The recent media interview of Devendra Fadanvis, Deputy Chief Minister of Government of Maharashtra, has been extremely informative and the way he made statements on the infrastructure narrative in Mumbai is commendable. Owing to the commitment of Government of Maharashtra for transforming Mumbai with infrastructure development, the Dharavi Redevelopment Plan is one of such game-changing and dream project of the Government. Thus, it is pertinent to look into different aspects of this project.
• Trajectory of Dharavi Redevelopment Plan:
The Dharavi Redevelopment Plan (DRP) has a long history, spanning several decades, marked by numerous proposals, delays, and political shifts. Dharavi, located in the heart of Mumbai, is one of Asia’s largest slums and has been the subject of various redevelopment initiatives since the 1980s.
1. 1980s – Early Attempts and Recognition of the Issue
• Dharavi emerged as a significant slum during the rapid urbanisation of Mumbai in the mid-20th century. By the 1980s, the state government of Maharashtra recognised the need to improve living conditions.
• Initial efforts were mostly piecemeal, focusing on small infrastructure projects such as improving roads, sanitation, and water supply. However, these were not part of a comprehensive plan, and the situation in Dharavi continued to deteriorate.
2. 1995 – Slum Redevelopment Scheme (SRS)
• The Maharashtra Government introduced the Slum Redevelopment Scheme (SRS) in 1995 under then Chief Minister Manohar Joshi. The scheme was aimed at providing free housing to slum dwellers across Mumbai by incentivising private developers to build.
• Dharavi was one of the target areas, but due to legal, financial, and logistical challenges, very little progress was made.
3. 2003 – The First Major Dharavi Redevelopment Plan
• In 2003, under the leadership of Chief Minister Sushil Kumar Shinde, the government launched the Dharavi Redevelopment Plan. This plan envisioned transforming Dharavi into a modern township by dividing the area into five sectors, each to be redeveloped by private developers.
• The plan was ambitious, intending to house Dharavi’s nearly 60,000 families in multi-story buildings, while also creating commercial spaces for businesses.
• However, several challenges arose, including:
o Land Ownership Disputes: Dharavi’s land had a complex ownership pattern involving private and public ownership.
o Resident Consent: Many residents feared displacement or inadequate housing.
o Developer Interest: Some private developers were hesitant to take on such a large and risky project.
4. 2007 – Global Bidding Process
• In 2007, the Maharashtra Government, under Chief Minister Vilasrao Deshmukh, introduced a global tender process to attract international developers to take up Dharavi’s redevelopment.
• The area was re-divided into five sectors, and developers were asked to bid for each sector. In exchange for building free housing for the slum residents, developers would get portions of the land for commercial development.
• International firms showed interest, but progress was slow due to local opposition, legal challenges, and the global financial crisis in 2008, which impacted developer participation.
5. 2009 – Appointment of Mukesh Mehta
• In 2009, urban planner Mukesh Mehta was appointed as the consultant for the Dharavi Redevelopment Project. He developed a master plan and outlined a strategy for rehousing slum dwellers in multi-story buildings and utilising the rest of the land for commercial and industrial purposes.
• Despite these efforts, opposition from various quarters—particularly from the residents, local politicians, and activists—stalled the project. The residents demanded more clarity on housing rights and voiced concerns about losing their livelihoods during the redevelopment.
6. 2011 – Failure of the Initial Plan
• By 2011, it became clear that the 2007-2009 global tender process had failed. No significant progress was made, largely due to legal battles, difficulties in acquiring land, and the inability to satisfy the demands of Dharavi’s complex socio-economic fabric.
7. 2014 – New Efforts under Chief Minister Devendra Fadnavis
• After the Bharatiya Janata Party (BJP) came to power in Maharashtra, new Chief Minister Devendra Fadnavis revived the Dharavi redevelopment project in 2014.
• The Government amended the original plan and restructured the project, focusing on dividing Dharavi into different zones to make it more manageable for developers.
• In 2018, the Maharashtra Government approved a fresh plan, and bids were invited again. However, this, too, did not gain much traction due to various political and economic hurdles.
8. 2022 – Adani Group’s Involvement
• In 2022, the Maharashtra Government invited fresh bids for the Dharavi redevelopment project, this time including the entire 240 hectares of land as one entity, hoping to attract more developers. The Adani Group won the bid to lead the redevelopment effort with an investment of over Rs 5,069 crores.
• The Government also established the Dharavi Redevelopment Authority (DRA) to oversee and manage the project, ensuring that it progresses smoothly.
9. 2023 – New Developments
• The plan now promises to rehouse nearly a million Dharavi residents in modern, multi-story buildings while turning the area into a commercial hub. The project is one of the largest slum redevelopment efforts in the world, with significant expectations on improving Mumbai’s urban infrastructure.
