The Maharashtra government floated a global tender for the redevelopment of Mumbai’s Dharavi, with the project estimated to cost over Rs 20,000 crore. The Maharashtra government aims to complete the bidding process by the end of the year and the winner will have seven years to see the work through, including the rehabilitation of more than 56,000 families.
"We have floated global bids, and are now expecting to complete the bidding process within the next two to three months. However, it will be premature to comment on the date of work commencement as currently the timeline for completion of the bidding process is set,” SVR Srinivas, Chief Executive Officer for Dharavi redevelopment projects, who floated the global tender. The rehabilitation of Dharavi one of the most densely populated areas of the world has been in the works for more than 20 years. Its central Mumbai location makes it a prized asset in a city where land prices are some of the highest in the world.
The winning bidder will form a special purpose vehicle (SPV) to identify eligible slum dwellers. The eligibility survey would be conducted by the winning bidder and assistance would be provided by the authorities, Srinivas said.
"The Authority invites bidders to submit their bids in a single-stage, two envelopes e-tendering process. The project will be awarded to the qualified bidder quoting the highest amount, over and above the minimum stipulated investment of Rs 1,600 crore, that the lead partner of the SPV Company is ready to bring in the SPV company as per the terms and conditions of the tender documents," the bid document reads.
"Apart from the equity of Rs 400 crore, any investment required for the project shall be brought by the lead partner in the form of compulsorily convertible securities such as compulsorily convertible debentures and/or compulsorily preference shares."
A pre-bid meeting will be held on October 11 and the last date for submission of the bid is October 31, 2022. On September 30, Deputy Chief Minister Devendra Fadnavis, who also holds the housing portfolio, told that the government was looking at completing the bidding process over the next four months.
The redevelopment is being done on the basis of the Slum Rehabilitation Act of Maharashtra, which requires the slum dwellers to be rehabilitated. The additional floor space index (FSI) will be given to the winning bidder to construct homes and sell them in the open market.
The Maharashtra government has announced an FSI of 4 for the redevelopment along with several concessions in form of premiums paid by the developer, inspection charges, goods and service tax, etc.
The government has decided to include land acquired from the railways in the project and offered additional concessions to prospective developers. Certain exemptions under development control regulations and permission to invest/use TDR without Indexation. The government will also refund the state goods and services tax paid by SPV for 15 years and by the industrial and commercial companies after obtaining a certificate of occupancy. Two bidders had shown interest in the project but the bids were scrapped due to technical reasons. In October 2020, the then Maharashtra government scrapped the earlier tender for the project, which has been in the making for over two decades. Dharavi is spread over 240 acres that are notified for rehabilitation.
