The Dharavi dilemma
Oct 25 2013
Slum rehab projects are more of a challenge than opportunity for real estate developers
Small wonder then, there are both challenges and opportunities for real estate companies executing slum rehab projects. Obtaining clearances, consent of residents, providing alternative accommodation to slum dwellers while redevelopment work is under way are only a part of the long-drawn gameplan. Identifying the eligible slum dwellers for allotment of living spaces is another big hassle. Only cash-rich developers can succeed, as such projects have to be executed on large scale, say experts.
Developers actively involved in slum rehabilitation work say project execution is extremely difficult. However, it is also true that a lot of money is to be made from such projects, because they enjoy higher higher FSI.
Hariprakash Pandey, vice-president finance of Mumbai-based Housing Development and Infrastructure (HDIL) told FC Weekend, “The most difficult part of a slum project is obtaining approvals and consent of the residents. Also, these projects need a lot of working capital.”
His company is actively involved in large-scale slum redevelopment, including the largest rehab project involving almost 85,000 dwellers under the expansion-and-modernisation plan of Chhatrapati Shivaji International Airport. Around 33,000 housing units are already under construction for the MIAL slum rehabilitation project.
Pandey said identifying the eligible tenants for rehabilitation is a challenge, as many don’t have proper proof of identity. “It is not enough to only construct the building. Other infrastructure like roads, schools and hospitals and suitable livelihood opportunities too has to be created.”
Builders want the government to be transparent about infrastructure development, without which projects turn unviable.
According to real estate consultant Liases Foras, construction area available in Mumbai is 74 sq km, of which 30 sq comprises slums. The consultancy’s chief executive Pankaj Kapoor says almost half of Mumbai’s population resides in slums, and rehabilitation is a big task. While some rehabilitation work is already underway, a lot more needs to be done to make the city slum-free.
In Mumbai, large parcels of slums are spread across Dharavi though there is no clear estimate on the number of dwellers. Some sources suggest that anywhere between 300,000 and a million people live across the sprawl spread over 500 acres, with an average density of 600 to 2,000 people per acre.
Five years ago, the government had accepted a private consultant’s advice for redeveloping Dharavi in five zones, with each as a separate township, since slum rehab schemes do not provide civic infrastructure like wider roads and hospitals. The project has run into several hurdles since it was approved in 2004. Tenders have been called off on three occasions, owing to poor response.
Sunil Mantri, chairman and managing director at Mantri Realty, and president of National Real Estate Development Council (Naredco) said, “Still there is no clarity on the project. We hear that the government wants Mhada to execute the project, hence private participation has reduced.”
Mantri added that population density was Dharavi’s the biggest hurdle, besides its several small factories. People’s livelihood is concentrated in and around the area and they cannot be shifted without impacting their lives. Just constructing houses is not enough, he said. Yet, despite the obstacles, slum projects are highly profitable, he said.
Pandey of HDIL said slum dwellers also tend to demand higher compensation these days, as they are aware of the high profitability involved.
Meanwhile, other slums in the city’s suburbs that were relatively small have now metamorphosed into large, contiguous agglomerations, causing concern.
The Kurla-Ghatkopar belt, the Mankhurd-Govandi belt, and the Yogi and Yeoor hill slopes stretching from Bhandup to Mulund flanking the Sanjay Gandhi National Park (SGNP) on the east and Dindoshi on its west have eclipsed Dharavi, said Kapoor.
Mantri said, “We are witnessing a seismic shift. The speed of imminent urbanisation poses unprecedented planning, development and management challenges. Sustaining growth momentum and unleashing the demographic dividends of young population will need commensurate ambient conditions. Key amongst these will be well-managed cities with proper infrastructure as well as services.”
Cities, he said, are not only home to the rich, as around 75 per cent of the urban population lives in the bottom income segments, earning an average of Rs 100 per day. Addressing the demands of urban life has to be inclusive and affordable.