Dharavi Redevelopment - Incentive FSI of 1.33 for Rental Housing Amid Legal Hurdles on Salt Pan Land

Overview of Dharavi Redevelopment Incentives

In the ongoing redevelopment of Dharavi, the state government is addressing legal challenges surrounding the availability of salt pan land by offering developers an incentive in the form of Floor Space Index (FSI). Specifically, an FSI of 1.33 will be provided for the saleable components of the project in exchange for constructing rental housing for ineligible residents of Dharavi.

Alternative Land Purchase for Rental Housing

Due to the litigation involving the 246 acres of salt pan land, only 50 acres are immediately available for the project. The state housing department has allowed the Dharavi Redevelopment Project Private Ltd (DRPPL) to purchase land outside the Dharavi Notified Area (DNA) for rental housing purposes.

According to a newly issued government resolution (GR), developers are encouraged to acquire land within a 10-kilometer radius of Dharavi. If such land is unavailable, construction can proceed within the larger Mumbai Metropolitan Region (MMR).

Legal Hurdles on Salt Pan Land

The lessees of several salt pans have challenged the government's decision to transfer land for Dharavi’s redevelopment. Most of the salt pan land remains under litigation, with disputes regarding ownership between the central and state governments. Among the contested areas are key locations like Arthur Salt Works in Kanjurmarg (120.5 acres), Jenkins Salt Works in Bhandup (77 acres), and Jamasp Salt Works in Mulund (58.5 acres). While the central government approved the transfer of these salt pans to the state, the project's implementers have been met with delays due to ongoing disputes.

DRPPL Structure and Developer Ownership

A Special Purpose Vehicle (SPV) has been formed under the Dharavi Redevelopment Project Pvt Ltd (DRPPL) to oversee the project. Adani Realty, the lead developer, holds an 80% equity stake in this SPV, with the remaining 20% owned by the state government. The Slum Rehabilitation Authority (SRA) is also involved in facilitating the execution of the redevelopment, particularly the provision of rental housing for residents not eligible for direct housing benefits. The state government estimates that the ineligible households in Dharavi number between 300,000 and 400,000.

Facts and Figures:

• Total Salt Pan Land: 246 acres
• Available for Redevelopment: 50 acres (due to litigation)
• FSI Incentive for Developers: 1.33
• Key Salt Pan Areas: Arthur Salt Works (120.5 acres), Jenkins Salt Works (77 acres), Jamasp Salt Works (58.5 acres)
• Estimated Ineligible Households: 3-4 lakh (300,000-400,000)
• Lead Developer Equity: Adani Realty (80%)
• State Government Equity: 20%

The redevelopment project is moving forward despite significant legal challenges, with the state adopting a flexible approach by permitting land purchases outside the core Dharavi area for rental housing.