Mumbai: The Maharashtra government has agreed to share its profit from the ambitious Dharavi redevelopment project with the railways, which have given a 45-acre piece of their land towards the project. According to the formula, the railways will get around 0.21% as their share. The availability of railway land could turn out to be an important factor in putting the stalled makeover project back on track.
In case the project is stalled again for any reason, the state government and railways have agreed on a minimum amount of ₹3,800 crore as the cost of 45-acre plot that is going to be used for the integrated development of a 640-acre project that aims to transform India’s largest slum pocket into a plush township, officials from state housing department confirmed.
The Railway Land Development Authority (RLDA), a statutory authority responsible for creating assets for the railways, was insisting on a profit share in the project in return for providing its prime land. The state government, on the other hand, was trying to convince the railways to accept a lump sum for the property, the housing officials said.
The state government has already paid ₹800 crore as advance to the RLDA on June 15, 2019, and a further sum of ₹200 crore will be paid within six months from the date of signing the definitive agreement between the state and RLDA. The terms and conditions of the fresh agreement are also being made part of the tender floated by the Slum Redevelopment Authority (SRA).
“RLDA will share profit made from the project based on the ratio of land. The area of the railway land parcel has been given twice the weightage in comparison to the area of Dharavi in the fresh formula determined between the state government and RLDA,” said a senior housing official.
For the project, the railways will have to transfer the 45-acre piece of land adjoining the Dharavi Notified Area through RLDA for a lease of 99 years.
“In case the project does not go ahead or only the rehab component is constructed or the project is stalled in between, the state government will indemnify RLDA for an amount of ₹2,800 crore. The upfront payment of ₹1,000 crore shall be excluded for the above purpose. The special purpose vehicle (SPV) shall indemnify to the Government of Maharashtra and DRP/SRA towards any such amount that will be finalized as per the terms and conditions of the Definitive Agreement,” states the tender floated for the Dharavi redevelopment project recently.
“The rehabilitation of slums on railway land shall be carried out as part of the Dharavi Redevelopment Project,” it adds. It is estimated that there are approximately 4,818 slum dwellers on railway land who need to be rehabilitated.
The tendering process for the project has failed multiple times in many years for several reasons such as the mixed usage of land in Dharavi, the eligibility criteria for rehabilitation tenements and market slowdowns among others.
Last month, the state cabinet approved the setting up of an SPV, which has been formed for a specific, well-defined purpose — mainly for infrastructure and redevelopment projects. In this SPV, the state government will have a 20% stake and offer 80% to the international consortium that wins the bid to redevelop the area.
According to a GIS-based biometric and socio-economic survey carried out by the Maharashtra Social Housing and Action League (MASHAL), a Pune-based NGO, in 2007-08, there are approximately, 49,643 slum dwellers (39,208 residential and 10,435 commercial) and 9,522 “renewal tenements” in chawls (6,981 residential and 2,541 commercial) in Dharavi.
