Dharavi Redevelopment Project: Maharashtra Govt's Diwali Gift to Adani

The Maharashtra government recently made changes to the Development Control Rules (DCR) in a notification. This has caused a stir in the ongoing Dharavi Redevelopment Project (DRP) controversy.

The government's notification allows the usage of Transfer of Development Rights (TDR) without any indexation. This mandates builders to purchase the first 40% of TDR from DRP, benefiting the Adani group.

The amendment has increased the controversy surrounding the DRP. The project is now in the hands of the Adani Group. It is set to generate significant value from the TDR.

Varsha Gaikwad, the Mumbai Congress party's president, criticised the decision, calling it a "Diwali gift" to the Adani group. She had previously accused the company of a TDR scam.

The Urban Development Department of the Maharashtra government made the changes through a notification. The current rules allow for indexation in the use of TDR, but the new notification removes this limit. The change means that the entire TDR generated can be used in high-value areas like Bandra, Vile Parle, and Juhu. This also gives Adani a large, ready-made market for the TDR generated by the project. The notification also permits Adani to charge a TDR fee of up to 90% of the recipient plot's ready reckoner value. 

Before using other TDR, builders in Mumbai are required by the notification to purchase 40% of their required TDR from the Dharavi Project. This clause offers Adani a sizable, ready-made market for the TDR that the Dharavi Project will produce. Additionally, Adani is permitted by the notification to charge a TDR fee of up to 90% of the recipient plot's ready reckoner value.

According to reports, the state government had promised a concession in indexation in the Dharavi Project contract documents. However, the Urban Development Department had shown reluctance to provide this concession. The state government has now made provisions for the changes in the current rules through these notifications.

Congress legislators have criticised Chief Minister Eknath Shinde for the controversial notification.

In December 2022, the Maharashtra cabinet chose to award the DRP to Adani Realty. Despite ongoing legal proceedings, the cabinet chose to move forward as there was no stay order from the Bombay High Court. Adani Realty won the bid for the DRP with a proposal of INR 5,069 crore. The DLF group had also participated in the bidding with a proposal of INR 2,025 crore.