The handover of the Dharavi redevelopment project to Adani Realty has been delayed due to uncertainties surrounding the calculation of Transfer of Development Rights (TDR), according to Mantralaya sources. Despite the hold-up, Adani has reaffirmed its commitment to the project. The company also raised queries regarding the government's concessions to the winning bidder, especially the TDR the project will generate and the GST compensation for Dharavi's commercial units. Officials suggest abolishing the current TDR indexation system to create a level playing field.
The planned handover of the Dharavi redevelopment project to Adani Realty has encountered delays due to uncertainties around the calculation of Transfer of Development Rights (TDR), as per inside sources from the Mantralaya. This delay comes as a result of the Dharavi Redevelopment Authority's (DRA) inability to project the amount of TDR that would be generated from the proposed redevelopment of Asia's largest slum.
A series of inquiries were lodged by Adani Realty following a meeting where the Hindenburg report was discussed. In response, the DRA was presented with 15 to 20 questions regarding diverse aspects of the project, including issues pertaining to property tax, GST, and the need for comprehensive surveys.
In an attempt to address these queries, the DRA submitted two detailed explanatory notes to the state urban development department. These notes underscored the inherent difficulties in estimating the quantity of slum TDR that the redevelopment would generate, given the considerable variables involved.
Contradicting this, the Adani Group firmly denied posing these inquiries, branding them as "sheer speculation, unsubstantiated and baseless."
Despite the delay, Adani Group reaffirmed their steadfast commitment to the project during a meeting with Mantralaya officials. The group described the Dharavi project as a flagship initiative and assured their execution. However, they did bring up questions about the government's proposed concessions to the winning bidder, particularly the TDR the project will yield, and the five-year GST compensation for commercial units in Dharavi.
The calculation of TDR is directly linked to the number of eligible slum dwellers who qualify for free housing. Therefore, a thorough survey is needed to determine the actual number of eligible slum dwellers in Dharavi. However, the initiation of this survey is contingent upon the government awarding the contract.
Upon the issuance of the award contract, a special purpose vehicle will be established. This entity, in partnership with the government, will undertake the survey, thus enabling a more accurate projection of the TDR.
In addition to these complexities, the DRA's explanatory notes touched upon the contentious issue of TDR indexation. The indexation is calculated based on the ready reckoner rate of the land. In the case of slum land, this value is typically low, resulting in a lower slum TDR cost compared to other types of TDR.
Under the current Development Control and Promotion Regulations (DCPR) 2034, all redevelopment projects utilizing TDR are required to first use the TDR sourced from the Dharavi redevelopment project.
Mantralaya sources suggested that to establish a level playing field, the current indexation system should be abolished. This would help to remove the stigma attached to slum TDR, which ranks lower than road and open space TDR. As for the GST compensation, it is set to be provided once the project is underway.
In conclusion the delay in awarding the Dharavi redevelopment project to Adani Realty underscores the intricate and multifaceted nature of slum redevelopment initiatives. It also highlights the vital importance of careful TDR estimation, equitable indexation systems, and strategic urban planning in the successful execution of such large-scale projects. It is clear that a meticulous, well-thought-out approach is required to navigate the complexities of slum redevelopment, balancing economic viability with social justice.
This story was first published in ET Realty
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