Many a times, life gives you so much that you start taking your life as a mission and purpose. It was when DDA advertised for a bid for slum rehabilitation in Delhi Times of India dated 30/08/2008, it caught my attention. This was an invitation for bids for rehabilitation of 21 slum clusters in Delhi. My inner self brought me to visit Kathputli colony the first one to be rehabilitated.

I along with our Raheja team went to assess the ground reality of the project. There was filth and open defecation all around and my team was not able to withstand the stench. One senior lady even vomited. On the other hand the slum dwellers we interacted with, gave us respect like messiahs to change their life. As we drove back, my team was totally resistive that the company should not take up this project more so it did not make any economic sense too.

“We are working in Real Estate on several projects and for several years, they can all get us money and also can all be executed easily but if we succeed in getting this first slum rehabilitation project under PPP (Private Public Partnership) it will be the first project dedicated to the real mission of changing the face of our Country. It is within 5 kms of the parliament – the representative face of India. More so the success of this project will be quoted as a model to make India SLUM FREE.”

“I am sure that this project can get us several real recognition and awards too, which no amount of money in real estate business can get us.”

I ultimately prevailed upon my team by making them agree so that ‘if even we don’t do it who else can really do it as a mission’.

Most of the advisers and analysts I met subsequently advised me against it as it never could be done by any government in the past 50 years nor did it make any reasonable economic prudence.

I do not know which guiding force has been behind me giving me strength and belief that I continued to move forward step by step to fulfill the “purpose of my life”. Let me do my bit to the service of our Nation, Mankind and Almighty.

Almost seven years down the line and having made an investment and carrying costs of over Rs. 200 Crores already my company is bleeding profusely, While I struggle to steer it out of the most turbulent times in the history of Real Estate in India.

When I read about AAP online press release on June 30, 2016 calling it a scam of Rs 1000 crores, I was really pained and aggrieved. I invite AAP to please know the facts before trying to make such statements.

This project was conceived way back during Rajiv Gandhi’s time (who promised and committed slum dwellers, Houses and flats) and after over a decade of working by DDA the project invited open bids in August 30, 2008. Eight renowned developers of India ( as mentioned below) submitted their bids:

1. ERA Infra Engineer Limited
2. Housing Development Infrastructure Limited
3. Unitech Limited
4. B L Kashyap & Sons Limited
5. BG Shirke Construction Technology P. Ltd.
6. Raheja Developers Limited
7. JMC Projects (India) Limited
8. Akruti City Ltd.

Under the bid the developers was required to construct a transit camp for 2800 families with creation of all the infrastructure like Housing units, roads, Toilets, Water Supply, Electricity, sewerage etc. at its own cost (Developers Cost). DDA will vacate and shift the slum dwellers to this Transit Camp and then the developer will have to construct another 2800 EWS flats on 60% of the slum at its own cost (Developers Cost) and hand over to DDA for free so that these families of slum dwellers are brought back here at the original place. So in short you have to invest for 5600 (2800+2800) housing facility at your own cost.

In return DDA will give you 40% of the presently encroached slum land and developer was required to bid for the tender in a open bidding process either way i.e. how much money the developer will pay or demand for undertaking the project over and above expenses to be incurred by him.

It is pertinent to mention here that almost everywhere else in the country including Mumbai, the developers get 50% of the area with additional higher FAR as compensatory element to facilitate more initiatives for slum re-development.

A rough economics at the time of filling the tender (2008 Rates) is given here under

(A) Expense to be incurred by the Developer (2008 Rates):

   

Description

Amount

(Crore)

(a) Towards Construction of Transit Camp (2800 units with approx 500 Toilets including infrastructure, electricity, roads, sewerage etc.

 

25.96
(b) Towards cost of construction of 2800 EWS 2 room flats with kitchen, toilet, balcony and entire infrastructure like lifts, car parking, roads, electricity and water establishment, sewerage treatments, Basti Vikas Kendra and religious sites 110.69
(c) Cost of various other items including 6.11 crores plus, administrative costs and all recurring and maintenance cost 56.54
SUB TOTAL 1 (a+b+c) 193.19

(B) Income inflow from remunerative components

   

Description

Amount

(Crore)

(a) Residential Component  
a1 Estimated revenue from sales of Residential 136.23
a2 Less: Cost of Construction and other Expenses   46.33
a3 Net Income from Residential Component   89.90
(b) From sale of commercial components  
b1 Estimated revenue from sales of Commercial 173.53
b2 Less: Cost of Construction and other Expenses   64.48
b3 Net Income from Commercial Component 109.05
SUB TOTAL 2 (a3+b3) 198.95
Profit / (Loss) Rs. Crore
SUB TOTAL 2 – SUB TOTAL 1 5.76

1. Actual expense till date (Audited) including carrying and maintenance cost 31.03.2016

Description Amount

(Crore)

(a) Towards construction & maintenance of Transit camp 2800 units approx 500 toilets, water supply establishment, STP, RO Drinking water plant, electricity and distribution establishment  (2.8 MVA) and the interest cost, all overhead costs  and various approval cost etc.  

