After getting no response from the real estate industry over the redevelopment of Dharavi despite extending bids four times over, the state government is now going to explore the option of offering interest-free loans to developers who show an interest in redeveloping Dharavi.
In exchange, the state government will demand housing stock in the sale component constructed by the developer. “We have decided to divide the slum clusters into eight sectors from the four at present. There were four options we had in mind for the redevelopment of Dharavi. The first was floating tenders. Later, we tried to lure developers by making a few changes in the tender documents. Neither of these options worked and so we have decided that, if required, we will also give interest-free loans to private developers who show an interest in redeveloping Dharavi,” said housing minister Prakash Mehta.
The state government, on January 30 this year, had floated global tenders of Rs 22,000 crore, for which it had opened bids on March 20. However, it did not find any takers, after which four extensions were given.
“If none of these three options bear fruit, we would in that case allow the Slum Rehabilitation Authority (SRA) to go ahead with the redevelopment of the slum cluster,” Mr Mehta added.
Shivshai Punarvasan Prakalp Limited (SPPL) will make the loan amount available. “SPPL already has Rs 2,000 crore as funds, and another Rs 10,00 crore will be made available to them by the Maharashtra Housing and Area Development Authority (Mhada) and SRA via equity,” Mr Mehta said.
SPPL is the Maharashtra government’s housing body, and was the brainchild of former housing minister Suresh Jain in 1998. However, the body has come back into the spotlight only since last year as the ruling BJP, along with ally Shiv Sena, had shown interest in reviving it.
But activists are of the view that it is not the state government’s job to give loans to private developers. “It is not the state government’s job to borrow money for or lend money to private developers when it is already in debt. It is catering only to private developers and not the slum dwellers,” said Chandrashekhar Prabhu, a housing activist.
Meanwhile, SPPL is in talks with Housing and Urban Development Corporation (Hudco) and National Housing Bank (NHB) to seek funds from them and lend the same to developers.
