The cost of converting Mumbai’s legendary shanty town of Dharavi into a modern urban township, currently estimated to be around Rs 15,000 crore, may actually rise up to Rs 21,000 crore. State government officials associated with the Dharavi revamp project supported the estimate of Rs 21,000 crore claiming that the project may be implemented in a staggered manner which would naturally involve frequent cost revisions. Government officials, however, claimed that cost escalation may not necessarily reduce the developers’ margin of profit. In the immediate context, what this quantum increase in the project cost could do is force the state government to jack up the reserved price of bid for redevelopment. Currently, the five-sector model for redevelopment has fixed the reserved price at Rs 450 per sq ft of area to be redeveloped by the successful bidder. This is the price that the bidder must pay the government upfront for the area under redevelopment. A sub-committee of secretaries under principal secretary, housing, has suggested that the reserved bid price be increased to Rs 2,000 per sq ft. With the cost of redevelopment set to increase further, the state government may scale up the reserved price to Rs 3,000 per sq ft, sources said. Bureau report – NMTV News.
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