Adani final go-ahead for Dharavi project held up after UD concerns

Mumbai: Five months after the state cabinet approved Adani Realty’s bid for the Dharavi Redevelopment Project (DRP), the latter has still to take off, as the government has not issued a final Letter of Award (LOA). The urban development department has expressed reservations on the concessions in the indexation of TDR given to Adani as well as the order to city builders to buy 50 percent of their TDR from the DRP even before the project commences.

The Maharashtra cabinet awarded the DRP bid to Adani Realty in December 2022. Despite the pending court case in this matter (see box), the cabinet decided to go ahead, as the Bombay high court had not ordered a stay. Bids for the DRP opened in November, and Adani Realty, with a bid of ₹5,069 crore, was declared the winner. The DLF group, another frontrunner, had submitted a bid of ₹2,025 crore. Significantly, no other company was eligible for the final bid.

“The government wants to ensure that all the orders related to concessions for the project are in place before the LOA is issued, and has thus sent the file to the revenue and urban development departments,” an officer from the housing department told HT. “These issues need to be clear, because once the LOA is given, the bidder has to follow the timeline and can be heavily fined for missing deadlines.”

The urban development department (UDD) has raised questions on the TDR concessions given to Adani—for one, the fact that there will be no indexation of TDR generated from this project. To put it simply, if 100 square feet TDR is generated, its value is lower in, say, Borivali than in South Mumbai. But for the DRP, a concession has been offered so that Adani can get equal value anywhere for the TDR. “The UDD has objected to this, as per the existing rules, there is no provision for concessions in indexation,” said the officer.

The tender documents also say that builders in Mumbai and suburban areas will have to buy 50 percent of their TDR from that generated in the DRP, which means that the successful bidder (in this case Adani) will be in a position to monetise this TDR. “How can the government issue the order before the project commences?” said the officer. “It will affect the TDR market. Such orders can be issued over time once the Dharavi TDR starts generating.”

Valsa Nair-Singh, additional chief secretary, housing department, said the government was in the final stages of issuing a GR and it would be out soon. When contacted for a response to the UDD’s stand on the TDR concessions, an Adani spokesperson said, “We are unaware of any matter.”