Dharavi Redevelopment Project officials opened bids for the project on Wednesday.
In October last year, after several failed attempts, the DRP was revived. The state government’s plan to divide the sprawling slum into 12 sub-clusters and redevelop it was scrapped, and the state Cabinet approved a fresh plan.
According to this plan, Dharavi is to be redeveloped as a whole, and not in parts. A special purpose vehicle (SPV) was set up with 80 per cent private stake, and 20 per cent government contribution, to execute the Rs 22,000-crore project.
Global tenders were floated in November for its construction.
“There were a lot of players who had shown interest and attended the pre-bid meetings. But only two bidders have formally submitted bids. We were expecting a better response after the formation of the SPV,” a senior DRP official said.
The redevelopment project has been priced at over Rs 20,000 crore, but, the base price for the tender remains Rs 3,150 crore.
Officials said the technical bids would be scrutinised next, after which the financial bids would be opened. There will be no more extensions, and one of the two bidders will be picked for the project.
According to the new plan, over 70,000 flats will be constructed over an area of 200 acres, and 55,000 families rehabilitated under project.
This is the last attempt to redevelop the slum before next year’s assembly elections. The Dharavi redevelopment was one of Chief Minister Devendra Fadnavis‘s key poll promises when he came to power in 2014.
Under the new SPV model, Asia’s largest slum will be developed in one go through the SPV.
The Dharavi Redevelopment Authority will be a minority partner in the SPV, with a 20 per cent stake, while private parties will become lead partners.
The redevelopment project, first conceived in 2003, has been on every party’s agenda during each election since, but has failed to take off. The government floated tenders twice, the last being in 2016.
A senior state government official said the approach was flawed. “The earlier plans were to divide the 240-hectare slum sprawl into five sectors and redevelop them separately, but with one master plan. Developers, however, stayed away citing high risk amid a drowning real estate market. No one was willing to take so much risk. In that model, the government had no direct role to play in the entire process, so developers feared that if something went wrong, the government would just pull out,” the official said.
Officials attribute slow real estate market conditions for the poor response. “The cost is just one factor; other factors have to be taken into account as well. The biggest question is of land ownership and relocation of existing tenants. Almost one-fifth of the land here is privately owned, so there is a big question mark over accommodating existing land owners,” an industry expert said.
“We have got two bidders, and the process will now go forward in a transparent manner,” said SVR Srinivas, CEO, DRP.