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US firm exits Dharavi project citing delays

US firm exits Dharavi project citing delays

Bangalore: In what could worsen the much-delayed Dharavi redevelopment project, California-based real estate firm Pacifica Companies Llc has said it doesn’t want to be a part of the Rs15,000 crore slum project in Mumbai any longer.

With the exit of the Pacifica-led consortium, which has a memorandum of understanding (MoU) with Mumbai-based Neptune Developers Ltd and Sindhu Resettlement Corp. Ltd, only six consortia remain in the fray to bid for the project, of the original 14.

Lehman Brothers Holdings Inc., Dubai’s Limitless and Singapore’s Capitaland Ltd are among other international firms that opted out of the bid over the past year.

Pacifica, in a recent letter to the Dharavi Redevelopment Authority, has said it wants to terminate the MoU because of the delays, said a senior official at the authority.

“Pacifica, like the others, was worried that the Dharavi project would never take off," said the official, who didn’t want to be named because of the sensitive nature of the project. “The problem is, with only six teams of bidders, the government may have to float fresh tenders, which means a further delay."

The Dharavi project primarily looks at redeveloping the 535-acre shanty town in central Mumbai by relocating around 80,000 slum dwellers and developing commercial buildings for sale.

Nayan Bheda, managing director of Neptune Developers, said Pacifica feels that instead of parking its money on a project that may not take off, it could look at other investments. “But we are still hopeful that we can persuade Pacifica and bid for the project," he said. Neptune has filed a draft red herring prospectus ahead of an initial public offering and Dharavi is one of the largest projects in its kitty.

Pacifica could not be reached for comment.


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