The Dharavi Redevelopment Project in Mumbai, eagerly awaited by many, is encountering further delays as the Maharashtra government has yet to issue the work order required to initiate the project. Despite Adani Realty being declared the highest bidder eight months ago, there has been no progress in granting the necessary authorization to commence the work.
Officials from various State government departments acknowledge their lack of knowledge regarding the approval process for the project developer, which will precede the issuance of the letter of intent by the Dharavi Redevelopment Project. Senior officials in the State government have indicated that due to the magnitude of this project, a decision will be made at the highest level.
In November 2022, the Adani group emerged as the top bidder for the redevelopment of Dharavi, one of India’s largest slum clusters, pledging an initial investment of ₹5,069 crore against a base price of ₹1,600 crore. However, the State government must issue a formal notification approving the bid made by the Adani group.
Sources suggest that the government may be waiting for the Securities and Exchange Board of India (SEBI) to conclude its investigation into the allegations made by Hindenburg Research against the Adani group. The SEBI probe is expected to be completed by August 14.
Adani Group sources have expressed their anticipation for communication from the Dharavi Redevelopment Project to initiate the project. Once the Letter of Authorization (LoA) is issued, the developer will establish a special-purpose vehicle and contribute 80% of the equity, with the remaining 20% provided by the State government.
Company officials have stated that a few months of delay will not significantly impact the project, as it has a long gestation period, and they are committed to the long haul. Previously, the Adani group had indicated its readiness to secure the necessary funds through a Middle Eastern financier upon being declared the highest bidder.
The Dharavi redevelopment project, upon completion, will be one of the largest redevelopment initiatives in the country, encompassing an area of 2.8 sq. km. Approximately 68,000 slum dwellers and commercial enterprises will be relocated. As per the tender terms, the proposed timeline for completing the rehabilitation facilities, renewal, amenities, and infrastructure construction is seven years from the commencement certificate for the first phase of the project.
The estimated cost of the entire project is around ₹20,000 crore, but it could potentially exceed that amount. SVR Srinivas, CEO, and Officer on Special Duty at the Dharavi Redevelopment Project, mentioned that while awaiting clearance from the government, extensive internal work is being carried out, including securing stakeholders’ consent and recruiting staff required for the project’s commencement.
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