Adani's bid to remake Mumbai slum spurs residents' doubts, favouritism claims

Mumbai, August 29

Billionaire Gautam Adani’s plan to rehouse a million people living in one of Asia’s biggest slums is fuelling worries among residents about his capacity to deliver amid high-profile financial setbacks and allegations that Prime Minister Narendra Modi’s allies afforded him favourable treatment.

Adani is at the helm of plans to redevelop Dharavi after the Maharashtra state government in July approved his $614 million contract bid to overhaul the slum, which is known for producing leather goods, following years of failed attempts.

Adani Group aims to demolish what it describes in legal documents as an area of “unhygienic, deplorable” conditions and build new towers on state-owned land to accommodate residents and their businesses. Consultancy Liases Foras estimates Adani may invest up to $12 billion on remaking Dharavi and in return get development rights that could yield revenue of up to $24 billion.

Only those who already lived in Dharavi before 2000, mostly ground-floor residents, will get free homes within the redevelopment. About 7 lakh inhabitants of mezzanine and upper floors are considered ineligible by the government and will be offered units up to 10 kilometres away which, they say, could require them to pay upfront costs or higher rents.

In interviews with Reuters, some Dharavi residents cited the billionaire’s financial troubles as contributing to their concerns.

A fresh threat to Adani’s plans is a legal challenge from rival bidder SecLink Technologies Corporation. The Dubai-based consortium, which says it is backed by Bahrain’s royal family, alleges Maharashtra improperly cancelled an original 2018 tender, for which SecLink bid highest, and restarted the process with new terms in 2022 so that Adani could win, according to court papers reviewed by Reuters.

Last month, a Mumbai court allowed SecLink to add Adani to its lawsuit, forcing the conglomerate to defend its position before judges.

In an 809-page filing last month challenging Adani and the state, reported by Reuters for the first time, the eight-member consortium said Maharashtra’s modified bidding process was “politically motivated” and “tailor made to suit” Adani Group.

Those changes, according to SecLink, included doubling a bidder’s required net worth to $2.4 billion and capping consortium members at two instead of eight previously.

Adani, in a non-public submission to judges before an August 31 hearing, denied SecLink’s allegations and argued the case should be thrown out in the interest of development.

Maharashtra said in a submission that SecLink’s claims were “baseless” and that officials had followed “proper process” in cancelling the earlier tender, according to a Reuters review of non-public filings related to the case. It said it restarted the process because it added another land parcel to the project after the 2018 tender had closed.

Adani Group, SecLink, Maharashtra’s Chief Minister Eknath Shinde and Modi’s office did not respond to questions from Reuters for this report.

Adani, 61, in a July video address said the group had raised funds since Hindenburg’s report and that investors supported its governance and capital allocation practices.

Still, in a blog post last month, Adani acknowledged that rebuilding Dharavi presented “colossal” challenges – though he hoped the area in future would produce “millionaires without the slumdog prefix”.

Under the plan, the tycoon will need to create larger apartments of 300-350 square feet, with the state recommending fittings of foreign glass brands like France’s Saint-Gobain.

SVR Srinivas, who heads the Dharavi Redevelopment Authority, said efforts would be made to minimiSe disruption.

But residents remain jittery.

Mohammad Hasmat Ullah has lived in Dharavi since 1995 but runs an embroidery business from a rented upper floor, making his place ineligible for a free replacement. He earns $145 a month to support his family, including seven children.

“We are worried that Adani will throw us out of here,” said Ullah, 44, sitting inside his workshop accessed by a narrow, steep staircase.

“If Adani gives us a place to work and stay, it’s good. Otherwise, we will be forced to go back to our village.”