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No smooth ride for Dharavi revamp

Officials to issue global tenders, but experts say real estate market on wane, locality’s poor reputation could hurt plan

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Dharavi features a lot of mixed-use tenements, with residential and commercial structures under one roof, which will have to be taken into consideration
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A day after the special purpose vehicle for the Dharavi redevelopment plan (DRP) was announced, SVR Srinivas, chief executive officer of DRP, has said his office will come out with global tenders for the project within a few days.

Spread over 535 acres, Dharavi is the country's biggest slum, and had even floated global tenders twice in the past. But despite several extensions, it didn't find takers. This time, the DRP is hopeful, the government's active involvement would mean things are different.

"We have tried all methods, but it's a high-risk project. But with the government's direct involvement, residents are confident this time. The attempt is to ensure it's a success, so larger consortiums are being allowed to participate," said Srinivas.

However, developers aren't completely in sync with what the government is thinking. Dharavi is different from other redevelopment schemes, in the sense that it's already infamous with a negative portrayal in the minds of people. Dr Niranjan Hiranandani, founder and CMD, Hiranandani Communities, and president of National Real Estate Development Council (NAREDCO), said this reputation may be to blame for why the earlier tenders didn't elicit a positive response.

Moreover, with the real estate market not being in robust health currently, a redevelopment project of this scale may not be something most developers would be willing to take on. Even those who specialise in redevelopment aren't enthusiastic about taking on new projects in these times. A combination of market forces, business sentiment, poor economic performance have all meant the interest levels are dipping and the project may end up finding no takers yet again.

Meanwhile, the whole FSI potential of the project may also not be used, because a lot of Dharavi falls in a funnel zone, and hence, a lot of transfer of development rights will be generated. Developers say this will impact the real estate market in south Mumbai. "Flight path is a problem, full FSI might not get consumed within Dharavi, and it will also create additional TDR stock in south Mumbai's real estate. Policies on transfer of development rights, taxation structure which is prevalent at the time also need to be taken into account before one tries to work out the possible impact of TDR over stock, and how it will impact the real estate market," Hiranandani added.

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