Mumbai Slum Reallocation Project in Uncertainty

When the Housing Development Infrastructure Ltd (HDIL) won the contract of rehabilitating the slum dwellers encroaching the Mumbai Airport land, it was like a jackpot for the company and its investors.

This was country’s largest slum redevelopment and rehabilitation project and involved building new tenements for 85,000 families. This would free up 276 acres of Mumbai International Airport Pvt Ltd (MIAL) land which could be used to build a new terminal with other facilities while expanding the runway.

However, in less than six years, the rehabilitation project has come to a halt while both HDIL and MIAL face each other in court.

How it began

When MIAL won the contract to develop and modernize the international airport, it faced a challenge of enhancing the airport and constructing new facilities in the middle of the city. A big portion of the Airport authority’s land was encroached by slum dwellers. MIAL decided to award the slum rehabilitation contract to HDIL which already had a good reputation in rehabilitation projects.

According to the contract, HDIL was to relocate 85,000 families within four years, after which it would 65 acres of land for commercial development and transfer of development right (TDRs). HDIL was to develop 157 acres by 14 October, 2009 in the first phase. In the second phase, it had to develop about 118 acres by 14 October 2010. MIAL said that HDIL was to build 28,000 tenements by October 2010.

The dispute

According to HDIL, it had completed 7,012 tenements of which 6,315 are vacant as the government is deciding eligibility criteria for occupying the property. About 17,605 flats are 80% complete.

After sending a notice to HDIL in June 2011, MIAL sent another notice in January 2013, asking the developer to pay damages within 15 days. HDIL had replied back stating that the relocation was getting delayed due to delays from the government. HDIL had also stated in its reply that it had written to the Prime Minister and the aviation ministry to look into the matter. MIAL however served a notice to HDIL in February terminating the contract, and directed the developer to remove its equipment and employees from the project area.

HDIL in turn challenged the termination of contract in Mumbai High Court in June. It stated that delay in rehabilitation was beyond its control as the government bodies, MMRDA in particular, were delaying the process of identifying the eligibility criteria for rehabilitation. However, MMRDA denied any involvement in the entire project. It said that it had neither been consulted for this project nor had it consented to the appointment of HDIL, hence cannot be accused for non-performance.

Another player in the dispute was the Slum Rehabilitation Authority (SRA) which polices the resettlement of slum dwellers and ensures that they are not fleeced by unscrupulous realtors. The SRA had released some development rights to HDIL which was sold in the market for Rs. 2,400 crore. It accused HDIL that the company was bound to complete the project as per agreement, but it had refused to give possession of the tenements that were already built to SRA. HDIL said that it would not hand over the buildings to SRA as the project agreement with MIAL was terminated.

With the Mumbai airport slum reallocation project declared ‘terminated’ and the blame game between different entities involved, the future of the project and hence the land belonging to the Airport authority as well as SRA remains uncertain. The Mumbai high court verdict will be crucial and will decide the future of the project.