Adani Group to redevelop Mumbai’s Dharavi slums; Govt gives the nod
After a delay of over two decades, the redevelopment project will be commencing after issuance of the letter of intent.
The Maharashtra government has approved the Adani group’s proposal to redevelop Mumbai’s 590-acre Dharavi slums. Eight months after the conglomerate was declared as the highest bidder for redevelopment of Asia’s biggest slums. DLF Ltd and Shri Naman Developers Pvt Ltd were the other contenders for the project. The Dharavi Redevelopment Project will issue the letter of intent for the commencement of the work. The project requires an investment of at least $3 billion.
The notification is the first of several permissions needed for the project to move forward with slum redevelopment. It follows a period of intense political turmoil in Maharashtra, where Nationalist Congress Party (NCP) leader Ajit Pawar entered the state administration as deputy chief minister and finance minister. Adani, however, might obtain the last project approvals in a month.
The government’s letter said, “Government’s decision: As the main partner for the implementation of Dharavi Redevelopment Project under Dharavi Notified Area, the maximum bidder is (mainly) Adani Properties Pvt. Ltd. The tender of ₹5,069 crore is being approved for the appointment.”
If the government’s most recent decision is implemented, the Adani group, which also manages the city’s airport, will be hired to convert the slum into flats, offices, and malls after numerous prior failed attempts by various administrators. The housing department also gave out a letter of acceptance for setting up the special purpose vehicle (SPV) model for the redevelopment project. Before the SPV can be formed, it requires more approvals from urban development department and city’s municipal authorities.
The SPV will have a $500 billion corpus, with Adani Properties owning the remaining 40% of the firm for an investment of $400 billion and the Maharashtra government owning 20% of the company for an investment of $100 billion. The appointed chief executive officer and special task officer for the project are being authorized to decide on “immediate initiation of internal implementation”.
After the government decides the qualified owners in the slum and the total potential built-up area for redevelopment, the state and the Adani group have come to an agreement on the terms and conditions for the transfer of development rights certificates for the Dharavi redevelopment project. After the government signs a letter of intent and a subsequent letter of allotment following the formation of the SPV between the Adani group and the Maharashtra government, the groundwork for the Dharavi redevelopment can begin.
“Following the creation of the SPV, the state government will conduct a survey to confirm the identities of all the potential eligible owners who would be allotted residential flats across the 590 acres area after the redevelopment of the slum”, said an official. In a recent letter, the government gave its approval for the construction of houses that will be given to eligible Dharavi inhabitants on a rental basis on acceptable land in the Mumbai metropolitan area, provided that the land is within 10 km of the slum.
