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Adani Group’s applies for the Dharavi rehabilitation project, which aims to transform Asia’s second-largest slum cluster, has been accepted by the Maharashtra government.
The Maharashtra Housing Department obtained final permission for the hiring of Adani Properties for the reconstruction of Dharavi in a government resolution (GR) dated July 13.
Adani Realty, the real estate arm of the ports-to-power business, was deemed the highest bidder for the massive rehabilitation project eight months ago.
The Adani Group emerged as the highest bidder in November 2022 for the reconstruction of Mumbai’s Dharavi, one of the country’s biggest slum clusters, with an initial investment commitment of Rs 5,069 crore, against a base price of Rs 1,600 crore.
Adani Realty will have seven years to complete the task, which includes restoring over 56,000 households. The project is expected to cost around Rs 23,000 crores.
The reconstruction will cover 2.8 square kilometers, and around 68,000 slum inhabitants and business entrepreneurs will be relocated. According to the tender terms, the projected completion duration for the rehabilitation facilities, renewal, amenities, and infrastructure is seven years from the date of the first phase of the project’s initiation certificate.
The bids for the current tender were originally revealed on November 16 to reveal the identities and bid amounts of the three businesses (Adani Group, DLF, and Naman Group). The proposals were then reviewed for technical and financial suitability.
In 2018, the Adani Group offered Rs 4,529 crore for the project while the previous BJP-Shiv Sena government was vigorously pursuing it, but Dubai-based Seclink Technology Corporation emerged as the highest bidder at Rs 7,200 crore. The Maharashtra Vikas Aghadi (MVA) administration, led by Uddhav Thackrey, cancelled the offer.
Since its inception in 2010 as the conglomerate’s luxury residential and commercial property branch, Adani Realty has been constructing residential, commercial, and social club projects totaling about 64 lac sq. mtrs. (69 million sq. ft. approx.) in cities like as Ahmedabad, Mumbai, Gurgaon, Kochi, and Mundra. It made its first step into the Mumbai real estate market in 2014 with the Western Heights project in Andheri.
Adani Realty or Adani Group has three more high-end projects in Mumbai, including one that is now under construction in Ghatkopar and one in each of the western and central suburbs.
Shinde-Fadnavis government’s renewed push
The Maharashtra government issued a global tender in October 2022 for the reconstruction of Asia’s largest slum, Dharavi, which spans 240 hectares of valuable land in the heart of the country’s commercial metropolis Mumbai. It is expected that the project would cost Rs 20,000 crores.
Maharashtra cabinet, under by Chief Minister Eknath Shinde, accepted new worldwide bids for the Dharavi Redevelopment Project (DPR) in September 2022 and granted extra perks for the enormous urban regeneration project.
Adani Group Redevelopment Prospects
The slum reconstruction project must be done via a joint venture in which the selected developer will have 80% equity (estimated at Rs 400 crore) and the state government would hold 20% with Rs 100 crore equity capital.
Aside from the Rs 400 crore equity, any further investment necessary for the project must be brought in by the lead partner in the form of instruments such as Compulsorily Convertible Debentures and/or Compulsorily Convertible Preference Shares, as specified by the state government.
Bidders must also have a consolidated net worth of Rs 20,000 crore and Rs 2,000 crore, according to the bidding conditions.
So far, the state government has designated around 240 hectares for the reconstruction of the Dharavi slum.
The state government has also granted a floor space index (FSI) of four and an extra fungible FSI accessible in accordance with the current development control rules (DCR) for open market rehabilitation, renewal component, and free sale built-up area.
Each slum owner will be entitled to a minimum carpet space of 405 square feet. Adani group dharavi redevelopment