Dharavi Slum Redevelopment Project Back On Track, Shinde-Fadnavis Government To Float Global Tender In 2-3 Weeks

The Maharashtra cabinet headed by Chief Minister Eknath Shinde announced on Wednesday (Sep 21) that it would invite fresh global bids for the Dharavi Redevelopment Project (DPR) and offer additional benefits for the ambitious urban renewal project that seeks to transform the sprawling slum, spread over 2.8 sq. km, to an integrated commercial cum residential township.

The new global tenders for Dharavi redevelopment will be invited in the next two-three weeks. The government will also offer fresh concessions to the selected developers considering the overall slowdown in the market compounded by the COVID-19 pandemic.

“Considering the situation arising out of the Covid-19 pandemic and overall slowdown in the global market, the terms and conditions of the tender will be revised, and a 45-acre plot of the railways will be made part of the project,” noted a press release issued by chief minister’s office on Wednesday.

Under the new plan approved by the cabinet, the state proposes to give free houses to around 60,000 families and rehabilitate 12,976 commercial units set up in Dharavi until 2000. The state government has also announced that it will waive stamp duty on the development agreement and development rights to be signed between SPV and Dharavi redevelopment project or slum redevelopment authority (SRA).

This decision by the cabinet for the Dharavi Redevelopment Project (DPR) also entails forming a Special Purpose Vehicle (SPV). The new plans also incorporate the terms and conditions the Rail Land Development Authority.

The redevelopment of Dharavi, one of the biggest slums in Asia, throws open over 600 acres of prime land, but the project has met with hurdles over the last two decades. The 535-acre redevelopment project proposes to convert the slums into blocks of residential and commercial high-rises.

Originally mooted in 1999 by the first BJP-Sena coalition government, the proposed slum redevelopment project has languished for decades due to various challenges. In 2004, the then chief minister Vilasrao Deshmukh announced the Dharavi revamp project, which he claimed, would transform the lives of residents by shifting them from the slum to plush apartments. However, his government struggled to operationalise the plan announced with much fanfare.

In 2012, the then Congress-NCP government handed over the responsibility to redevelop Sector 5 of the slum cluster to the Maharashtra Housing Area Development Authority (MHADA). However, there was not much progress after the announcement.

The project received fresh impetus in Oct 2018 when the BJP-Shiv Sena government led by then Chief Minister Devendra Fadnavis approved the setting up of a Special Purpose Vehicle (SPV). The SPV was envisaged to be formed with the developer holding an 80 per cent equity stake and the government owning the remaining stake.

In Nov 2018, the BJP-Shiv Sena government invited global tenders to redevelop Dharavi, one of the largest slums in Asia, into an integrated township as part of the Rs 22,000 crore project.

Unlike the phased approach envisaged in earlier attempts to get the project off the ground, the 2018 plan permitted the whole area to be considered for redevelopment. The expected cost of rehabilitation was estimated at Rs 22,000 crore, and over one lakh structures were planned to be constructed in seven years. The state government also persuaded the Railways to give up 90 acres of land in Matunga and Dadar for the project.

Under the 2018 plan, 70,000 residential and 30,000 commercial or industrial establishments were proposed to be constructed in Dharavi over seven years. It was also proposed that the tenants who have existing structures of 300 sq. ft will get flats with 350 sq. ft carpet area, while those in slums with 350 sq. ft but less than 500 sq. ft will get flats of 400 sq. ft carpet area after redevelopment; likewise, those living in slums in a 500 sq. ft area, will get flats of the equivalent area; and the latter will also be offered an additional 35 per cent fungible Floor Space Index (FSI).

In late 2019, Sealink, a United Arab Emirates-based firm, was selected as the developer for the redevelopment. However, the regime change in Maharashtra after the split between pre-poll allies BJP and Shiv Sena delayed the project further.

In Oct 2020, the Uddhav Thackrey-led Maharashtra Vikas Aghadi (MVA) government cancelled the tender and said new tenders would be floated soon. The MVA government claimed that one of the reasons for calling off the tender was the delay by the Centre in transferring the railway land, which was critical for the project.

With the ouster of the MVA government and Shinde-Fadnavis in the saddle, the project has gained momentum again.