Dharavi wants to be redeveloped but with its residents' future secured

Questions over Adani Group's ability to pull it off but the developer says the concern is unwarranted

Baburao Mane is furious as "his" Dharavi, a city stuck in its striking images in movies and glossy magazines, faces a radical transformation.

Not that Mane, leader of Dharavi Bachao Andolan, minds the development of the city, which has a population of 1 million. What he’s sceptical about is the involvement of Adani Realty, which has come under public scrutiny after Hindenburg Research, an American short seller, alleged the Adani Group of financial frauds.

Accusing the Maharashtra government of being partial towards the conglomerate, Mane expressed his doubts about the group's financial capability. “We don’t mind the development but it shouldn’t be done by someone who is embroiled in controversies,” he added.

Adani Realty, an arm of Adani Enterprises, had last year won the bid to revamp Dharavi, one of the largest slum clusters in the world, with an initial investment of Rs 5,069 crore. The project aims at transforming the slums into a modern residential, commercial and industrial area.

The bid by the Adani Group is an initial investment in the Rs 20,000-crore project, and according to the bid criteria, the company will form a special purpose vehicle (SPV). The SPV is a joint venture between the Maharashtra government and the firm — where the state government will hold a 20 per cent stake and the Group will hold 80 per cent. 

Situated close to major commercial estates in Mumbai such as the Bandra Kurla Complex and Mahim, Dharavi is home to a large informal sector with over 100,000 employed within the area that stretches over 2.8 square kilometres. Close to 58,000 families and around 12,000 commercial establishments are housed within this area, and the redevelopment project will have a consequence on their lives.

People here are clueless about what is going to happen. They (the government) should have, at least, taken the residents into confidence, said Manda Agawale, who runs a khadi and leather manufacturing unit in the area. She also owns a chawl that is home to 18 to 20 families. 

Only those who produce documents to prove their residential unit existed in the area before January 1, 2011, are entitled to a free house. Those who are ineligible will be provided homes after paying the construction cost. “There are many daily wagers who came here after the cut-off date. I wonder how they will afford these construction costs,” Agawale said. 

This is the fourth time in 18 years that the Maharashtra government is attempting to rebuild Asia's largest slum cluster, which is also a thriving market that contributes to the informal economy with an estimated annual turnover of $1 billion.  

When asked why past attempts hadn’t been successful, Mane said, “It’s all about the willpower of the ruling authority, which previous governments lacked.” Mane had completed a full term as an MLA from Dharavi in the 1995 Bharatiya Janata Party-Shiv Sena government. 

Speaking in the Maharashtra assembly on March 21 this year, Congress MLA Varsha Gaikwad had questioned the allotment of the tender to the Adani Group at allegedly a lower price and the changes in the conditions for the bidders. The legislator from Dharavi had said: “There is an atmosphere of fear in our area. People are taking out marches, and some are preparing to file petitions in the court.” The Adani Group has not given the work order yet, and it is being demanded that the work order should not be given, she said. 

In January 2019, a Dubai-based firm, Seclink Technologies Corporation (STC) had won the bid for Dharavi, after outbidding Adani Infrastructure and Developers Pvt Ltd. STC had quoted Rs 7,200 crore, while Adani had bid at Rs 4,539 crore. However, the project hit a roadblock due to issues with the railway land and the STC tender was cancelled.

Replying to Gaikwad's questions, Deputy Chief Minister Devendra Fadnavis, who also heads the housing department, asserted that the government was not going to take the project back from the group. He, however, assured that the firm would get the letter of intent (LoI) only after it had established that it had the financial capability to execute the project.

Meanwhile, deeming the concerns unfounded, an Adani Group spokesperson told Business Standard, “The fears and concerns, raised by the parties with a vested interest, on us meeting financial obligations for the project are unwarranted.” The balance sheet of Adani Properties is very strong, and “we are confident about arranging the financing for this project,” the spokesperson added.

While residents like Manda and the MLA are anxious about Dharavi’s future, some are hopeful about the redevelopment.

SVR Srinivas, CEO of the Dharavi Redevelopment Board, which is overseeing the slum cluster’s overhaul, and commissioner of the Maharashtra Housing and Area Development Authority, believes that the project will be a stepping stone towards a slum-free Mumbai and an example of upward social movement. 

He is also mindful of the challenges that may arise along the way. “Among the many challenges, rehabilitating thousands of people and their commercial and industrial units is one of the biggest tasks at hand,” Srinivas said. “As of now, we have made plans for the commercial establishments by allotting them separate spaces and options for technological upgrade.”

The units will be provided with a five-year state goods and services tax (SGST) refund, he added.

As far as the shifting of residents is concerned, the commissioner said that the consultation with the people of Dharavi will start soon and the first seven years of the project will focus on their rehabilitation. “The project will start as soon as the state government releases a LoI to the Adani Group,” Srinivas said.

Hafeez Contractor, arguably India’s commercially most successful architect, said that with the project going to the Adani Group, he was optimistic about the social and financial good the redevelopment would bring. “This will show the world how such a huge plan is carried out, and that too in one go. This will help uplift people’s situation, right from sanitation and water supply to pucca homes,” Contractor said. 

Back in Dharavi, as Raju Khade wraps up his day at his handbag manufacturing unit, his only ask is a better place to live and work – ideally, close to where he now lives, if not the same spot. “Many of my friends and I have been living and working here for decades, so we do not wish to leave,” Khade said. “But, going by the current situation of Dharavi, development is needed too.”