- Adani aims to redevelop a major Indian slum in a ‘colossal’ test
- Hindenburg implications, political unrest, residents’ anxieties weigh
- Legal battle between Dubai consortium, Adani adds new twist
- Adani argued that SecLink’s case should be dismissed
MUMBAI, Aug 28 (Reuters) – Indian billionaire Gautam Adani’s plan to house one million people living in one of Asia’s biggest slums is fueling concerns among residents about his ability to deliver amid major financial setbacks and allegations , which Prime Minister Narendra Modi’s allies have afforded him favorable treatment.
The Dharavi slum, about three-quarters the size of New York’s Central Park, featured in Danny Boyle’s 2008 Oscar-winning film The Millionaire Slum. Its open sewers and communal toilets, near Mumbai’s international airport and skyscrapers housing foreign companies stand in contrast to India’s development boom.
Adani is spearheading plans to redevelop Dharavi after the Maharashtra state government in July approved its bid for a $614 million contract to overhaul the slum, which is known for its leather goods industry, after years of failed attempts.
Adani Group aims to demolish what it describes in legal documents as an area with “unsanitary, deplorable” conditions and build new towers on government land to accommodate residents and their businesses. Consultancy Liases Foras estimates that Adani could invest up to $12 billion in redeveloping Dharavi and in return receive development rights that could bring in up to $24 billion in revenue.
Only those who already lived in Dharavi before 2000, mostly ground floor dwellers, will get free homes under the redevelopment. About 700,000 mezzanine and upper floor dwellers are considered ineligible by the government and will be offered homes up to 10 kilometers away, which they say could require them to pay upfront costs or higher rents.
The overhaul, due to begin around September, comes at a tumultuous time for Adani. The tycoon was the world’s third-richest man until January, when – despite his denials – allegations of wrongdoing by US short seller Hindenburg wiped $150bn off his group’s market valuation.
In interviews with Reuters, some Dharavi residents cited the billionaire’s financial problems as a reason for their concerns.
A new threat to Adani’s plans is a legal challenge from rival SecLink Technologies Corporation. The Dubai-based consortium, which claims to be backed by Bahrain’s royal family, has alleged that Maharashtra wrongfully canceled an initial 2018 auction for which SecLink was the highest bidder and restarted the process with new terms in 2022 . for Adani to win, according to court documents reviewed by Reuters.
The current state government, ruled by Modi’s Bharatiya Janata Party (BJP) and its allies, is contesting the case. Last month, a Mumbai court allowed SecLink to add Adani to its suit, forcing the conglomerate to defend its position before judges.
In an 809-page document last month challenging Adani and the state, first reported by Reuters, the eight-member consortium said Maharashtra’s modified bidding process was “politically motivated” and “aligned with the Adani Group”.
Those changes, according to SecLink, include doubling the applicant’s required net worth to $2.4 billion and limiting consortium members to two instead of the previous eight.
Adani, in a non-public presentation to the judges ahead of an Aug. 31 hearing, denied SecLink’s claims and argued the case should be dismissed in the interests of development.
Maharashtra said in a statement that SecLink’s claims were “baseless” and that officials followed “proper process” in canceling the earlier auction, according to a Reuters review of non-public documents related to the case. She said she restarted the process as she added another plot to the project after the auction closed in 2018.
Adani Group, SecLink, Maharashtra Chief Minister Eknath Shinde and Modi’s office did not respond to questions from Reuters for this report.
Both Modi and Adani hail from the western state of Gujarat. Their opponents and critics often argue that the meteoric rise of Adani’s port-to-energy empire is due in part to its close relationship with, and favorable treatment by, the BJP-led administrations of Modi and his allies. The duo have repeatedly denied wrongdoing.
The opposition Congress party has seized on the Dharavi row to put pressure on Modi and the BJP ahead of the 2024 national elections, accusing the Maharashtra government of favoring Adani.
“The fact that it is related to Adani will automatically lead to a political controversy,” said Sandeep Shastri, director of academics at India’s NITTE Education Trust.
The Hindenburg report and subsequent regulatory scrutiny of Adani have sown distrust among some in Dharavi, according to representatives of thousands of local families and 25 other residents and business owners interviewed by Reuters.
“People have doubts about Adani’s image after the Hindenburg incident. There are reliability issues,” said Rajendra Korde, president of the Dharavi Reconstruction Committee, which is calling for a public consultation.
In early August, around 300 opposition supporters and residents gathered in Dharavi to object to Adani’s involvement. Some carried banners showing Adani’s face with a red cross, shouting “Remove Adani, Save Dharavi”.
Many told Reuters they were troubled by Adani Group’s financial setbacks, including the collapse in its valuations.
“If something like this happens again and if he fails to complete the project, where will people like us go,” said Radha Pawar, a 50-year-old cleaner at the airport.
A ‘COLLOSSIBLE’ CHALLENGE
Adani, 61, said in a video address in July that the group had raised funds since the Hindenburg report and that investors supported its management and capital allocation practices.
Still, in a blog post last month, Adani admitted that rebuilding Dharavi posed “colossal” challenges – although it hoped the area would produce “millionaires without the prefix pauper” in the future.
According to the plan, the tycoon will have to create larger apartments of 300-350 square feet, with the state recommending fittings from foreign glass brands such as France’s Saint-Gobain.
SVR Srinivas, who heads the Dharavi Redevelopment Authority, said efforts would be made to minimize disruption.
But residents remain nervous.
Mohammad Hasmat Ullah has lived in Dharavi since 1995, but runs an embroidery business from a rented upper floor, making his place ineligible for 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 Ulla, 44, sitting in his workshop, which is reached by a narrow, steep staircase.
“If Adani gives us a place to work and stay, that’s good. Otherwise, we will be forced to return to our village.”
Reporting by Dhwani Pandya and Aditya Kalra; Additional reporting by Arpan Chaturvedi and Francis Mascarenhas; Editing by David Crawshaw
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