Realtors raise concerns on Dharavi redevelopment project

Say proper planning needed to ensure social rehabilitation of slum dwellers

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Realty players have sounded caution on the Maharashtra government's move to redevelop Dharavi slum, spread over 154 hectares in north-central Mumbai, through public-private project (PPP) model. While they admit Dharavi enjoys locational advantages, the realtors say the biggest challenge is social rehabilitation of existing occupants.

They say a host of economic activities such as pottery and leather business in these settlements will be affected unless a proper rehabilitation plan is developed. The area is also home to a host of small-scale industries.

The builders also warn that the retrospective changes after the terms are fixed for the project would hamper its implementation.

The government had on Wednesday taken a decision to provide 350-sq ft homes free of cost to 58,243 slum dwellers of Dharavi. The redevelopment will take place on 154 hectares, of which state undertaking Maharashtra Housing & Area Development Authority will redevelop 27 hectares, while private developers will be roped in through competitive bidding in four sectors covering 127 hectares. In all, 108,000 houses would be built, of which private developers would be entitled to sell 40,000.

Knight Frank India executive director Gulam Zia told Business Standard, “It is not just about the numbers, but a lot is to do with configuration and project specification. This location has a current positioning of ‘Asia’s biggest slum’, a stigma which may not allow developers to go for highly rewarding luxury housing segment, which can render the project financially non-feasible.” He opined that the project might face a steep challenge on feasibility in the current depressed markets.

JLL India chief operating officer (business & international director) Ramesh Nair said Dharavi's location would command enough premium to earn profits especially when island city does not have any other land parcel of its size.

“There needs to be clarity on contractual terms. Responsibilities of the stakeholders developing this node are to be notified beforehand. Biometric final surveys of slum dwellers are likely to be the most difficult and tedious step in the entire process. There needs to be processes set for the clarity and transparency,” he noted.

Considering the 2009-10 experience when state government scrapped global bids for the project, Nair stressed the need for an accurate planning and execution for its success.

Moreover, Builders Association of India spokesman Anand Gupta viewed the project will be viable as it is centrally located. However, he suggested the government will have to complete necessary legal and administrative procedures especially with regard to deciding the eligibility of beneficiaries for smooth implementation of the proposed redevelopment.

SLUMMING IT

• Population: Dharavi, one of the largest slums in the world, has a population between 600,000 and a million
   
• Area: People reside in an area spanning more than 200 acres, extremely close to Mumbai's CBD, making it very valuable
   
• Location: It is sandwiched between two of Mumbai's suburban railway lines, the Western and Central Railways.  Dharavi is highly prone to floods during monsoon, owing to its location, poor sewage and drainage systems
   
• Economy: Traditional pottery and textile industries are the most prominent industries. However, the biggest industry is a developing recycling industry, which recycles 80% of all plastic accumulated from Mumbai, employing 200,000 people. Dharavi has roughly 5,000 businesses and nearly 15,000 “single-room” factories

Compiled by: Gaurab Dasgupta