Dharavi redevelopment approval pending 8 months after Adani Realty’s winning bid

The wait for the highly anticipated Dharavi Redevelopment project in Mumbai is set to get longer as the Maharashtra government is yet to issue the work order that will set the ball rolling. Eight months have passed since Adani Realty was declared the highest bidder, but so far there has been no progress in issuing the letter of authorisation for the work to start.

Officials at different State government departments admit that they are unaware of when the government resolution would be passed for approving the project developer, after which the letter of intent will be issued by the Dharavi Redevelopment Project.

Senior officials in the State government told businessline that since this was a “very large” project a decision would be taken at “the top”.

The bid

In November 2022, the Adani group had emerged as the highest bidder for the redevelopment of Mumbai’s Dharavi, one of the largest slum clusters in the country, with an initial investment commitment of ₹5,069 crore, against a base price of ₹1,600 crore. A formal notification has to come from the State government approving the bid made by the Adani group.

Sources within the Adani group said that they were still waiting for some intimation from the Dharavi Redevelopment Project to get started. Once the LoA is issued, the developer will form a special purpose vehicle and bring in 80 per cent of the equity, the remaining 20 per cent being contributed by the State government.

‘In it for the long haul’

Sources said that a few months delay would not make much of a difference since it was a project with a long gestation period, and they were in it for the long haul. Last year at the time of being declared the highest bidder, Adani group sources had indicated that they were ready to tie up the necessary funds with a financier from the Middle East.

The Dharavi redevelopment project, when executed will be one of the largest redevelopment projects in the country. The total area involved is 2.8 sq.km. and about 68,000 slum dwellers and those running commercial enterprises will be resettled. According to the terms of the tender, the proposed completion period for construction of the rehabilitation facilities, renewal, amenities and infrastructure is seven years from the date of the commencement certificate for the first phase of the project.

The total project is estimated to cost about ₹20,000 crore, though it could go above that.

SVR Srinivas, CEO and Officer on Special Duty, Dharavi Redevelopment Project, said that pending clearance from the government, a lot of internal work was going on such as preparing for stakeholders’ consent and recruitment of staff that would be needed once the project started.