It is an endless march to take over and grow infrastructure projects by the Adani Group. However, the latest in Gautam Adani’s bag – the redevelopment of Dharavi, possibly the World’s most dense and largest slum layout – may be a tough nut to crack.
The Adani group’s bid of Rs 5,069 crore bagged the project ahead of Delhi builders DLF that had bid Rs 2,025 crore. Another Mumbai group, Naman, was disqualified in the technical round. The fact that eight developers had attended the pre-bid meetings, but only three finally entered the race indicates how tough the project is.
The redevelopment of Dharavi has always been a challenge as it is a complex slum township that houses not only 68,000 families in semi-legal tenements, but also a labyrinth of cottage and home industries including pottery, leather works, pappad-manufacture and packaging units. Located in the heart of Mumbai’s island city amid a crisscross of nullahs, Dharavi is seen as an ‘eyesore’ and has been the focus of attempts since 1971 to rebuild it along normal town-planning norms.
A gold mine?
On the face of it, the Adani Group seems to have bagged a gold mine. The project covers 540 acres or nearly 2.5 square kilometers (kms) and has been accorded special development rights of 4.0 FSI (ie. the built up area allowed is 4X of ground area). It is also cheek-by-jowl to Mumbai’s fancy steel and glass commercial district – the Bandra Kurla Complex (BKC). The recent addition of an adjoining 117 acre of Railway land, that is now a part of the project, is a new sweetener.
Dharavi’s redevelopment will follow the same ‘cross-subsidy’ model that has driven slum rehabilitation in Mumbai for decades. The existing families and businesses will be rehabilitated in planned layouts at the developer’s expense. The surplus land after the ‘restructuring’ will be developed and sold to finance the project and give a profit margin to the developer. The Adanis will thus spend Rs 25,000 crore on rehab, which will include necessary civic amenities like water, power, roads and other infrastructure.
On what will accrue to the Adani Group, there are insane projections floating about. One of them this writer has seen envisages 50 million square feet being used for rehabilitation of local residents, and about 40 million sq ft being released for sale as commercial realty. At a rate of Rs 50,000 per sq ft reigning in the area, the developers are expected to generate sales of Rs 2 lakh crore!
This could be so much jiggery-pokery! As a real estate reporter, this writer has been witness to multiple attempts and commercial bids by the state government over two decades to bring Dharavi in the development net. All have failed so far!
It started with the Maharashtra government in 1975 launching the Slum Improvement Programme to provide basic amenities. Again in 1985, the World Bank part-funded a slum upgradation programme (SUP). Both failed. Then followed a change of gear and the state government decided to redevelop Dharavi as an integrated planned township through private developers using the ‘cross-subsidy’ route. A February 2004 Government Resolution(GR) notified 440 acres (178 ha) for commercial development and Dharavi was sent to the market with 3-4 rounds of commercial bids.
The first proposal was by an architect, Mukesh Mehta, of MM Consultants, who proposed development in 12 sectors carving out separate 7-story buildings with 225 sq ft flats for residences and industrial parks for manufacturing units. There were protests by the Dharavi Bachao Samiti (DBS), and a modified plan in 2008 then offered mezzanine floor in buildings for cottage industries like pappad.
Dharavi has since seen three rounds of bidding for which many foreign cartels too entered the race. But nothing moved on the ground. The last round was in 2019 when the Dubai-based Seclink Technology Corporation (STC) won the project with a bid of Rs 7,200 crore. AdaniInfrastructure was worsted then witha lower bid of Rs 4,529 crore.For some reason, a Committee of Secretaries (CoS) failed to award the project; and the Dubai company has been holding out threats and claims for compensation.
The human challenge
The challenge of Dharavi is it is not a greenfield project where the rules of the real estate market can be applied blindly. It is ‘brownfield’ layout with old and well-settled residences and bustling entrepreneurship rubbing shoulders with each other.
This writer has seen generations of potters still turning their wheels in Dharavi’s ‘Kumbhar Wada’. Can these potters work in multi-story industrial estates? The same question faces the hundreds of taxi garages, and the leather units.
Dharavi is an agglomeration of locals as well as several waves of migrant communities. If the project promoters don’t take the myriad human needs and nuances into account, there will be resistance from below. In which case, are the Adanis going to tread the road of the bulldozer?
It is for the same reason the top down approach of Maharashtra’s Slum Rehabilitation Scheme, set up by Bal Thackeray in 1997 to give pucca homes to 40 lakh slum dwellers has been a miserable failure. Over 24 years, it has generated 2,067 projects with just 223,000 tenements. Unless there is some new thinking, Dharavi will go the same way.