Mumbai: Builders give Dharavi makeover a miss

The state government was left red-faced on Wednesday when not a single developer - national or foreign - lapped up the tenders, even after it opened online global bids at the MHADA headquarters in Kalanagar for the redevelopment of four sectors of Dharavi, sprawled over 240.35 hectares, at a cost of R21,936 crore on a public-private partnership mode.

The four sectors up for redevelopment comprise 75% of the 240.35 hectares of the slum sprawl. File pic

When the global tenders were floated on January 30, the government expected even international realtors to spring at the chance to develop Asia's biggest slum.

Developers have now been granted an extension to submit their bids till May 5 - the second such since April 7.

Nirmal Kumar Deshmukh, CEO of Dharavi Redevelopment Project (DRP), blamed a stagnant real estate market for developers' indifference to the project. He, however, kept mum when it was pointed out that market conditions haven't changed since January, when the tenders were floated.

A senior DRP officer voiced the government's disappointment. "We had expected many bidders, but it looks like they might have reservations because of the current market conditions."

He said 16 "top developers" had attended pre-bid meetings with DRP officials, but none of them made a bid on Wednesday. "This has come as a major jolt to us."

A builder, however, clarified that it isn't the dreary real estate market that held back developers. "There is a lot of confusion over the project, like who will get the slumdwellers to vacate their homes. Also, many tenants are demanding larger houses than what is mentioned in the tenders. In such a scenario, how can a developer spend so much money?"

Chief Minister Devendra Fadnavis had given the go-ahead to the redevelopment project earlier this year. Soon after, Deshmukh released the tenders on January 30, which were also uploaded on government website mahatender.gov.in.

Dharavi is divided in five sectors. The fifth cluster is being developed by MHADA.

The plan to redevelop Dharavi - and, thereby, shed the biggest slum tag - was proposed in 2003 by the then Congress-led government. But things began to move forward only in May 2011, when the government appointed MHADA as the developer for sector 5.

The MHADA buildings are now ready, but a few tenements are not the answer to Dharavi's problem. The four sectors up for redevelopment comprise 75% of the slum sprawl.

The government had in June 2007 invited tenders to redevelop all of Dharavi together, and 19 developers had been shortlisted. But the tenders were cancelled in May 2011 after the bids were found to be faulty.

Builders who take up redevelopment of the four sectors will have to finish the project within seven years of being awarded the tenders.