HDIL to contest termination notice on slum rehabilitation project

Stock falls 6.8% on BSE after developer writes off Rs 442 crore on project

The Mumbai airport slum rehabilitation project continues to be mired in controversy, in the wake of the airport operator terminating its contract with project developer HDIL.

HDIL was supposed to complete the project by October 2011. Today, it posted a quarterly loss of Rs 280 crore after writing off Rs 442 crore pertaining to the project. The stock of the company fell 6.8 per cent, to close at Rs 47.95 on BSE today.

The GVK group-run Mumbai International Airport Ltd (MIAL) entered into an agreement with HDIL to rehabilitate an estimated 80,000 slum dwellers residing on 276 acres of airport land. The project was to be completed by 2011 but not a single dweller has been shifted, as the government did not complete the mandatory survey to identify ‘eligible’ ones. The government is yet to even fix the eligibility conditions. An MIAL spokesperson said: “MIAL entered into a slum rehabilitation agreement with HDIL in October 2007. HDIL had to complete the slum rehabilitation within four years, i.e., by 2011. However, HDIL continuously failed to perform and MIAL issued a notice in June 2011. Because of non-performance of HDIL, the MIAL board decided to terminate the agreement and accordingly, in February, MIAL terminated the said agreement. Before termination, MIAL invoked the performance securities,” he said.

“There will be no impact of this issue on our development plans,” a senior GVK official said.

HDIL said it had not accepted the notice, which contained “unsubstantiated charges”. It said the company had been advised by its legal counsel that the notice of termination was  “not tenable in a court of law” and it had “initiated legal remedies available”.

The management said the company had fulfilled all its obligations and the notice would not impact its ongoing residential projects in the city.
SLUM SAGA
2007
October: HDIL bags slum rehabilitation project from Mumbai International Airport Limited (MIAL). The first phase of the resettlement was to be completed in 18 months, by April 2009

2010
August: Mumbai minister Naseem Khan says survey to identify eligible slum dwellers to begin soon. Survey work begins but remains incomplete due to protests

2012
June: Effectively nullifying MIAL’s deadline, Union Civil Aviation Minister Ajit Singh says no deadline for resettlement of slums
October: MIAL tries to encash the bank guarantee for breach of conditions, including failure to evict the 28,000 slumdwellers. HDIL moves Bombay HC
Dec: Bombay HC directs state authorities to expedite rehabilitation

2013
February: HDIL gets MIAL notice cancelling contract