Bangalore: Housing Development and Infrastructure Ltd (HDIL) has started resettling people living in the slums bordering the Mumbai airport, clearing the way for Mumbai International Airport Ltd (MIAL), the holder of the land, to develop the area.
This is the biggest project for HDIL, India’s largest slum developer, and entails the rehabilitation of nearly 85,000 familes from the encroached areas surrounding the airport to other locations in Mumbai.
Initially about 700 families will be relocated to the new tenements at the Kurla Premiere compound and allotment letters have already been issued, HDIL said in a statement to the Bombay Stock Exchange on Monday. Around 22,000 families will be shifted over the next six-eight months, the company said.
Over the past two years, HDIL has sold transfer of development rights (TDRs) of 10-11 million sq. ft from the MIAL project, at an average cost of Rs 2,500 per sq. ft. A TDR gives a real estate company additional development rights for redevelopment of slums or undertaking rehabilitation projects, which it then trades for a profit.
“This momentum gives a lot of comfort to our shareholders and investors and also improves the visibility of TDRs, hence improving cash flows as well,” said Hari Prakash Pandey, vice-president of finance, HDIL.
The shifting of families indicates visibility on the remaining phases, for which HDIL already possesses most of the required land, Mumbai-based brokerage Anand Rathi Financial Services Ltd said in a note on Monday.
“It could now look at developing such land parcels. Along with TDR generation, the shifting will also release free sale area,” the note said.
The company has invested an additional Rs 1,200 crore in buying land parcels that will be used in the future for the same project, according to analysts.
While HDIL had started construction of new housing units a few months ago, the project was in limbo as the state government wrestled with the issue of the eligibilty critieria for the project.
The state government finally decided that those families who had been been residing in the slums prior to 2000 can be relocated. The decision will ensure that nearly 90% of the families in the slum will be eligible for the benefits of the project. A long-term policy stance needs to be taken on the eligibility critieria for such projects, said Pandey.
HDIL has invested around Rs 4,500 crore in land acquisitions for slum rehabiliation projects across India and has built about 33,000 units.