Real estate major DLF is drawing plans to take up slum development projects in Delhi, which, though fraught with political risks, could see business worth thousands of crores.
A senior DLF official said, “We are preparing an elaborate plan to develop slum areas in Delhi. We have received a very positive response from chief minister Sheila Dixit about it. We will shortly submit the proposal to the government”. He didn’t give details as the proposal is yet to be finalised, but said the project “is going to be big”. A DLF spokesperson, however, denied that the company is working on any such project.
As in Mumbai, where more than half the population live in slums, Delhi, too, houses a sizeable chunk of its population in these run-down places. According to Municipal Corporation of Delhi (MCD), nearly 30 lakh people (over 20%) live in slums. The city has 900-odd slum clusters, commonly referred to as jhuggis.
Bhumiheen camp and Navjivan camp at South Delhi’s Kalkaji, housing around 8,000 families each, are the bigger ones. Areas like Okhla, Mayapuri, Wazirpur Shadipur and the Trans-Yamuna, too, are home to hundreds of slums. There is no government estimate available on the area these slums occupy.
Delhi hasn’t seen any great initiative by private developers in the past for slum development. A senior MCD official blames the state government for not giving the developers the go-ahead. But now the government seems to be showing interest. And there are many incentives for developers to take the plunge.
The whole process works like this. A developer identifies a slum for the redevelopment project and approaches the government with a proposal. Once it gets government nod, the developer is expected to obtain the consent of slum dwellers. (In Mumbai, at least 65% of slum-dwellers must agree for a project to take off.). The developer is expected to provide a new dwelling unit to existing residents in the proposed apartments.
Access to cheap land gives developers a high margin. Some Mumbai-based real estate firms like Akruti City, HDIL and Orbit have made big bucks by banking on these projects. According to Mr Dutt, the return for a developer on a slum project could be as high as 80%, compared to 35-40% in ordinary projects.
One Comment
DLF has done leading role for the delhi real estate industry. This time also it is taking a little bit of risk but it has so much experience that it will adjust according to the situation.