- Adani aims to redevelop a large Indian slum in a ‘colossal’ test
- Hindenburg fallout, political uproar, residents’ worries weigh
- Court battle between Dubai consortium, Adani adds new twist
- Adani argues SecLink case should be thrown out
Indian billionaire Gautam Adani’s plan to rehouse a million people living in one of Asia’s biggest slums is Fuelling worries among residents about his capacity to deliver amid high-profile financial setbacks and allegations that Prime Minister Narendra Modi’s allies afforded him favourable treatment.
The Dharavi slum, about three-quarters the size of New York’s Central Park, featured in Danny Boyle’s Oscar-winning 2008 movie “Slumdog Millionaire“. Its open sewers and shared toilets, close to Mumbai’s international airport and high-rises housing foreign companies, stand in contrast to India’s development boom.
Adani is at the helm of plans to redevelop Dharavi after the Maharashtra state government in July approved his $614 million contract bid to overhaul the slum, which is known for producing leather goods, following years of failed attempts.
Adani Group aims to demolish what it describes in legal documents as an area of “unhygienic, deplorable” conditions and build new towers on state-owned land to accommodate residents and their businesses. Consultancy Liases Foras estimates Adani may invest up to $12 billion in remaking Dharavi and in return get development rights that could yield revenue of up to $24 billion.
Only those who already lived in Dharavi before 2000, mostly ground-floor residents, will get free homes during the redevelopment. About 700,000 inhabitants of mezzanine and upper floors are considered ineligible by the government and will be offered units up to 10 kilometers away, which they say could require them to pay upfront costs or higher rents.
The overhaul, poised to start around September, comes at a tumultuous time for Adani. The tycoon was the world’s third-richest person until January, when – despite his denials – allegations by U.S. short seller Hindenburg of improper dealings wiped $150 billion off his group’s market valuations.
A fresh threat to Adani’s plans is a legal challenge from rival bidder SecLink Technologies Corporation. The Dubai-based consortium, which says it is backed by Bahrain’s royal family, alleges Maharashtra improperly canceled an original 2018 tender, for which SecLink bid highest, and restarted the process with new terms in 2022 so that Adani could win, according to court papers 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 lawsuit, forcing the conglomerate to defend its position before judges.
In an 809-page filing last month challenging Adani and the state, reported by Reuters for the first time, the eight-member consortium said Maharashtra’s modified bidding process was “politically motivated” and “tailor-made to suit” Adani Group.
Those changes, according to SecLink, included doubling a bidder’s required net worth to $2.4 billion and capping consortium members at two instead of eight previously. Adani, in a non-public submission to judges before an Aug. 31 hearing, denied SecLink’s allegations and argued the case should be thrown out in the interest of development.
Adani Group, SecLink, Maharashtra’s Chief Minister Eknath Shinde, and Modi’s office did not respond to questions from Reuters for this report.
(With inputs from agencies)
