Dharavi: Challenges of rebuilding economically viable cities

The Maharashtra government’s formal nod (through a government resolution or GR notified on July 14) to the Adani group for redeveloping Dharavi has rekindled hope that one of the largest urban slums of the world may finally get a makeover – as part of the promise to make Mumbai a Shanghai (or a Singapore) by both central and state governments.

The Adani group would carry out the project through a special purpose vehicle (SPV) with 80% equity, the rest 20% coming from the Maharashtra government. This was set out in the request for proposal (RFP) document issued in 2022 when international bids were invited (same as in 2018). The RFP also said that the Maharashtra government had notified 240 ha (2.4 sq km) of Dharavi for redevelopment. The timeline to complete the project is seven years and involves 59,165 families (46,191 are residential and 12,974 non-residential).

What remains unclear is whether a large number of small business enterprises run from the area would find a place in the redeveloped Dharavi or shifted elsewhere. For one, the RFP was silent on it, merely saying that “SPV will have to construct free housing for the eligible slum dwellers and occupants, including amenities and infrastructure” and “in-lieu of it, the SPV Company will be entitled to construct free sale area to sell in the market” – the business case for a private entity to get into the PPP project and can’t be really grudged.

Maharashtra Deputy CM Devendra Fadnavis did assure the Assembly, in December 2022, that an industrial and business zone was part of the plan, all business enterprises would get more space, a common facility centre and tax sops for five years. But there is no blueprint of it in public domain and remains a mere promise. Besides, the SPV’s blueprint is also not available in public domain – causing apprehensions in the minds of the residents.

The opacity and promises without a blueprint make it impossible for informed debates and fresh ideas to come in. Hopefully, the picture would be clear soon as work starts on the project.

There are at least five reasons why this situation is not healthy.

• Dharavi is the largest urban slum redevelopment project in India and its execution is likely to set the template for all such future endeavours (Indian mega cities like Mumbai and Delhi are riddled with slums).

• India’s urban population is set to explode from 31.8% in 2011 to 38.2% by 2036 – that is, an addition of 218 million urban population by 2036 – as per the Indian government’s 2020 Report of the Technical Group Population Projections. This rapid urbanisation will be fueled by migration from rural areas. Remember, Dharavi was built by migrants on marshy land entirely on their own.

• It is not known what kind of template of urban renewal, or inner-city development in the case of Dharavi, is Maharashtra trying to set. Is there a vision document, a blueprint? Given that the SPV is led by a private entity with 80% equity, and consequently, 80% voting rights – it isn’t really important whether it is the Adani group or any other in this case (given the zero-success rate of all other previous Dharavi projects in the past decades) or in some other case – it might entirely be up to the private player to decide. The absence of an official blueprint or definite guidelines is an open invitation for it.

• Cities (or inner-cities like Dharavi for that matter, which worried urban planners in the US in 1990s because of deep economic distress) are growth drivers.

• Across India, cities, including megapolises like Delhi, Mumbai and Bangalore, are infrastructure nightmares. Past few weeks have seen flood ravage scores of such cities – both in plains and hills.

What template Dharavi would set?

For every urban development planner and thinker, the works of Jeb Brugmann, Cambridge University professor instrumental in urban development of 49 cities in 21 countries, is an essential reading. Particularly, his 2009 book “Welcome to the Urban Revolution” for telling what made transformations of cities across the world successful. He came to Dharavi too, more than a decade ago, after the PPP mode of development had replaced (in 1990s) the earlier in situ redevelopment plans of various Maharashtra agencies had failed.   

Expressing his shock after a particular presentation by a private builder on dismantling and rebuilding Dharavi as a “world class city”, he wrote: “How could anyone who had observed Dharavi for so long miss the most obvious fact about it: that the residential-industrial citysystem was proving itself every day in the market place to be world class? It stood as probably the most successful, scaled poverty-reduction programme in the history of international development. Within the Indian context, Dharavi’s migrant generations had developed an accessible, replicable citysystem for the advancement of the country’s poor majority.”

