by THO
Mumbai: Adani group led Navbharat Mega Developers Private Limited (NMDPL), which is redeveloping Dharavi, will not only be constructing saleable commercial and residential units within the slum pocket, but also at other locations across Mumbai that will rehabilitate ineligible Dharavikars. This was confirmed by SVR Srinivas, chief executive officer (CEO), NMDPL, who said development plans of plots other than Dharavi would be made public in due course.
As part of a special package to ensure the project is “financially feasible” and make it a model for urban renewal on a grand scale, the company has been given special concessions on developing other plots within Mumbai and ensuring real estate players mandatorily purchase a minimum of 40% of the development rights from NMDPL, said two people in the know of the project.
Since Dharavi’s revamp has been declared as a “Vital Public Purpose Project”, the state government is allowed to provide various concessions.
NMDPL did not respond to HT’s questions regarding the matter till the time of going to print.
Saleable homes
Spread across 640 acres in central Mumbai, Dharavi has approximately 1,71,000 residential and commercial units. So far, 80% of them have been surveyed. Nearly half of these are likely to qualify for free rehabilitation within the slum cluster while remaining will be rehabilitated across different locations in Mumbai, said Srinivas.
The Dharavi Redevelopment Project, a state-owned agency overseeing Dharavi’s makeover, envisions construction of 10 crore-square feet (sqft) of rehabilitation real estate and another 14 crore sqft free market real estate out of the project.
The free-market component would be crucial to the project’s feasibility, said one of the two persons in the know of project.
“The company will have to create free sale housing stock to recover costs involved in rehabilitating ineligible families and businesses inside Dharavi. By creating housing stock only for hire-purchase (for ineligible people), the project will be infeasible for NMDPL,” the person said.
Srinivas, CEO of DRP, said out of the 640 acres of Dharavi, only 240 acres was developable. The remaining 400 acres was comprised of parks, creeks, mangrove patches, and fell within the coastal regulatory zone where development activities are barred, other than need to create roads, flyovers, etc. Apart from the 240 acres in Dharavi, NMDPL through DRP is in the process of acquiring another 1,220.3 acres at six locations in Mumbai to house ineligible residents.
Another person in know of the project confirmed that NMDPL would earn revenue from Dharavi and all other locations in Mumbai where its residents are housed. “Plans to build homes at other locations within Mumbai will be finalised at a later stage,” Srinivas said.
TDR
The second concession granted by the state government to NMDPL pertains to transferable development rights (TDR). This technique of land development separates the development potential of a particular parcel of land from it and allows its use elsewhere within defined zones of the city. Similar to a free sale apartment or commercial unit, TDR can be sold in the open market to other builders.
The call for bids to redevelop Dharavi, floated in October 2022, mentioned that the contracted firm would have to mandatorily purchase the first 50% of TDR from the project. On November 22, 2022, the project was awarded to Adani Properties, whose bid of ₹5,069 crore was the highest. In November 2023, the mandatory purchase of TDR was reduced to 40% and NMDPL (then DRPPL) was granted further concession to trade the TDR without indexation.
As per existing rules, if 1,000 sqft TDR is generated from a project, only a fraction of it can be used elsewhere. But the November 2023 concession permitted the entire TDR generated from Dharavi to be utilised elsewhere, while the price at which the TDR could be sold, which is normally 30-60% of ready reckoner rates, was hiked to 90% of the ready reckoner rate. Usually, TDR is generated from the development of slums, open spaces, public car parks and roads.
These concessions have regularly attracted sharp criticisms from the opposition, with Congress MP and president of Mumbai Regional Congress Committee Varsha Gaikwad claiming that the government was selling Mumbai to the Adani group.
