M'rashtra makes Rs 1.10 cr from sale of Dharavi project forms

Though the Rs 10,000 crore Dharavi Redevelopment Project a couple of months away, the Slum Rehabilitation Authority (SRA) of Maharashtra, which is overseeing the project, has made a cool Rs 1 crore from the sale of Expression of Interest (EOI) forms. The sale of bidding forms started on June 1 and ended on Saturday.

The SRA had sold nearly 100 forms by June 29 evening. And going by the form charges of Rs 1 lakh, it has raised about Rs 1 crore.

The submission of EOI starts on July 1 and ends on July 31. The financial bidding starts in August and the winning bidders will be decided by September.

But SRA officer-on-special duty IS Chahal believes Rs 1 crore is a small sum compared to the project cost of Rs 10,000 crore.

"Where do you expect the money to go? We spent Rs 10 lakh on advertisement itself. Entire application money will go towards the project", Chahal said.

Though it was believed that application charges were kept high to keep away non-serious players from the project, a Mumbai-based developer, who did not want to be quoted, said it has not deterred the small players from buying the forms and forming alliances with big players to bid for the project.

The developer said, Dharavi is one among the largest realty projects the country has ever seen, drawing developers from the nook and corner of the country. Reliance Industries, Larsen & Toubro, DLF, Hiranandani Constructions, Mahindra Gesco, K Raheja Universal, HDIL, Gammon Infrastructure, Kalpataru, Peninsula Land and host of other developers have bought the forms, sources said.

The project has also drawn the interest of the global realtors like US-based Hynes, Far East-based Capitaland, Ascendas, Ayala and Dubai-based developers Emaar Properties and Al Nakheel, sources said.

Said Niranjan Hiranandani, MD, Hiranandani Constructions: "We have taken the forms. If the conditions and terms work out, we will bid. Who is developing the slum is not important. The more crucial factor is that the country's financial centre be cleared of its largest slum."

What has drawn developers to Dharavi is the fact that the 144-hectare project, the size of six Nariman Points in Mumbai, will allow winners to sell 133 sq ft of built-up space for every 100 sq ft used to rehabilitate about 57,000 families living in the slum.

It is estimated, to produce 5 million square feet of new office and residential space in the near term and a 40 million square feet over seven years.

Though SRA floated global tenders announcing the project, it has made pre-qualification criteria very stringent.

To pre-qualify, bidders must have completed at least one 100-acre township with a minimum built-up area of 7 million sq ft, have a gross net worth that's 30 per cent of the project cost for one sector (about Rs 1,800 crore) and have an average annual turnover for the past three years, equalling 25 per cent of the sector's project cost. Joint ventures can have a maximum of three members with the main partner holding not less than 40 per cent share.

Analysts opine that going by the criteria, not many developers would be eligible for the bidding. The global tenders announcing the project appeared in newspapers in 20 cities across the world including the Wall Street Journal and Financial Times in the last week of May.

After furnishing the project details and projected cost of Rs 9,300 crore or "approximately $2.3 billion", it asked: "Is it enough to turn you on?" Going by the response to develop 'The Asia's largest slum, the SRA's media blitzkrieg has really paid off.