Sunday, July 21, 2024

Maharashtra gives its nod to Adani’s Dharavi project

Mumbai: The Maharashtra government has approved the Adani group’s proposal to rehabilitate residents of Mumbai’s 590-acre Dharavi locality, home to over 900,000 Indians, almost eight months after the conglomerate won a tender to develop India’s largest slum.

The state’s housing department said on Friday that Adani group will be the government’s partner for the Dharavi redevelopment project, which involves an investment of at least $3 billion. Mint has reviewed a copy of the letter termed a “government resolution.”

The notification marks the first in a series of approvals required for the slum redevelopment project to proceed. It comes following significant political upheaval in Maharashtra, where Nationalist Congress Party (NCP) leader Ajit Pawar has joined the state government, assuming the role of the state’s deputy chief minister and finance minister, after breaking ranks with his uncle Sharad Pawar. However, Adani may get the remaining approvals for the project in another month.

The letter said: “Government’s decision: As the main partner for the implementation of Dharavi Redevelopment Project under Dharavi Notified Area, the maximum bidder is (mainly) Adani Properties Pvt. Ltd. The tender of 5,069 crore is being approved for the appointment.”

The housing department further decided to give the letter of acceptance in this regard and for setting up the special purpose vehicle (SPV) model for Dharavi redevelopment project. However, before an SPV can be formed, it will need more approvals from the city’s municipal authorities and urban development department.

After several failed attempts by multiple administrators in the past, if the government’s latest decision gets implemented, the Adani group, which also runs the airport in the city, will be contracted to transform the slum into apartments, offices and malls.

Mumbai’s administrators have struggled for decades to modernize Dharavi.

To begin with, the SPV will have a corpus of 500 crore, with the Maharashtra government holding a 20% stake for an investment of 100 crore, and Adani Properties owning the rest of the company with an investment of 400 crore.

The government said the appointed chief executive officer and special task officer for the Dharavi redevelopment project/slum rehabilitation authority are being authorized to decide on “immediate initiation of internal implementation”.

Realty developers DLF Ltd and Shri Naman Developers Pvt Ltd were the other contenders for the project.

The state and the Adani group have reached an agreement on the terms and conditions for the transfer of development rights certificates for the Dharavi redevelopment project after the government determines the eligible owners in the slum and the total potential built-up area for redevelopment.

“The two parties have agreed upon certain new indexation of TDR conditions so that the corporation also benefits adequately in terms of gaining the flexibility to redevelop other areas in Mumbai city on the basis of the tradeable/transferrable TDR certificates,” an official said, requesting anonymity.

To be sure, the groundwork for the Dharavi redevelopment can start after the government issues a letter of intent and a subsequent letter of allotment following the creation of the SPV between the Adani group and the Maharashtra government.

“Following the creation of the SPV, the state government will conduct an authentication survey to verify the identities of all the potential eligible owners who would be allotted residential flats across the 590 acres area post the proposed redevelopment of the slum,” the official said.

After the completion of the authentication survey, the official said, a portion of the eligible owners may be relocated to transit buildings to be constructed in the lands adjacent to the Dharavi slum in the initial phase.

In the latest letter, the government approved the development of houses to be allotted to eligible Dharavi residents on a rental basis in suitable land in the Mumbai metropolitan region if such land is within 10 km of the slum during the period of redevelopment.

Mayur Bhalerao contributed to this story

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Updated: 15 Jul 2023, 01:46 AM IST

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