Delhi Development Authority (DDA) has awarded Delhi’s first slum redevelopment project, worth Rs 500 cr, to a local builder, Raheja Developers, in a move that may see more such projects in the national capital resulting in better living conditions for urban poor and thousands of crores of businesses for builders.
DDA has awarded 5.22-hectare, or 13-acre, project at Kathputli Colony near Shadipur Depot in west Delhi to Raheja Developers for Rs 6.11 cr, a DDA spokesperson said. Under the scheme, the builder pays only Rs 6.11 cr—the bid amount—for the land, but has to build 2,800 homes, of 30 sq meter size each, for existing slum dwellers of Kathputli Colony named after its majority residents of puppeteers and craftsmen. In the bargain, the builder gets for commercial exploitation 10% of the total space slated for 2800 homes and also close to a hectare for high-end residential development. Therefore, the cost incurred in building 2800 homes for slum-dwellers will be offset by the sale of commercial space (office, shops) and high-end houses in the project, while land would come dirt cheap at Rs 6 cr.
DLF has recently sold 1,250 apartments in its Capital Greens project, just 3-4 kilometers from Shadipur Depot at a rate of Rs 5,677 a sq ft. Raheja Developers will have to create temporary accommodation for the slum dwellers at a piece of land close to the project site that will be given by the DDA in a month or two. The builder will be expected to build homes for slum-dwellers within two years of the allotment of the land for temporary accommodation. Usually, slum redevelopment projects offer a very high margin of 70-75% to the developers, mainly because land comes cheap even as projects are fraught with political risks. In Mumbai, developers have to get the consent of 70% of the slum-dwellers and many a time face opposition from political interests as well as voluntary organizations. In Delhi’s Kathputli Colony project, the government has already got slum-dwellers on board. And Navin Raheja, CMD of Raheja Developers, said the project is a ‘loss-making proposition’, but he has taken this up because he is engaged in a social ‘mission’ to help urban poor get homes. He estimates this project to be worth Rs 500 cr.
DDA had invited technical bids for the project over a year ago. Eight developers, including Unitech, HDIL and Raheja, met the technical qualification criteria, but only one of them submitted financial bid early this year amid cash crunch faced by most realty firms.
Unitech, country’s second largest realty firm, declined to comment on why it didn’t submit a bid.
Courtesy:- ET dt:- 06-10-09
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