Can Chinese firms redevelop Mumbai's BDD chawls, MHADA asks MHA

Apr 12, 2018, 09:10 IST | Chetna Yerunkar

With 2 JVs seeing heavy Chinese presence bidding for projects, housing body seeks Centre's nod due to security concerns; Chinese bids for sea link and trans-harbour projects were earlier nixed

Over 200 BDD chawls are to be redeveloped. File pic
Over 200 BDD chawls are to be redeveloped. File pic

The ambitious, Rs 9,000-crore plan to redevelop the Bombay Development Directorate (BDD) chawls might be made with China. Two Chinese companies have expressed their desire in developing the property in partnership with Indian firms. After learning about this, the Maharashtra Housing Area and Development Authority (MHADA), which is the nodal agency for this project, has written to the central government seeking its clearance.

Last year, the state government announced a project to redevelop BDD chawls in the city
Last year, the state government announced a project to redevelop BDD chawls in the city

In the past, Chinese companies or groups with Chinese ties were barred by the Union Cabinet from participating in any Indian infrastructure projects for security reasons and owing to unstable relations between the two neighbours. Because of this, MHADA has written to the state and central governments, seeking their guidance. Chinese companies have been previously denied security clearance for the construction of the Mumbai Trans Harbour Link project.

Under the National Security Clearance Policy of August 2015, the Union Home Ministry is the nodal authority for security clearance to foreign investments. The policy covers around 10 sensitive sectors including telecommunications, ports and civil aviation. Investors have to satisfy about 15 national security parameters. The policy also bars foreign investments at certain locations along the border and around vital installations.

Three companies bid
Officials said those two were denied security clearance because they were infrastructure projects, but the redevelopment of BDD chawls is a housing project. The firms that have shown interest are three Indian companies - two of whom are part of consortiums with Chinese firms, while the third is with an Arabian firm. The BDD chawl redevelopment was going to take off last year, but did not see any bidders initially. Once the proposal was re-tendered, these bidders came forward.

While the project was under litigation, MHADA had to wait to open the financial bids for these three firms. Meanwhile, they also wrote to the union government to seek their approval, said officials. But there has been no reply from the central government yet. They have been following up the matter since February. MHADA sources revealed even the state government has written letters have been written to the central government's Urban Development Department and Home and External Affairs ministries seeking clarity on whether or not they should pursue the bids.

Evaluations before clearance
Officials also said in such cases the holding percentages of bidding companies are also evaluated as some consortiums only have technical support, while some others have equity. MHADA will go ahead with the bids only after evaluating the companies on this basis and getting a response from the centre.

A MHADA official said, "Two contractors have already been appointed for Lower Parel and Naigaum and we have received three bids, all of whom are consortiums of international firms, with India-based companies. However, the opening of the financial bid will be done after we receive a reply from the government. They will be evaluating the holding percentage of the companies to see which is higher. Based on that, we will get to know what needs to be done and until then, we have kept the project on paper." MHADA CEO Milind Mhaiskar, said, "We have written to the government and are awaiting their response, which is expected to come soon."

The BDD revamp
Last year, the state government announced a project to redevelop around 207 BDD chawls in the city. These chawls are spread across 32 and 42 acres of land in areas of Lower Parel and Naigaum, respectively, while Worli has another 121 BDD chawls spread across 59 acres.

Residents of these areas are likely to move in to swanky 500 sq ft houses, from their existing 160 sq ft homes. After rehabilitating the existing tenants, the redevelopment project is also expected to create a housing stock of about 16,000 houses, which is likely to be used for affordable housing – one of the BJP government's pet projects.

Also Read: Mumbai: Rs 16,000 Crore Revamp Plan Of Worli BDD Chawls Gets Bids

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