The Maharashtra government under chief minister Prithviraj Chavan is likely to review the makeover plan for one of Asia's largest slums, Dharavi, to bring in more transparency and revenue. The government is planning to hand over the redevelopment of one sector of Dharavi, Sector 5, to the Maharashtra Housing Area Development Authority (Mhada) instead of handing out the bid for that sector to a private consortium.
Mhada can give the contract for construction in this sector to a private firm and auction the remaining land in that sector. “The state can contract work for redevelopment of one sector to a private agency in such a way that if a portion of the land is utilised for redevelopment, an equal portion is left unused and can be auctioned to earn the state more revenue,“ Chavan said , while speaking to a group of women reporters on International Women's Day.
He said that this would bring in more transparency instead of the current option of cross subsidising in which a private developer pays the state a premium and is offered incentive floor space index or built-up area in exchange for rehabilitating slum dwellers.
Initial estimates by the housing department show that the cost of construction in one sector with 9,000 slum dwellers to rehabilitate would not exceed Rs 2,000 crore, while the auction of unused land could earn the state Rs 22,000 crore.
The Dharavi redevelopment project is on shaky ground with no consensus over the eligibility of residents on one hand, and lack of enough takers for the project on the other.
The state government had granted Dharavi a floor space index of 4 as a special project, but after the initial enthusiasm, only five private developers are in the race to redevelop the five sectors of the slum.
If MHADA can redevelop this sector successfully, the state might limit the role of private consortiums in the project. “I have no problems with developers making profits. They should,“ Chavan said. “But it can't be at the cost of the state's revenue.“ The chief minister admitted that the state's housing policies have been largely unsuccessful in creating affordable housing stock. The state is now looking at unlocking the value of land and it is likely that public agencies will play a more proactive role in creating affordable housing stock.
Mhada can give the contract for construction in this sector to a private firm and auction the remaining land in that sector. “The state can contract work for redevelopment of one sector to a private agency in such a way that if a portion of the land is utilised for redevelopment, an equal portion is left unused and can be auctioned to earn the state more revenue,“ Chavan said , while speaking to a group of women reporters on International Women's Day.
He said that this would bring in more transparency instead of the current option of cross subsidising in which a private developer pays the state a premium and is offered incentive floor space index or built-up area in exchange for rehabilitating slum dwellers.
Initial estimates by the housing department show that the cost of construction in one sector with 9,000 slum dwellers to rehabilitate would not exceed Rs 2,000 crore, while the auction of unused land could earn the state Rs 22,000 crore.
The Dharavi redevelopment project is on shaky ground with no consensus over the eligibility of residents on one hand, and lack of enough takers for the project on the other.
The state government had granted Dharavi a floor space index of 4 as a special project, but after the initial enthusiasm, only five private developers are in the race to redevelop the five sectors of the slum.
If MHADA can redevelop this sector successfully, the state might limit the role of private consortiums in the project. “I have no problems with developers making profits. They should,“ Chavan said. “But it can't be at the cost of the state's revenue.“ The chief minister admitted that the state's housing policies have been largely unsuccessful in creating affordable housing stock. The state is now looking at unlocking the value of land and it is likely that public agencies will play a more proactive role in creating affordable housing stock.
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