The global tenders for selection of a lead partner to redevelop one of Asia’s largest slums, Dharavi, was floated on Friday. The contract to redevelop Dharavi will be awarded to the one who will bid above the base price of Rs 3,150 crore. That apart, there exists an equity of Rs 400 crore for the Special Purpose Vehicle. The State government had earlier announced that it will float an SPV for the redevelopment of Dharavi, if the lead partner constitutes SPV with 80 per cent equity (Rs 400 crore) and the State holds 20 per cent equity (Rs 100 crore). The previous round of global tenders was floated in January 2016. However, there was no response to them.
According to the tender, the SPV will have to construct free housing for eligible slum-dwellers and occupants. It is also required to take care of amenities and infrastructure. In lieu of this, the SPV company will be entitled to construct free sale area to sell in the market. The floor space index is four for the project. The proposed completion period for construction of rehab, renewal, amenities and infrastructure is seven years from the signing of the development agreement.
The total cost of redeveloping Dharavi has been estimated at Rs 20,000 crore. However, the base price for the tender is Rs 3,150 crore. SVR Srinivas, the Chief Executive Officer and Officer on Special Duty, Dharavi Redevelopment Project, said, “We do not require Rs 20,000 crore in the initial stage. We did our calculation and realised that to start the project we would require the amount mentioned in the global tender and kept it as our base price.”
According to a senior official, the chief reason behind the failure of the previous tender, in spite of several extensions, was the mention of an amount as huge as Rs 20,000 crore. “The projects spans over several years, why would anyone like to bid such a huge amount on it. getting investors to put such a big amount on a project is a task. Once the project starts, money will keep coming in.”