Dharavi Revamp in Turmoil

• 21 Dec 2023

Source: TH

Why in News?

Recently, the Dharavi Redevelopment Project (DRP), an initiative to rebuild Asia’s largest slum Dharavi, has sparked heated controversies due to allegations of favoritism towards the winning bidder for the project.

• A Special Purpose Vehicle (SPV) named Dharavi Redevelopment Project Pvt Ltd (DRPPL) has been established for this project.

What is the Dharavi Redevelopment Project?

• In 2004, the state government formed the Dharavi Redevelopment Authority under the Slum Redevelopment Authority (SRA) with the goal of making Mumbai a slum-free city.
• The initiative addresses the persistent urban challenge of slum redevelopment in Mumbai, a city with a significant slum population.
• The redevelopment plan aims for an integrated development approach encompassing residential, commercial, and industrial aspects.
• This project highlights the public-private partnership aspect in addressing urban redevelopment challenges.
• The redevelopment plan's floor space index of over 4 indicates a significant intensity of land use, emphasizing the multi-dimensional nature of the project.

What is Dharavi?

• Dharavi is the biggest slum cluster of Asia that lies on prime property right in the middle of Mumbai.
• It is spread over 300 hectares, of which the state government has notified 240 hectares for the project.
• It was founded in 1882 at the time of the British Raj.

What is a Special Purpose Vehicle (SPV)?

• A special purpose vehicle is a separate legal entity which has all the attributes of a corporation such as owning assets, capacity to and get sued etc.
• A SPV, also known as a special purpose entity (SPE), is like a separate company created by a main company to protect against financial risks.
• Even if the main company faces bankruptcy, the SPV's independent legal status ensures that its obligations remain secure.
  • This is why a SPV is often referred to as a bankruptcy-remote entity.
• A SPV can be employed to take on a risky project, lessening any potential financial harm to the main company and its investors.
• Venture capitalists use SPVs to gather funds and invest in a startup.

What are the Recent Initiatives Related to Urban Development?

• Atal Mission for Urban Rejuvenation and Urban Transformation (AMRUT)
• Pradhan Mantri Awas Yojana-Urban (PMAY-U)
• Climate Smart Cities Assessment Framework 2.0
• TULIP-The Urban Learning Internship Program
• Atmanirbhar Bharat Abhiyan (Self-Reliant India)

UPSC Civil Services Examination, Previous Year Questions (PYQs)

Mains

Q. Do government’s schemes for up-lifting vulnerable and backward communities by protecting required social resources for them, lead to their exclusion in establishing businesses in urban economies? (2014)