Dubai-Based Company To Redevelop Dharavi
Months after bids were invited to redevelop Dharavi, one of the largest slums in Asia, Dubai-based Seclink Technology Corporation (STC) would be undertaking the redevelopment of Dharavi while the royal family of the United Arab Emirates (UAE) would be funding this project.
The idea of redeveloping Dharavi was floated 15 years ago in 2004. However, issues such as ineligibility of dwellers to be allotted new homes had delayed the plans. After rounds of tendering process, STC bagged the project at Rs 7,200 crore leaving behind Adani Infrastructure.
According to the state government's redevelopment plan, dwellers would be entitled to 350-sq ft homes within the redeveloped project along with a compensation. Under this project, STC would also construct rehabilitation towers on a 10-acre plot which will house the first batch of 1,200 residents out of an estimated 60,000 residents. Thereafter, plans to shift businesses here will start. Real estate builders, working with STC on the project, would also get to sell units.
Out of the 600 acre, over which the project is spread, 200 acre would be used for the rehabilitation while another 100 acre would be dedicated to a garden. On the remaining 300-acre land, commercial buildings would be developed.
Under the new plan, Dharavi would also be developed into a single cluster. For this, a special purpose vehicle (SPV) with 80 per cent private stake and 20 per cent government contribution will be constituted to complete the project which was estimated to be worth Rs 26,000 crore.
The lead partner would be expected to form the SPV with its own contribution of 80 per cent equity worth Rs 400 crore while the Maharashtra government would be putting in Rs 100 crore. The lead partner is also expected to look into further investment required for the project.
The SPV would be in charge of constructing free settlements for those eligible. It will also be entitled to construct free-sale area that can be sold to homebuyers in the open market.
However, located at Mumbai airport's funnel zone — controlled airspace where high-rises are usually banned owing to the safety of buildings — there are height restrictions imposed on buildings in Dharavi. To ensure the project is successfully implemented, the housing department is seeking some relaxation in terms of the space between two high-rises which is currently 18 metre. In the detailed project report, the department had suggested that the distance between buildings could be maintained at 12 metre so that more high-rises could be constructed. Once approved, the FSI would be four times higher.
What’s the future
Industry experts know that this much-awaited development could change the face of Mumbai real estate and not just for the slum-dwellers. Dharavi’s strategic location, close to Bandra and the Bandra-Kurla Complex makes it a game changer. Given that Mumbai is already under pressure when it comes to residential housing, the redevelopment project could lift the burden off the south Mumbai localities. It is also interesting to note that the government is offering sops and subsidies as also stamp duty waivers on the development rights agreement and the first sale of saleable area.
There have been multiple issues surfacing from time to time in this industrial pocket of the tinsel town. A number of small units that dealt with leather, plastic, garments, bakery, spare parts etc have seen the worst of days especially after demonetisation and the Goods and Services Tax (GST). Such economic pressure mounting over the last two years plus the uncertainty of a redevelopment and eligibility issues have kept a large group of Dharavi dwellers aloof, most of whom feel that the redevelopment project is a mere eye-wash.
This is the third time that the attempt has been made in this area spanning 593 acres which houses over 60,000 families. The minimum bid is set at Rs 3,150 crore.