Devendra Fadnavis
Devendra FadnavisIANS

Dharavi, Asia's largest slum is finally set to get a makeover as the government of Maharashtra has invited global tenders to initiate the process of redevelopment. The announcement is significant with the fact that earlier governments were involved in deliberations for more than a decade. The government has set Rs.3,150 crore as the minimum stipulated bid amount for the redevelopment of the slum.

The selected lead partner is likely to form a special purpose vehicle (SPV) where it would have a contribution of 80% equity worth Rs 400 crore for the redevelopment of slum spread over 593 acres in the heart of India's commercial capital. The rest 20 percent equity will be held by the government of Maharashtra by infusing Rs 100 crore.

According to the guidelines of by the state government, the lead partner will be brought in any further investment needed for the project apart from the equity worth Rs 400 crore that would be in the form of compulsorily convertible instruments including debentures and preference shares.

The responsibility of constructing free housing for the eligible person staying in these slums and occupants including amenities and infrastructure will be given to the SPV. The SPV would be bounded by the terms and conditions finalized by the state government. A public notice will also be issued by the officer on special duty, Dharavi Redevelopment Project, that falls under the jurisdiction of the Slum Rehabilitation Authority.

However, the SPV will have the right to construct the free sale area which would be allowed to be sold in the open market. Speaking to the Economic Times, one of the people associated with the development said that "Before elections next year, the government is looking to finalize the lead partner for the much-awaited redevelopment of Dharavi." Tenders will be open between November 28 and December 28.

The industry experts believe that if the project is implemented, this would change the face of Mumbai city. Anuj Puri, chairman, ANAROCK Property Consultants said that "Dharavi redevelopment project, when completed, can change the entire real estate scenario here. Dharavi rubs shoulders with upmarket Bandra and is right next to the avant-garde Bandra-Kurla Complex. This makes Dharavi an incredibly attractive proposition for homebuyers, investors and developers alike."