To fast-track the long-pending development of Dharavi, the Maharashtra Cabinet has approved the establishment of a special purpose vehicle (SPV) and decided to invite global tenders for the project.
The SPV will have 80 per cent stake of the developer with the remaining under the government’s ownership.
The SPV is expected to make a master plan for Dharavi as well as execute the project. Elaborating on the same, SVR Srinivas, Chief Executive, Dharavi Redevelopment Project Authority (DRPA), says, “The SPV will be formed once the bid is finalised and it will be along with the government. Commencing a JV, the government and private companies will have an SPV, where the government will also be on the board of directors.”
Spread over 200 hectare, as many as 1,000 residents of Dharavi are eligible for a new house after redevelopment. The project to redevelop Asia’s largest slum was conceived in 2003 but failed to see the light of the day. Ever since, the project has been a topic of discussion. Although previous efforts to get developers on board have been unsuccessful (twice), the government aims to be an active participant and stakeholder in the proposed SPV. Calling the project a high-risk one, Srinivas adds, “The project requires huge investment, for which investors should be made comfortable. Also, there should be policy stability. Both were missing last time because it was left to developers and the project was more developer-driven. However, this time, there is a SPV where the government is a partner. With this, more investments are likely to come in, bringing in a fundamental shift.” He further assured policy stability.
At an expected cost of Rs 220 billion, the entire area is reportedly set for redevelopment with over 1 lakh structures to be constructed in seven years. As reported, the railways has agreed to give up 90 acre of its land in Matunga and Dadar for the project.
According to the previous plans, the slum was expected to be developed into five sectors. In 2012, the government had given the project to the Maharashtra Housing Area Development Authority (MHADA). However, as reported, there was not much progress since then, until the recently organised pre-bid meeting.
The pre-bid meeting, conducted by Dharavi Redevelopment Project that falls under the Slum Rehabilitation Authority, managed to gain considerable interest among realty developers and major contractors as around 20 entities and their JV partners reportedly attended the meet. The project will be awarded to the entity that bids above the base price of Rs 31.5 billion.