Will Gautam Adani Find a New Way to Transform Dharavi?
The Adani Group is on a never-ending march to take over and expand infrastructure projects. However, Gautam Adani‘s most recent project, the rehabilitation of Dharavi, possibly the world’s most dense and largest slum layout, may be a difficult nut to crack.
The Adani company won the project with a bid of Rs 5,069 crore, beating out DLF of Delhi, who bid Rs 2,025 crore. Naman, another Mumbai group, was eliminated in the technical round. The fact that eight developers attended the pre-bid meetings but only three eventually entered the race demonstrates how difficult the project is.
Dharavi’s reconstruction has always been difficult since it is a complicated slum township that not only houses 68,000 families in semi-legal tenements, but also a maze of cottage and home businesses such as pottery, leather works, pappad-manufacture, and packaging facilities. Dharavi, located in the centre of Mumbai’s island metropolis amid a crisscross of nullahs, is regarded as an ‘eyesore’ and has been the focus of attempts to rebuild it in accordance with standard town-planning norms since 1971.
Will it turn out to be a goldmine for Adani?
On the surface, the Adani Group appears to have landed a gold mine. The project spans 540 acres, or almost 2.5 square kilometres (kms), and has been granted 4.0 FSI special development rights (ie. the built-up area allowed is 4X of ground area). It is also adjacent to Mumbai’s opulent steel and glass commercial hub, the Bandra Kurla Complex (BKC). A fresh sweetener is the recent inclusion of an adjoining 117 acre of Railway land to the project.
The rebuilding of Dharavi would adhere to the same ‘cross-subsidy’ paradigm that has fueled slum rehabilitation in Mumbai for decades. At the developer’s expense, existing families and businesses will be repaired in planned patterns. After the restructuring, the surplus land will be developed and sold to finance the project and provide a profit margin to the developer. Thus, the Adanis would spend Rs 25,000 crore on rehabilitation, which will include essential civic amenities such as water, power, roads, and other infrastructure.
There are some ridiculous projections regarding what will happen to the Adani Group. One of them envisions 50 million square feet being used for local citizen rehabilitation and 40 million square feet being freed for sale as commercial real estate. At the current market rate of Rs 50,000 per sq ft, the developers are expecting to achieve sales of Rs 2 lakh crore!
This may be a lot of shrewdness! As people have witnessed the state government’s several attempts and commercial bids to pull Dharavi into the development net during the last two decades. So far, all have failed!
In 1975, the Maharashtra government launched the Slum Improvement Programme to offer basic facilities. In 1985, the World Bank again contributed to a slum improvement effort (SUP). Both were unsuccessful. The state government then opted to construct Dharavi as an integrated planned township through private developers utilising the ‘cross-subsidy’ technique. A February 2004 Government Resolution (GR) designated 440 acres (178 ha) for commercial development, and Dharavi was put out to bid in three to four rounds.
The first plan was made by an architect from MM Consultants named Mukesh Mehta. He suggested developing 12 sectors and separating them into distinct 7-story buildings with flats measuring 225 square feet each for homes and industrial parks for manufacturing facilities. After Dharavi Bachao Samiti (DBS) demonstrations, a revised plan from 2008 offered mezzanine floors in buildings for small enterprises including papad manufacturing.
Since then, Dharavi has had three rounds of bidding in which numerous foreign cartels also participated. On the ground, though, little changed. The project was won in the most recent round in 2019 by the Dubai-based Seclink Technology Corporation (STC), which submitted a proposal of Rs 7,200 crore. Then, Adani Infrastructure lost with a lower offer of Rs 4,529 crore. The project was not awarded by a Committee of Secretaries (CoS) for some reason, and the Dubai company has been making threats and demands for compensation.
The Problem with the People
Dharavi presents a dilemma because it is not a new construction project where the laws of the real estate market can be applied arbitrarily. Old, established homes and thriving businesses are surrounded by each other in this “brownfield” arrangement.
People have observed several generations of potters working in Dharavi’s “Kumbhar Wada.” Can these potters work in industrial complexes with multiple stories? The thousands of taxi garages, as well as the leather units, are faced with the same dilemma.
Dharavi is a collection of native residents and many waves of immigrant communities. There will be resistance from below if the project’s proponents ignore the numerous subtleties and demands of people. If so, will the Adanis follow the bulldozer’s path?
The top-down strategy of Maharashtra’s Slum Rehabilitation Scheme, established by Bal Thackeray in 1997 to provide pucca dwellings to 40 lakh slum dwellers, has also failed miserably for this reason. It has produced 2,067 projects in 24 years with only 223,000 tenements. Dharavi will proceed in the same manner unless new thinking is adopted.
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