Dharavi project: State likely to hand over four sectors to private developers

New proposal for Dharavi Redevelopment Project is ready and government intends to inviting bids from private builders.

Written by Shalini Nair | Mumbai | Published: May 31, 2014 3:24 am

After handing over redevelopment of Sector 5 of the two sq km Dharavi slum to the Maharashtra Housing and Area Development Authority (MHADA) in the run-up to the Assembly elections later this year, the state government is expected to hand over the four other sectors to private developers.

“The new proposal for Dharavi Redevelopment Project (DRP) is now ready. I have signed it but a final decision lies with the chief minister. We intend to decide on inviting bids from private builders for the four other sectors in a month’s time,” said Sachin Ahir, Minister of State for Housing.

He added that the DRP cell of the Slum Rehabilitation Authority has been given a greater and a more independent role in planning the project, including in matters relating to land acquisition.

The DRP expects the committee of secretaries and, subsequently, CM Prithviraj Chavan to take a call on whether the developers, who will be awarded the project, should be charged a premium amount or housing stock or a mix of both. The tender documents prepared by Ernst & Young, the bid management consultant for the project, will be tweaked once the decision is taken on the issue.

According to DRP cell’s estimates, the cost that will be incurred by the builders for rehabilitation for the four sectors is approximately Rs 16,000 crore. The estimated cost, as per previous plans for all five sectors, was Rs 15,000 crore.

Houses for 9,600 residents of Sector 5 are being constructed by MHADA, which is also generating a huge public housing stock in the process, owing to the incentive floor space index available for redevelopment.

A total of the 50,000-odd families live in the remaining four sectors, which have been divided into 13 sub-sectors. Sectors 1, 2 and 4 have been split into three parts each while Sector 3 has been carved out into four sub-sectors.

“In meetings held so far, the CM has expressed his reservations with regards to handing over a huge chunk of the redevelopment pie to any particular developer. This is why tenders might be called for the smaller sub-sectors. Also, the CM is keen on taking housing stock as against charging a premium, which is the preferred option by developers,” said a state government official.

Debashish Chakravaty, Principal Secretary for Housing, said that since MHADA is already handling one sector, the department has examined the possibility of whether the project could be executed by other government agencies dealing with urban planning or affordable housing such as the Mumbai Metropolitan Region Development Authority or the City and Industrial Development Corporation.

“Since this is a slum redevelopment project and not a greenfield project, neither had prior experience. Therefore, we are primarily looking at private redevelopment,” he said.

The DRP has been pending since a decade owing to prolonged indecision, local protests, policy uncertainties, differences with planning architect and a slackened realty market leading to previously interested bidders opting out.

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