Delhi Development Authority (DDA) is firming up an elaborate plan for slum redevelopment projects in the capital. It has appointed consultants to prepare reports on the redevelopment of 30 slum clusters.
The developer is expected to build houses for the slum dwellers and in return gets a portion of the total space for development which it can sell at market rates. The developer gets higher floor area ratio (FAR), i.e., permission to build more floor area on a piece of land in a slum redevelopment project, and thus books higher margins in these projects.
DDA vice chairman Ashok Kumar said, “We will invite private developers to take up slum redevelopment projects once we receive the consultants’ report. A lot will depend on the viability of the projects. In cases where a cluster is not viable on its own, we may consider clubbing two or three clusters”. DDA has appointed a handful of consultants for different slum clusters and expects them to submit reports in a month or two.
Delhi has around 900 slum clusters housing almost a fifth of its population. The initiative to redevelop 30 clusters is a major task for the government and urban development agencies. This is the first time the Delhi government is going to involve private developers in these projects. Several real estate firms, including India’s largest real estate developer DLF, Omaxe and Raheja Developers, have shown interest in slum redevelopment projects and are waiting for the government’s nod.
The slum redevelopment projects in the capital will be on the lines of similar projects being undertaken in Mumbai’s Dharavi or other slum areas. Many realty firms, including HDIL, Akruti and Orbit, have made fortune through slum redevelopment projects in Mumbai. Access to cheap and strategically located land is the biggest advantage in such projects, which gives developers a margin of as high as 80%, compared to 35-40% in other realty projects.
As against Mumbai where the slum clusters are spread out in size, in Delhi the size of the slums are small and are therefore relatively less attractive. Nevertheless, Delhi’s slum redevelopment projects too are likely to offer high margins and thus attract private developers’ interest.
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