The Dharavi redevelopment project has been under discussion for close to 20 years. File photo
The Adani Group on November 29 won the bid to redevelop Dharavi, one of the largest slum clusters in the world with an initial investment of ₹5,069 crore.
SVR Srinivas, chief executive officer of Dharavi Redevelopment Project and commissioner of Maharashtra Housing and Area Development Authority confirmed the same and said, “Adani Group won the bid with ₹5,069 crore, DLF Group submitted a bid of ₹2,025 crore, we did not open Naman Group’s bid, as it didn’t not qualify due to technical reasons.”
The bid by Adani Group is merely the initial investment in the ₹20,000 crore project and according to the bid criteria, the company will have to form a special purpose vehicle (SPV). Thereafter, 20% of this initial investment will have to be submitted before signing the development agreement and an additional 20% on submitting an integrated master plan.
An SPV is an entity formed for a specific purpose of infrastructure and rehabilitation and this SPV has the State Government’s stake at 20% and 80% is that of the international consortium that wins the bid for the redevelopment, ie. Adani Group.
As per the bidding contract, “The project will be awarded to the qualified bidder quoting the highest amount, over and above the minimum stipulated investment of ₹1,600 crore, that the lead partner [Adani Group] of the SPV company is ready to bring in. Apart from equity of ₹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.”
This is the fourth time in the last 18 years that the Maharashtra Government is attempting to build Asia’s largest slum cluster which is home to close to 58,000 families and has around 12,000 commercial establishments. The redevelopment plan is an integrated development approach of the residential, commercial, and industrial with a floor space index of over 4.
