Adani’s Dharavi slum redevelopment project struggles to secure land in potential setback: Report

A joint-venture led by billionaire Gautam Adani is struggling to secure land to rehabilitate poor residents of one of Asia’s largest slums in Mumbai in a fresh challenge for the ambitious reconstruction plan, Reuters reported. 

The Dharavi project, reportedly with a revenue potential of Rs 20,000 crore, aims to rebuild the vast slum in central Mumbai, near the BKC business district. The tender was awarded to Adani Properties in November 2022 after a competitive bid involving realty giants DLF and Naman Developers.  

Only those who lived in Dharavi before 2000 will get free homes in the redevelopment and a lot of the land needed to rehabilitate people will be to provide housing to the roughly 7,00,000 people considered ineligible, the Reuters report added. 

To build homes for the ineligible people, the Adani joint venture applied to various local and federal agencies for more land, but has yet to secure any, SVR Srinivas, head of the Dharavi Redevelopment Authority, told Reuters. 

That’s because such government agencies have their own plans for land they own and are not willing to part with it, he added.  

Dharavi redevelopment plan 

The Dharavi slum redevelopment project, valued in crores, will involve the transfer of land not to the Adani group, but to various Maharashtra government departments. Adani, acting as the project developer, will only construct homes for Dharavi residents. 

These homes will then be transferred back to the government departments for allocation to residents, according to a PTI report.  

The Adani Group secured the Dharavi slum redevelopment project via open international bidding. They will construct housing and commercial units through their joint venture, Dharavi Redevelopment Project Private Ltd (DRPPL), in collaboration with the Maharashtra government.  

Once built, these units will be handed over to the Dharavi Redevelopment Project/Slum Rehabilitation Authority (DRP/SRA) of the Maharashtra government for allocation based on survey results. 

Sources clarified misunderstandings about the project by explaining that according to the tender terms, the land remains allocated to DRP/SRA at government-approved rates. DRPPL is required to pay the government for development costs upon demand.  

Although, DRPPL gains development rights, the state support agreement included in the tender specifies that the state government will assist the project by providing land to its own DRP/SRA department. 

Allocation of homes 

Under the DRP/SRA scheme, it has been insisted that no resident of Dharavi will be displaced. 

Residents holding tenements existing on or before January 1, 2000, will qualify for rehabilitation within Dharavi itself. Those who came between January 1, 2000, and January 1, 2011, will be allocated homes under PMAY outside Dharavi in Mumbai Metropolitan Region for a nominal fee of Rs 2.5 lakh or through rental housing options. 

Tenements built after January 1, 2011, until the official cutoff date will receive housing under the state government’s upcoming affordable rental housing policy, with the possibility of opting for a hire-purchase arrangement. The Dharavi redevelopment plan is distinct from the standard SRA scheme, ensuring that all qualifying tenement holders are offered homes of up to 300 square feet. 

In the Dharavi redevelopment project, flats measuring 350 square feet will be allocated, which is 17 percent larger than those typically provided in other SRA schemes in Mumbai. 

The project also includes 10 years of free maintenance and allows for 10 percent commercial space within residential premises, ensuring sustainable revenue for housing societies. Eligible businesses will receive free business premises, and a five-year state GST rebate is offered to enhance profitability, integrate them into the formal economy, increase competitiveness, and create growth opportunities.