreds of cottage industries that together have a turnover of an estimated $1 billion.

Practically every home here produces something to sell -- incense sticks, poppadoms, pickles, soft toys and candles among the many crafts.

"Most know Dharavi as a slum where poor people live," said Abu Khalid Anjum, president of Dharavi Businessmen's Welfare Association.

"Not everyone knows how productive this place is."

The most polluting and biggest of the slum's myriad industries, leather tanneries and potteries, will also be banned, wiping out much of an economy that slum charities say is worth $1 billion a year and carries about 4,500 businesses.

Many residents believe they will have no place in a new middle-class neighbourhood, and will probably sell their new tenements. Prices have quadrupled in many areas since India eased rules on foreign investment in the property industry in 2005.

"This place will be full of rich people, it's all about money," said Shakatali Chaudhury, 49, his teeth soaked red as he chewed betel nut. "We can't even walk around in such an area," said the father of six, who earns 150 rupees a day making soap.

A maze of dark passages, where televised Bollywood musicals blend with wafts of spices, opens on to an open rubbish tip that doubles as a children's play area, and brick buildings that house communal squat toilets -- one for every 1,500 people.

Bread and butter

Behind entrances of hanging cloth, rooms the size of two double beds rent for 500-1,000 rupees per month if they are connected to electricity but the dingiest will go for 200 rupees.

The smartest part of Dharavi, the potteries that are home to the slum's first residents, lies at the end of the main shopping street and past a dusty cricket pitch swamped with children.

Women in crimson and green saris squat in doorways and pots dry in the midday sun.

Jayesh Tank, 19, said he had protested several times against plans to move the potteries outside the city.

The government should help Dharavi residents switch to gas or electric kilns, which would be less polluting than burning oily cotton cloths thrown away by car mechanics, he said.

"Redevelopment is a good idea but it's the scheme that we don't like," said Tank, an architecture student. "The government should let us keep our bread and butter."

Residents are demanding 400-sq-ft tenements, but analysts say politicians and developers will want to keep redevelopment profits fat.

Local media reported last month that authorities had increased required room sizes by a fifth to 269 sq ft and allowed developers to increase building density by a quarter.

Developers expect the project will be structured to give them an internal rate of return of 40 to 50 per cent, higher than the usual 30 per cent for projects in India, to compensate for difficulties which might arise in dealing with Dharavi residents.

"There are a lot of under-the-table exchanges," said an analyst at a Mumbai securities firm who asked not to be identified. "There's no way such a big project would see the light of day without all the political parties kept happy."

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