Challenges Throughout the Years:
• Land Ownership Issues: The fragmented and complex ownership of land in Dharavi, with both private and Government stakeholders, has delayed the project for years.
• Resident Consent: Many residents, small businesses, and artisans feared displacement and loss of livelihood. Ensuring their rights and building trust has been a major challenge.
• Political and Bureaucratic Delays: Changes in state governments and differing political agendas have also caused delays.
• Economic Challenges: The project has often faced issues due to the high financial investment required, particularly for rehabilitating slum dwellers for free.
Current Status:
The Dharavi redevelopment plan represents a critical step toward addressing urban poverty and improving living conditions for a significant portion of Mumbai’s population, though its success depends on navigating the complex social, economic, and political challenges involved. The redevelopment plan seeks to address these challenges by modernising the area, improving the quality of life for its residents, and integrating Dharavi into the broader urban landscape of Mumbai.
The Dharavi Redevelopment Plan is expected to be financed through a public-private partnership (PPP) model, which means both the Government and private developers will play key roles in funding and executing the project. Here’s how the financing is structured:
1. Government Funding
• Initial Seed Funding: The Government provides initial funding for preliminary work such as land acquisition, relocation of residents, infrastructure development, and administrative costs. This is typically done by the state government (Maharashtra) in coordination with Union Government schemes.
• Incentives and Subsidies: To attract private investors, the Government often offers subsidies, tax breaks, and incentives such as higher Floor Space Index (FSI) to make the project commercially viable for developers.
2. Private Investment
• Developer Investment: Private developers, such as the Adani Group (which won the recent bid for the project in 2022), will be the primary financiers of the construction phase. They are expected to invest in building the housing units, commercial spaces, and upgrading infrastructure.
• Return on Investment (ROI): Developers can recoup their investments by selling or leasing commercial spaces, market-rate housing, and other developed properties that will be part of the project. In exchange for building free housing for slum dwellers, developers get land for high-end residential and commercial developments.
3. Sale and Lease of Commercial Properties
• The developers will be given a portion of land for commercial development, which can include malls, office spaces, luxury apartments, and other facilities. The sale and leasing of these commercial properties provide a significant source of revenue.
• The attractiveness of Dharavi’s location—being in the heart of Mumbai near key business districts—makes this commercial development highly lucrative.
4. Cross-Subsidisation
• Affordable Housing: Part of the housing provided will be affordable housing for the current Dharavi residents (free or heavily subsidized for those who qualify). The cost of building these units is subsidized by the revenue generated from the sale of premium residential and commercial units.
5. Public Sector Loans and Bonds
• The Government may raise funds through municipal bonds or loans from public sector banks to finance large-scale infrastructure projects (roads, drainage, sewage systems) that the private developers may not be willing to cover fully.
6. International Financing & Multilateral Agencies
• Given the scale and social impact of the Dharavi redevelopment, international financial institutions such as the World Bank or the Asian Development Bank (ADB) could be approached for loans or grants, particularly for infrastructure and social welfare aspects.
7. Corporate Social Responsibility (CSR) & Social Impact Bonds
• Some companies may invest in the project as part of their Corporate Social Responsibility initiatives, focusing on improving living conditions, healthcare, or education for Dharavi residents.
• Social impact bonds could also be issued, where investors are repaid based on the achievement of social outcomes, such as improved housing or healthcare for Dharavi residents.
The Dharavi Redevelopment Plan’s financing relies on a mix of Government funds, private investments, and potential international or public sector loans. The commercial viability of the project for developers is key, as they will be motivated by the revenue from commercial real estate. Meanwhile, the Government’s role is crucial in facilitating initial investments, resolving legal issues, and providing the necessary infrastructure and subsidies.
Thus, The Dharavi Redevelopment Plan is now at a critical juncture with the involvement of the Adani Group, and the Government appears to be pushing for its rapid implementation. However, given the history of the project, much depends on resolving land issues, obtaining resident cooperation, and navigating the political and economic landscape.
The redevelopment plan has been called a litmus test for the effectiveness of slum rehabilitation and urban renewal efforts in India.
The Dharavi Redevelopment Project is one of the largest urban renewal efforts in the world, involving the transformation of around 240 hectares (600 acres) of prime land in the heart of Mumbai. This land development aspect is central to the plan’s financial model and execution, which includes building new housing for slum dwellers, creating commercial spaces, and upgrading infrastructure. Here are the key details of land development under the project:
1. Total Area and Zoning:
• Dharavi spans about 240 hectares, one of the most densely populated slums in the world.
