Again, There are No Tak­ers for Dhar­avi Re­de­vel­op­ment

Tough el­i­gi­bil­ity norms blamed for builders’ lack of in­ter­est, dead­line for sub­mis­sion of bids ex­tended for the sec­ond time in past 20 days

The Economic Times - - Companies - Kailash.Babar@ times­group.com

Mum­bai: The state govern­ment’s am­bi­tious project to re­de­velop Asia’s largest slum Dhar­avi spread over 240 hectares in the heart of the country’s com­mer­cial cap­i­tal Mum­bai failed to elicit any re­sponse from devel­op­ers. The poor show has forced the au­thor­ity to post­pone the bid sub­mis­sion dead­line for the sec­ond time in the last 20 days.

The nodal agency for the project, Dhar­avi Re­de­vel­op­ment Project Au­thor­ity, had ear­lier set April 7 as the last date for sub­mis­sion of bids for the project es­ti­mated to be worth around .₹ 22,000 crore. Given the cold re­sponse, the dead­line was ex­tended to Wed­nes­day April 20, and now stands post­poned to May 5.

Ac­cord­ing to in­dus­try ex­perts, tough el­i­gi­bil­ity con­di­tions in­clud­ing net­worth, turnover and work ex­pe­ri­ence, among oth­ers have kept builders away. “It was ex­pected to be this way given the cur­rent mar­ket sce­nario and most im­por­tantly el­i­gi­bil­ity con­di­tions do not seem to be in sync with the re­al­ity,” said one of the en­tity that had at­tended prebid meet­ing last month.

This is the sec­ond at­tempt by the state govern­ment to kick start the re­de­vel­op­ment of Dhar­avi abut­ting busi­ness district Ban­dra-Kurla Com­plex. In its first ef­fort in 2007, govern­ment had re­ceived around 14 devel­op­ers’ re­sponses at Ex­pres­sions of In­ter­est stage. How­ever, seven out of th­ese in­ter­ested en­ti­ties later backed out and the bids were can­celled al­to­gether in 2011.

Calls and text mes­sage to Dhar­avi re­de­vel­op­ment project chief ex­ec­u­tive of­fi­cer Nir­mal Kumar Desh­mukh re­mained unan­swered.

Limited con­sump­tion of gen­er­ated Floor Space In­dex due to height re­stric­tion, pay­ment of stamp duty charges for de­vel­op­ment agree­ment, over­all slug­gish mar­ket and con­cerns over va­cat­ing the slums have also been cited to the weak re­sponse to the mega project.

Devel­op­ers are al­lowed to form con­sor­tiums to bid for the project and each con­sor­tium can have max­i­mum three part­ners. The con­di­tions set for el­i­gi­ble bid­ders in­clude any of th­ese three part­ners to have com­pleted a .₹ 4,460-crore sin­gle project in the past seven years. If not, then two of th­ese part­ners need to have com­pleted .₹ 2,790 crore projects each or three of them are re­quired to have fin­ished projects worth .₹ 2,230 crore each dur­ing th­ese seven years.

Ad­di­tion­ally, the de­vel­oper is ex­pected to have fin­ished re­de­vel­op­ment of 1,000 slums or 600 slums each by two part­ners or 500 slums each by three part­ners form­ing con­sor­tium.

Cu­mu­la­tive turnover of three part­ners for the past three years needs to be more than .₹ 1,680 crore. The con­sor­tium’s min­i­mum net­worth is re­quired to be .₹ 1,450 crore. Among other con­di­tions, the bid­ding con­sor­tium is also ex­pected to fur­nish bank guar­an­tee worth .₹ 280 crore.

Ad­di­tion­ally, de­spite ef­forts to at­tract global par­tic­i­pa­tion to re­de­velop the slum, no in­ter­na­tional en­tity has so far shown in­ter­est or sub­mit­ted bids for the project. “No in­ter­na­tional en­tity at­tended the pre-bid­ding meet­ings that took place ear­lier this year, while no real es­tate de­vel­oper has been able to rope in any global part­ner for the al­liance,” said a con­sul­tant that ad­vised one of the devel­op­ers. Dhar­avi Re­de­vel­op­ment Project Au­thor­ity had floated global ten­ders to re­de­velop four of the five sec­tors of the slum in Jan­uary. The to­tal de­vel­op­ment of Dhar­avi will be di­vided in five sec­tors. Of th­ese, four sec­tors spread over 440 acres will be re­de­vel­oped by pri­vate devel­op­ers, while the fifth sec­tor spread over 66 acres by the Ma­ha­rash­tra Hous­ing and Area De­vel­op­ment Au­thor­ity (MHADA).

The bids are for re­de­vel­op­ment of nearly 75% of the slum through pub­lic-pri­vate part­ner­ship, as orig­i­nally mooted nearly 12 years ago. As per the plan, the res­i­dents of sec­tor I are ex­pected to get 405 sq ft apart­ments each based on the size of their cur­rent houses, while the rest of the slum dwellers would get houses of 350 sq ft size. In the re­vised at­tempt this time, each sec­tor is ex­pected to be re­de­vel­oped by a de­vel­oper to be se­lected by the au­thor­ity through the process.

The bids are for re­de­vel­op­ment of nearly 75% of the slum through publicpri­vate part­ner­ship

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