The redevelopment of Asia’s largest slum cluster, Dharavi, is yet to fire the imagination of developers with the government not receiving a single bid for the project.
The developers did not respond to the state’s bidding process, leaving the government embarrassed.
“We had called global bids for the redevelopment, but unfortunately we have not received a single bid. We think that the real estate market condition is one of the reasons behind developers not showing interest in the project,” said Nirmal Deshmukh, chief executive officer, Dharavi Redevelopment Project (DRP).
The state government on January 30, 2016, had floated global tenders of Rs 22,000 crore after dividing the 557-acre plot into five sectors for redevelopment. Of the five sectors, four sectors are with the Dharavi Redevelopment Project (DRP), the implementing agency which had floated tenders, while the Maharashtra Housing and Area Development Authority (Mhada) is already carrying out the redevelopment of the remaining one sector.
According to Mr Deshmukh, the dates of bidding for the redevelopment of four sectors of Dharavi have been extended up to May 5, 2016.
However, real estate experts said the extension of bidding dates could be of little help.
Pankaj Kapoor, managing director, Liases Foras, a real estate consultancy, said, “The current housing regulations which are being introduced or amended have not been agreeable to the developers which is also one reason there were no bidders. The government should make its policies and taxation more simple so that a project is viable for the developers.”
A section of people living in Dharavi had protested against the redevelopment and demanded that every chawl and building residents be given 750 square feet against the actual 405 square feet in case of sector one and 350 square feet for the remaining three sectors, which according to state government officials also brought the proposed redevelopment into bad light.
“There are various reasons for Dharavi getting no bidders. They are not necessarily technical or financial. In some instances, political parties from behind the scenes have been instigating the residents to protest against the redevelopment. In such a scenario, no national or global developer would invest in the project, fearing the investment would get stuck in a political wrangling,” said a senior official from the state housing department.
At the pre-bid meeting held by the DRP in March several national and international developers were present to clarify their concerns. However, it looks like these developers did not bid for the project.
Under the redevelopment, 60,000 families residing in Dharavi were supposed to get houses of 350 square feet each as part of their rehabilitation. Developers were to be given seven years for rehabilitate from the date of signing the development agreement.
Six years ago, around 100 developers had shown interest for the redevelopment of Dharavi namely, Indiabulls Real Estate, Lodha Group, Neptune Builders, DB Realty, Kalpataru and Runwal Group. However, the Congress-Nationalist Congress Party government cancelled the tenders back in 2011 owing to a delay in implementing the project.
