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Dharavi redevelopment project: Top bidder questions Maha govt over delays, threatens to move court

Nilang Shah, the firm’s chairman and managing director, told the Indian Express on Thursday that the company has been writing to the state-run Dharavi Redevelopment Project Authority (DRPA) for over seven months for issuance of the letter regarding the awarding of the work.

Written by Neeraj Tiwari | Mumbai | Updated: February 21, 2020 1:39:56 pm
Dharavi slums, Dharavi Dharavi redevelopment project, Dharavi renovation, maharashtra govt on Dharavi slums, mumbai city news Spread over 2.4 sq km, Dharavi, which is home to over 60,000 families, is Asia’s largest slum.

SECLINK TECHNOLOGIES Corporation (STC), a Dubai-based infrastructure firm that had emerged as the top bidder for the ambitious Dharavi redevelopment project, has threatened to move court against the Maharashtra government over delays in allocation of the project.

Nilang Shah, the firm’s chairman and managing director, told the Indian Express on Thursday that the company has been writing to the state-run Dharavi Redevelopment Project Authority (DRPA) for over seven months for issuance of the letter regarding the awarding of the work. “We will file a legal case if there is any more delay in the issuance of the Letter of Award (LOA),” he said, adding that in the event of the LOA not being issued, the firm plans to seek compensation of Rs 3,100 crore.

On January 29, the STC had, in an official letter submitted to the chief executive officer of DRPA, questioned the authority’s motive behind the delay. “Despite repeated reminders for the issuance of the LOA, we haven’t received any response except a communication stating that the (government’s) committee of secretaries hasn’t taken any decision,” the letter had stated.

Spread over 2.4 sq km, Dharavi, which is home to over 60,000 families, is Asia’s largest slum. It stands on a prime land in the heart of Mumbai, barely a stone’s throw from India’s richest business district, the Bandra Kurla Complex. While the redevelopment has been on every political party’s agenda since 2004, it has failed to take off so far.

In November 2018, then Devendra Fadnavis government had approved a new model of redevelopment of the slum. In the global bidding process that followed, STC had emerged as the top bidder, having committed to an upfront capital investment of Rs 7,100 crore for the Rs 26,000 crore project.

On March 8, 2019, the DRPA even issued a Letter of Intimation (LOI) recognising STC as the topmost bidder and declared the government’s intent to award the contract to the firm. But there has been almost no progress since then.

STC has argued that an official government resolution, issued on November 5, 2018, had contended that the LOA (in this case) would have to be issued within a week of the issuance of the LOI. “We are still awaiting the grant of LOA. It has now been 11 months,” said Shah.

He added that the partners in the company had incurred significant financial losses on account of the delay. “We had to set aside Rs 28,000 crore towards the bank guarantee for the project. The delays has caused grave monetary losses. If the DRPA decides not to award us the LOA now, we will seek compensation in court,” Shah said.

In a written response to the firm on February 13, DRPA’s CEO SVR Sriniwas had remained non-committal. “Everything will be decided as per the Request for Proposal (RFP) and Request for Qualification (RFQ),” he had said.

While the government had previously sought legal opinion on whether the tendering process for the revamp itself had been vitiated due to a subsequent development where the Railways had handed over a 45-acre plot for the development work, the firm has raised questions over the move.

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