Thursday, September 06, 2012

Slum free cities a realty ‘reality’?

While Mumbai, the host to the biggest slum in Asia still has a long way to go before it can become slum free, there are momentous changes that hold the promise of transforming India. B&E meets up with slum Developers, PE investors and of course, the government for an update!  
 
It seems Mumbai’s neighbouring city Pune is all set to religiously win the race to complete slum rehabilitation projects and hand over flats to slum dwellers free-of-cost. While slum dwellers living in Mumbai currently lack the opportunity of owning a 269 sq ft carpet area flat, slum rehabilitation projects are gaining momentum in neighbouring Pune city. There is, in fact, a lot of action taking place in slum rehabilitation in Pune with a host of small and large scale developers bringing out projects with 2 BHK and 1 BHK flats by various regional builders free-of-cost.

For builders developing slum rehabilitation projects in Pune, viability is the biggest challenge for them, opines Lalit Kumar Jain, Chairman and Managing Director, Kumar Urban Development Limited (KUL), one of the major slum developers in Pune. “In order to combat the challenge, we are in the process of meeting slum dwellers face-to-face. As part of the agreement process, the proof of their thumb impression, photo identity will be kept with Slum Rehabiliation Association and Seva Kendra people. We will also ensure safety of the slum dwellers by providing them with transit camps till the time project comes up.”

“Our project is aimed at meeting the evolving needs of slum dwellers based on the fact that we have given opportunity to slum dwellers to choose innovative 2BHK uniform flat design of their choice so that 6 to 7 people can be accommodated per flat within the SRA project.” says Jain. A major issue with Pune slum families is that it is the women who contribute to family income by washing utensils and clothes in the middle and upper middle class houses in the area. For the same, builders have charted out plans to set up separate cottage industries for men and women with a corpus to sustain it in the remaining area.

Off late, builders in Mumbai are understood to be making a beeline for developing slum projects in the city. Some of the major factors favouring developers move to slum development projects in Pune are cheap entry capital and too steep clear land costs in Mumbai. “Indiareit is close to investing Rs.20-30 crore in two slum redevelopment projects in the city”, says Ramesh Jogani, MD and CEO of Indiareit Fund Advisors Private Ltd, a private equity fund promoted by Piramal Group Jogani. 

Interestingly, over 100 slum projects are going on in Mumbai currently, involving 2.50 lakh homes. The Union and state governments are aiming for a slum-free Mumbai by 2015. When contacted, S S Zhende, Chief Executive Officer, Slum Rehabilitation Authority (SRA) told B&E, “There is a clutch of new developers who are sending in proposals for slum projects, particularly after the floor space index (FSI) was raised to 3 from 2.5 in such ventures last year. With higher FSIs, firms get additional construction rights for development.” Zhende also credits the high-powered committee formed last year to settle disputes between slum developers and authorities for making the projects more attractive to developers. 


Source : IIPM Editorial, 2012.
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