Opportunities abound in redevelopment and rehabilitation projects, says Nitin Madkaikar, FIRST Infocentre.
Redevelopment, rehabilitation and upgradation projects are those that involve any new construction or reconstruction on a site with a pre-existing structure such as an industrial site, residential building, commercial complex or mixed-use structure. The projects may be small or large, ranging from a single building to entire new neighbourhoods or ‘town-in-town’ projects. These projects can also lead to the use of land to construct private shopping malls, office buildings, factories, schools and educational institutes.
As of mid-March 2011, there were 165 proposals to expand, redevelop, rehabilitate, renovate or upgrade existing structures across India, entailing a total expenditure of Rs 20,000 crore. These are projects on which information is available in the public domain. They span car parks, commercial complexes, community buildings, hospitals, housing units, offices, government quarters, schools/colleges, slums and big and small townships. Nevertheless, the cost on over 60 projects could not be ascertained.
Project proposals by structure
The total value of construction output in 2010-11 is estimated at Rs 15,562 billion, including Rs 12,636 billion worth of new construction and Rs 2,925 billion of repairs and maintenance. Thus, the spending proposals on 165 projects work out to 1.5 per cent and over 15 per cent of the annual total revenues of the top 50 construction companies. In both comparisons, this segment assumes importance owing to its increasing share in the construction business.
Structure-wise, slum rehabilitation and redevelopment accounts for more than half of the expenditure on the 165 proposals. This is followed by hospitals, which are mostly upgraded and modernised. Housing, accounting for over 10 per cent of the expenditure, has the highest number of projects.
Major slum redevelopment projects
Under the header of slum redevelopment and rehabilitation, Maharashtra has the highest number of proposals (eight) costing Rs 10,300 crore. Of these, five are under execution, while three are under consideration. The five projects comprise the rehabilitation of slums in Pimpri-Chinchwad, Pune city slum rehabilitation, Nagpur city slum rehabilitation, Khartan slum rehabilitation and Worli slum rehabilitation projects. The three other under consideration are in Mumbai, including the Dharavi slum redevelopment, rehabilitation of a slum in Malad and the Mumbai International Airport slum rehabilitation project.
The Dharavi slum redevelopment project entails an expenditure of Rs 9,300 crore spread over 42 acre. Of the total land, 61 per cent is owned by the municipal corporation, 25 per cent is privately held and 8 per cent belongs to the state government, while 6 per cent is owned by the Central Government. The scheme involves construction of 71,000 housing units in the 12 sectors of the slum. The redevelopment plan also includes 15 per cent green spaces, 60 ft arterial roads, 40 ft secondary roads and 20 ft tertiary roads. Recently, the state government announced that it would take up the development of one of the five sectors of Dharavi within seven months through the Maharashtra Housing and Area Development Authority (MHADA), while it was undecided on the remaining four sectors.
The other largest project involves slum rehabilitation at Pimpri-Chinchwad in Pune under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The project is targeted for completion in 2011. The Pimpri-Chinchwad Municipal Corporation began work on the Rs 592 crore project in February 2008.
Rebuilding housing and townships
About 75 projects entailing Rs 3,000 crore are under various stages of implementation (amount excludes cost of projects not available). Of these, 28 projects are under construction (costing Rs 850 crore), while another 37 projects (costing Rs 1,300 crore) are under consideration. About 12 projects, each costing over Rs 50 crore, are being implemented in Maharashtra, Delhi and Madhya Pradesh. In all, Maharashtra has 55 projects alone. Four projects costing Rs 200 crore are in Delhi, while Tamil Nadu has nine projects entailing a total cost of more than Rs 50 crore.