• The land has been divided into multiple sectors or zones for redevelopment. Initially, in the 2007 plan, it was divided into five sectors, but in the latest tender (2022), the entire area was consolidated into a single sector to simplify development.
• The land is being developed into a mix of residential, commercial, industrial, and public spaces.
2. Land Use Allocation:
The land will be divided into different categories for development purposes:
• Residential Development: A significant portion of the land will be used to build multi-story residential towers to accommodate the existing residents of Dharavi, providing them with free or heavily subsidized housing.
• Commercial and Industrial Development: Developers will be allowed to create high-end commercial and industrial real estate, such as office complexes, retail malls, and other facilities. This will help finance the free housing component through sales or leasing.
• Public Spaces and Infrastructure: Part of the land will be allocated for public infrastructure like roads, schools, hospitals, parks, and community spaces. Improved access to essential services is a key focus of the project.
• Open Spaces: Public parks and recreational spaces will be developed as part of the urban planning effort to provide a better living environment for the residents.
3. Rehabilitation of Existing Residents:
• The primary goal is to rehouse over 68,000 families living in Dharavi in modern apartments. The new housing units will be multi-story buildings designed to replace the current makeshift housing.
• Each eligible family will receive a free housing unit of approximately 300 to 350 square feet. These buildings will be developed using modern construction methods, with proper access to utilities like electricity, water, and sewage systems.
• The rehabilitation is expected to take place in-situ (on the same site where residents currently live), but some residents may be relocated to nearby temporary housing while their new homes are built.
4. Commercial and Industrial Spaces:
• Dharavi is home to thousands of small-scale industries, especially in sectors like leather goods, pottery, textiles, and recycling. These industries are integral to Dharavi’s economy, and the plan includes provisions to integrate these informal industries into the formal economy.
• New industrial and commercial zones will be created within Dharavi to allow these businesses to continue operating in better, more hygienic, and regulated spaces. This includes the construction of industrial workshops and marketplaces.
• The plan also allows developers to build premium commercial real estate to sell or lease for offices, retail outlets, and other high-value uses. The revenue generated from these commercial projects will help fund the redevelopment of the slum areas.
5. Floor Space Index (FSI) Incentives:
• Floor Space Index is a critical element in the Dharavi Redevelopment Project. FSI determines the total built-up area that a developer can construct on a plot of land.
• The Government has provided an increased FSI for the Dharavi redevelopment to make the project more attractive to private developers. An FSI of 4 or more is likely to be offered, meaning developers can build up to four times the plot area in terms of floor space.
• This higher FSI allows developers to create taller buildings and denser construction, maximising the number of residential and commercial units they can build on a given plot of land.
6. Land Ownership and Acquisition:
• Land Ownership Issues: Dharavi has a complex ownership structure, with land owned by both private individuals and the Government. A significant portion of the land belongs to the Maharashtra Government and Union Government agencies, while some parts are privately owned.
• The redevelopment authority, in this case, the Dharavi Redevelopment Authority, is responsible for resolving ownership disputes, acquiring land as needed, and transferring development rights to private developers.
• In many cases, private developers will get land at concessional rates or in exchange for building free housing for slum dwellers. In other cases, developers are expected to compensate private landowners.
7. Financing and Sale of Developed Land:
• Private developers, such as the Adani Group, are responsible for the construction of free housing for Dharavi’s residents. In return, they are allowed to develop and sell portions of the land as premium residential or commercial properties.
• The commercial viability of this land, given its prime location in central Mumbai, is what makes the project financially feasible for private developers. The land value in this area is extremely high, making the sale of commercial spaces a significant revenue stream.
8. Connectivity and Infrastructure Development:
• The redevelopment plan also includes the creation of new roads, better connectivity to the Mumbai suburban railway network, and other transportation infrastructure, helping integrate Dharavi with the rest of Mumbai.
• Public utilities, such as water, sewage, electricity, and broadband infrastructure, will be upgraded to modern standards.
9. Relocation and Temporary Housing:
• During the redevelopment, some residents may need to be relocated temporarily. Transit camps or temporary housing will be constructed nearby or within the same area to accommodate these residents until their new homes are ready.
10. Phased Development:
• The redevelopment is likely to be carried out in phases over several years. This allows for the systematic rehousing of residents, the construction of infrastructure, and the development of commercial properties without displacing a large number of people at once.
The land development in the Dharavi Redevelopment Project is a highly complex endeavour, balancing the needs of existing residents with the commercial interests of developers and the overall vision of modernising Mumbai’s urban landscape. By dividing the land into residential, commercial, industrial, and public-use spaces, the project aims to create a self-sustaining urban zone that improves living conditions while generating economic opportunities for both residents and businesses.
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