Adani Group Will Have To Prove Its Financial Capability To Receive LoI For Dharavi Redevelopment, Says Maharashtra

Maharashtra Deputy Chief Minister Devendra Fadnavis on Tuesday said the Adani group which has won the tender for Dharavi redevelopment will get the Letter of Intent (LoI) only after it establishes that it has the financial capability to execute the project.

He was replying after Congress MLA  Varsha Gaikwad, whose constituency includes Dharavi, raised concerns about the project in the wake of Hindenburg Research's allegations of stock manipulation against the Adani group. Gaikwad also asked if a fresh tender will be floated for the project. Fadnavis asserted that the tendering process was  transparent. 

There was a global tender and three parties responded to it. The bids of two parties were proper and the highest bidder among them was awarded the contract, he said.

"So it is incorrect to say that the process was flawed. The LoI has not been issued yet. This is because it is issued only after all the departments take that decision.

"There is one decision (yet to be made) from the Urban Development department after which the LoI will be awarded," Fadnavis said. 

In November 2021, the Adani group emerged as the highest bidder for the 259-hectare Dharavi Redevelopment Project. 
The group's bid of Rs 5,069 crore beat DLF's offer of Rs 2,025 crore. 

The tender mentions that the money would be paid upfront and a bank guarantee will be given (by the winning firm), Fadnavis said. 

"Before issuing the LOI, they (the company which has won the tender) have to show whether they are financially capable, they have to show whether the bank is ready to give them money, and  deposit a certain amount in a dedicated account," the deputy CM said.

"If they comply with everything, they can execute the project....If they do not, they will not get the LoI," he added.
Dharavi, known as Asia's biggest slum cluster, is located in central Mumbai. It is also a hub of small-scale, unorganised industries that manufacture leather items, footwear and clothes among other things.