Friday, November 24, 2017

Investment News and Commentary from Emerging Markets in Asia - China, India and ASEAN

About discusses business and investment news rising from the geopolitical relations of China and India, and the interactions these two countries have with the rest of emerging Asia.

Dharavi- a twilight zone of informal housing on its way to development


Few days back we were discussing the pace with which Indians and Chinese are getting richer today and the differences in the have and have nots.Hence I thought of writing this article, an example that’s in stark contrast to big industrial empires that rule in Mumbai and on the initiatives of the state to improve the infrastructure and the well being of its people.

Today I am on DHARAVI, routinely referred to as “Asia’s largest slum” Which is actually not the case. Today Karachi’s Orangi Township has surpassed Dharavi.
Recollect dailies stating that Mexico City’s Neza-Chalco-Itza barrio has four times as many people. 
If the day was quit clear and you were landing at Mumbai international airport, you would not miss, the slummers, spread over an area of 175 hectares! Dharavi, an economic unit, in its own, has over a million souls residing therein {18,000 people crowd into a single acre (0.4 hectare)}

Until the 19th century, this area was a mangrove swamp inhabited by Koli fishermen. When the swamp got filled (depriving the fisherman of livelihood) and later when the transformation of the island city of Mumbai city began thus providing newly drained marshes as space for new communities to move in. Hundreds of thousands came from Uttar Pradesh (north India), to work in textile industries. The Kumbhars came from Gujarat, north west part of India, to set up a colony of potters. Tamils, from the south, began to open tanneries. And what was the result: The state not having enough accommodation for the people , resulted in what exists today.

There is scarcity of every kind there. From housing, water supply- forget clean water, electricity and toilet facilities. The environments cant just be imagined by people like you and me …But then the statistics below also reveal the importance of the area in the economics of Mumbai:

-There have been textile and pottery industries, traditionally, and an increasingly large recycling industry. There are an estimated 15,000 single-room factories, manufacturing various things. You name it and Dharavi makes it.

It has around 5,000 small-scale industries, which generate an estimated $ 0.5 Billion

- almost 0.5 Million people running a $ 0.75 Billion conglomerate of cottage industries.

– 85 per cent of its 0.6 Million residents are employed.

On an average each earns $ 75 to $375 monthly 

At its lowest Dharavi generates about $ 40 Million a day. 

– Leather Industry -$ 30 Million industry employing over 0.2 Million people. (If you have ever driven down the Mahim-Sion Link Road in Mumbai, you would have found the leather showrooms on either side of the road, with big brands all been produced by the leather manufacturers of Dharavi.)

Hence it’s a clear picture of whats missing :

At one end you have India’s financial capital and at the other a huge industrious potential lying with the poorest inhabitants of Mumbai. The need of the hour was to bridge the gap and to provide proper living standards to its people.

The govt. of Maharashtra had recently invited expressions of interest from the developers over the globe to develop the entire land area underlying the slum and rehouse its inhabitants.

Following as been reported by financial times and others:

The stakes are enormous. If what is expected to be a six – seven-year project succeeds, it could pull 600,000 people out of poverty and create a new modern business district equivalent in area to the city’s existing central business district in southern Mumbai.

Dharavi project will be the most ambitious such project so far. Under the plan, the government will split the 144-hectare site into five different parcels of land, each of which will be auctioned to a different developer or consortium of investors. The developers will be required to demolish a total of 57,000 slum structures and to rehouse the inhabitants and their businesses on the same site, free of charge. Each will be given a 225 sq ft commercial showroom that will fetch higher rates – both in term of property value and sales.

The project is expected to comprise 30m sq ft of new developments for the slum dwellers, 20m sq ft of luxury homes to be sold at market prices, and 20m sq ft of other commercial development. The government estimates the total cost at $2.3bn while the resale value of the developments will be many times that. The redevelopment will be done in stages, during which the inhabitants will be relocated.

About 4500 industrial units will be rehabilitated in the designated commercial area. A significant change to be brought is that the leather industry of Dharavi, hub of export-quality leather, will be moved out and only non-polluting non-hazardous industries will be allowed to stay on
Reservation for open space has been increased to 15 per cent from 8 per cent earlier and space for amenities like schools has been doubled to 10 per cent. Existing industries have the option of changing to non-hazardous units or moving out. The project also plans five new road networks.

There have been a number of protests to the plans. Many of those who objected did so either on the ground of employment or protection of industry but many also agreed that it’s the need of the hour for the betterment of their living conditions, but then with corruption and red tapism, clinged to economies, not much can be predicted about the progress of the development plans.

Also is relevant  -the picture post changes… do we expect the same problems erupting again or is this a once or all solution? write to me your views on the situation.

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One Response to Dharavi- a twilight zone of informal housing on its way to development

  1. Sir,
    You must compare this dharavi with the new Indian Biggest FAT CAT Mukesh ambani who is in the forbes list. this gentleman is constructing a personal house for himself costing almost the same amount as that of relocating dharavi!!!!.It is a 27 storey house with 3 helipads,163 car parking slots,swimming pools and all unheard of luxury for 6 people , yes i rrepeat to house 6 people of Mukesh ambani’s family of his mother, wife and also three daughters.They will be looked after by 600 servants.Therre is none comparing these MODERN MAHARAJAHS IN CHINA in Opulence. Now we know why naxalism is showing its head in mumbai itself and why there are farmers suicides in maharshtra.

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