He added: “It was a stunning example of Indian entrepreneurial ability and ambition. With millions of poor households migrating to India’s cities each year, it seemed almost obvious that this migrant citysystem just needed to be accompanied with the same public investment in urban infrastructure offered to every other Mumbai city model and master-planned suburb, and replicated throughout country.”

Brugmann went to explain how the World War II-ravaged Tokyo was rebuilt. Japan’s central planners rebuilt the wrecked water, sewerage and road systems (infrastructure) but left it to the residents (“citizen city-builders”) to rebuild the city’s housing and commercial spaces. These citizen city-builders “created” a flexible city of villagelike, residential-commercial settlements “in some ways remarkably like the migrant-entrepreneurs of Dharavi”.

He also recounted how the world abandoned the dismantling and rebuilding approach long ago. Rio de Janeiro abandoned its drive of dismantling urban slums and relocating the residents to high-rise buildings in “mid-1990s”. Instead, it began redeveloping slums (in situ) into more stable, lawful, sanitary, mixed-use neighbourhoods “with minimal clearing and relocation”. Europe abandoned its dismantling approach of 1960s-1970s after “planners learned the folly of ghetto clearance and master-planned urban renewal”. Similar was the experience of North America.

But Brugmann didn’t ask Indian planners to follow anyone (Tokyo or Rio), howsoever tempting that might have been.

He advised: “…the true measure of Mumbai’s “world-class” nature and the true test of its ability to tame its chronic crisis (like monsoon flooding, crime and corruption) will not be its success imitating the models of other cities. It will be whether it musters the will and confidence to create a new urbanism of its own”. (That is because there are new sources of advantage produced by shared economies of density, scale and association of co-located firms or industrial cluster.).

A few years later, Edward Glaeser, Harvard’s economics professor and author of “Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier” looked Dharavi from an economist’s eye.

In an article in 2011, he started off declaring that “Mumbai's Dharavi slum is the most entrepreneurial place I've ever been.” Two of his other observations are particularly interesting for economists: (i) migrants to Dharavi are also learning new skills, including developing insights into the grocery demands of urban consumers and (ii) their businesses remain tiny “because raising capital is difficult and because their small scale enables these urban entrepreneurs to slip past the web of regulations”. Another one relevant for town planners and sociologists is (iii) “Dharavi is safe – not because Mumbai's police force is so effective but because the community looks after its own”.

India’s urban mess

Gurgaon is a shining example of what happens when a city is left entirely to a private builder with no blueprint to follow – it is a cluster of disparate high-rise office buildings with little else. Not everyone can be expected to be Tatas and build self-sufficient and sustainable cities like Jamshedpur, Mithapur and Hosur. What would stop the redeveloped Dharavi from being another Gurgaon (irrespective of the private partner in the PPP)?

Herein comes the critical role of government. Dharavi is a self-built housing-industrial citysystem which houses about 10 lakh people, a large number of who run their businesses from their homes or find employment there. Their businesses may not be relocated, as Fadnavis has promised, but his government must come out with a clear blueprint for the SPV to build a self-sufficient and sustainable city, not just “construct free housing for the eligible slum dwellers and occupants, including amenities and infrastructure” as the RFP mandates. If any evidence of the abject failures of Maharashtra governments in urban renewal is ever needed, the crippling monsoon floods of Mumbai this year and for the past several decades is a grim reminder.

It is, therefore, for the central government to step in. It has the resources and wherewithal to mobilise international institutions to frame a vision for urban renewal. The piecemeal Smart City Mission is not enough (again, the recent urban flooding and economic losses they caused prove it). India needs a national vision, plans and strategies to make cities not just livable but economically self-sufficient and sustainable.

More so since India is also battling chronic and massive livelihood crisis in both urban (unemployed rate spiked to 8.5% in June 2023) and rural areas (the demand for manual and low-paying MGNREGS works touched the pandemic high in June 2023) for long.