The Adani Group is considering investing a substantial Rs 12,000 crore for the redevelopment of Dharavi, Asia's largest slum. Adani owns 80% of the Special Purpose Vehicle (SPV), while the Maharashtra government holds the remaining 20%. The project aims to enhance living conditions, promote sustainable development, and stimulate economic growth. It is expected to serve as a model for slum redevelopment on a global scale. Additionally, the transformation of Dharavi includes a Metro rail project linking it to Mumbai and a new road connecting it to the Bandra-Worli Sea Link. The first round of additional funding is expected in 2024.
The Adani Group is actively considering the infusion of a substantial sum, amounting to Rs 12,000 crore, for the commencement of redevelopment activities in Mumbai's Dharavi, which stands as Asia's largest slum. On July 14, the Maharashtra government approved the Adani Group to embark on the ambitious transformation of Dharavi, a sprawling 590-acre area characterized by a complex network of irregular structures, fragile tenements, and decrepit buildings, housing over 900,000 residents and numerous small businesses. To facilitate this colossal undertaking, a SPV was formed in September, with the Adani Group holding an 80 percent ownership stake and the Maharashtra government owning the remaining 20 percent.
Intensive discussions and negotiations have since taken place, both within the organization and with state authorities, including the Mumbai Metropolitan Region Development Authority (MMRDA), resulting in an estimated investment of about $1.5 billion, or approximately Rs 12,500 crore. Currently, the Adani Group has approximately $8 billion in its financial reserves. The initial stages of the redevelopment project will be financed through internal funds, with the possibility of raising an additional $2 billion through the sale of equity stakes in specific group companies at a later stage. The Adani Group may use 15-20 percent of its cash reserves to initiate the redevelopment, with potential external financing options depending on the group's and the state government's consensus.
The comprehensive redevelopment project, spanning seven years, is estimated to cost $4–5 billion. To commence construction and logistical operations, around Rs 12,500 crore will be allocated to the SPV before the project begins. An authentication survey is ongoing to verify ownership rights within the slum structures, and a master plan for project implementation is awaiting joint approval from the state government, MMRDA, and the Adani Group. The Adani Group will construct new transit tenements to relocate slum residents as part of the initiative. These tenements will be built on a 90-acre railway tract near Dadar-Matunga and another 6.91 hectares of land surrounding Dharavi. Gautam Adani, Chairman of the Adani Group, has committed to providing new homes for eligible residents.
Upon completing these preliminary procedures, the master plan for project implementation will undergo a joint approval process involving the state government, MMRDA, and the Adani Group. The first tranche of additional funds may be infused into the project between April and June 2024. Dharavi's transformation involves a Metro rail project with a station at the 'T Junction,' linking it to Mumbai via Metro Line III to Nariman Point. This rail line also connects Dharavi to Bandra Kurla Complex (BKC) and Mumbai International Airport. A new road will link to the Bandra-Worli Sea Link, ushering in Dharavi's transformation.
In summary, Adani's pioneering investment of $1.5 billion signifies the commencement of the transformative Dharavi project. This ambitious undertaking aims to enhance the quality of life for Dharavi's residents, stimulate sustainable progress, and cultivate economic prosperity within the region. The project holds the promise of becoming an exemplar for slum redevelopment, inspiring similar efforts on a global scale.
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