Bangalore: The economic slowdown and liquidity crunch has resulted in a significant change in the contours of some consortia bidding for the Rs15,000 crore redevelopment project of Dharavi, Mumbai, which is Asia’s biggest slum, even as a few others reconsider their participation in the project and several have withdrawn from it altogether.
In one new partnership, Mumbai-based developer Akruti City Ltd has allied with DLF Ltd after Dubai-based real estate company Limitless Llc. recently pulled out of the Akruti-Limitless consortium.
“We have informed the Dharavi authority that DLF has replaced Limitless as our partner... Both DLF and Akruti were part of different teams earlier, but now we have decided to form a joint venture (JV) for this particular project,” said Hemant Shah, chairman, Akruti. Executives at DLF didn’t respond to telephone calls and email asking for comment. Gautam Chatterjee, chief executive officer of the Dharavi Development Authority (DDA), said the agency had asked Akruti to send a formal, written confirmation on the new partnership.
Bidders started making presentations on their master plan for Dharavi’s redevelopment to DDA, the agency in charge of the project. Originally, 19 consortia were shortlisted for the project. Since then, several have opted out. The Larsen and Toubro Ltd (L&T) and Godrej Properties Ltd consortium is one of those that has pulled out. An L&T spokesperson declined to comment.
Potential Group, a Canada-based real estate firm, is also out of the project. The company didn’t respond to an email sent on Wednesday, asking for comment.
The consortium of Mumbai-based realty firm Runwal Group and Singapore’s Capitaland Group is still undecided. “Whether we are a part of the project is under consideration... There are multiple factors governing our decision,” said Sandeep Runwal, director, Runwal Group.
“The time is not conducive for a huge project such as Dharavi. Most developers have cash problems and Dharavi is an expensive project and it is difficult for even bigger players to make such commitments now,” said a Mumbai-based developer, who has bid for the project and is going ahead with it because he has a strong financial partner. The developer didn’t want to be identified.
On Tuesday, two consortia made presentations to DDA; one, a consortium led by Emaar MGF Land Ltd and the other a JV between DB Realty Ltd and its subsidiary Conwood Agencies Pvt. Ltd. “We made a 220-slide presentation in which nearly 20 consultants were involved, some of them international... Many of the teams are hesitant in going forward now and I am guessing not more than five-six teams will finally end up making the presentations,” said Shahid Balwa, director, DB Realty.
The status of the bid of a JV between Mumbai’s Housing Development and Infrastructure Ltd (HDIL) and investment bank Lehman Brothers Holdings Inc. is also unclear. DDA has asked HDIL about its plans to go ahead now that its partner has filed for bankruptcy.
Executives at HDIL didn’t respond to phone calls and an email asking for comment.