September 23, 2023

Adani Group’s Redevelopment Proposal for Mumbai’s Dharavi Slums Gets Government Approval

The Maharashtra government has given the green light to the Adani group’s proposal for the redevelopment of Mumbai’s sprawling Dharavi slums. The conglomerate, declared as the highest bidder eight months ago for the redevelopment of Asia’s largest slum, will now move forward with the Dharavi Redevelopment Project. DLF Ltd and Shri Naman Developers Pvt Ltd were also contenders for the project. The ambitious undertaking, spanning 590 acres, requires an estimated investment of at least $3 billion.

The government’s approval marks the first step in a series of permissions needed to commence the slum redevelopment project. This decision comes after a period of political turmoil in Maharashtra, with the entry of Nationalist Congress Party (NCP) leader Ajit Pawar as the state’s deputy chief minister and finance minister. Adani Properties Pvt. Ltd. is likely to secure the remaining project approvals within a month.

The government’s notification stated, “Government’s decision: Adani Properties Pvt. Ltd. is the maximum bidder (main partner) for the implementation of the Dharavi Redevelopment Project under the Dharavi Notified Area. The bid amount of ₹5,069 crore is being approved for appointment.”

If the recent decision is implemented, the Adani group, which already manages the city’s airport, will be responsible for transforming the Dharavi slum into residential flats, offices, and malls. Previous attempts at slum redevelopment have faced challenges, but the government’s decision to appoint the Adani group brings renewed hope to the long-standing issue. The housing department has also issued a letter of acceptance for establishing a special purpose vehicle (SPV) model for the redevelopment project, pending additional approvals from the urban development department and municipal authorities.

The SPV will have a corpus of $500 billion, with Adani Properties owning 40% of the company through an investment of $400 billion, and the Maharashtra government holding 20% through an investment of $100 billion. The appointed CEO and special task officer will have the authority to initiate the project’s internal implementation.

Once the eligible owners in the slum are determined and the potential built-up area for redevelopment is finalized, the state government and the Adani group have agreed on the terms and conditions for the transfer of development rights certificates. Following the signing of a letter of intent and subsequent letter of allotment after the formation of the SPV, the groundwork for the Dharavi redevelopment can commence.

An official stated, “After the creation of the SPV, the state government will conduct a survey to confirm the identities of all potential eligible owners who will be allotted residential flats across the 590-acre area post-redevelopment of the slum.” In a recent development, the government has also granted approval for the construction of houses to be provided to eligible Dharavi inhabitants on a rental basis on suitable land within the Mumbai metropolitan area, as long as it is within 10 km of the slum.