79.58

(b) Towards salaries and administrative costs   9.83
(c) Amount Paid to DDA and Bank Guarantee in favor of DDA 17.13
Subtotal (a+b+c) 106.54
(d) Estimated cost for constructing EWS 2800 units at 2016 CPWD government rates. Towards cost of infrastructure, additional construction and facilities 138.50
(e) Admin and all other overheads and finance cost for 2 years, etc. 112.50
TOTAL COST (a+b+c+d+e) 357.54

2. Estimated Income from the Remunerative Components:

Description Amount

(Rs. Crore)

(a) Residential Component  
a1 Estimated revenue at todays prevailing market rates from sale of residential components (209,591 Sq. Ft. @ Rs. 12,000/- psft)

 

(Current market rates of other’s properties in the vicinity- DLF’s Capital Green on 68 acres land parcel is between Rs. 10,000 to Rs. 12,000 per sq.ft.)

251.51
a2 Less: Less: Cost of Construction and other Expenses   71.42
a3 Net Income from Residential Component (a1-a2) 180.09
(b) Commercial Component  
b1 Estimated revenue at todays prevailing market rates from sale of commercial components (182,662 Sq. Ft. @ Rs. 15,000/-psft)

 

(Current market rates of other’s properties in the vicinity- Anant Raj’s is between Rs.13,000 to Rs. 15,000 per sq.ft.)

274.00
b2  Less: Cost of Construction and other Expenses   85.61
b3 Net Income from Commercial Component (b1-b2) 188.39
TOTAL (a3+b3) 368.48

Approximate Gross Profit / (Loss) (Rs. Crore)                                                                                  10.94

CHALLENGES FACED IN LAST 7 YEARS

DDA initially failed on delivering the land for constructing the transit camps many times. After several failures in allotment of land finally in we were given land at Anand Parbat to construct transit camp. Till now we have spent huge amount on building the ultra modern prefabricated structures for making the Camp and providing all the facilities like RO filtered water for drinking, wide roads, electricity, adequate number of toilets and bathing facilities, community facilities, street lighting, greenry, STP, schools, training and performance areas, daily needs provisions, medical checkups etc. By May 2013, construction of Transit camp was completed. Apart from this we are also paying for cleaning their toilets, paying for electricity& security also.

In February 2014 DDA asked the residents of this slum to shift in Transit camp and in April 2014 High court also ordered the representatives of the slum to shift as soon as possible. But the shifting of the same could not finish due to vested interest of few and the project came to a standstill. There are about 2800 families that live in this slum. By the time only 600 odd families had shifted. DDA stopped the process due to elections. Unfortunately DDA failed to restart the process ever since to shift the residents of this slum to Transit camps and that too when the construction of Transit camp had been completed in 2013 itself. Residents of this slum are living there under the most unhygienic conditions and doing open defecation around railway track. They all now want to shift but nobody is coming forward to help them and direct authorities to start the process again.

From the last 7 years, the project for rehabilitation of Kathputli colony is only on papers.

According to the contract with DDA, houses for 2800 families are to be built free on 60 % of the total land which would further cost appx 300 crores apart from over Rs 200 crores already spent. We have only 40% of land share in our kitty. This occupied 1.827 hectares (1827 sq. mtrs aprox) of encroached land and cannot be valued at Rs 500 crores by any figment of economic prejudice or even imagination. Please know that the amount of Rs.6.11 crore is NOT towards the land cost which AAP is publicizing. It is towards the earnest money of the tender.

Instead of helping in shifting these poor, helpless slum residents; these political parties can just make it a political matter in media and blame those who want to work for the nation and such causes. If they are really concerned about the residents of this slum then why don’t they simply complete this mission of Housing for all together.

If any political party / NGO / Media house / entrepreneur wants to make milage out of spreading mis information and negativity to serve their vested interests please COME FORWARD NOW. Compensate investments made by Raheja already. Despite this mission of the slum redevelopment dwellers, who are working hard since last 7 years to make this mission successful.

Please come forward to take it up even from here today but for God’s sake don’t serve your personnel interest on the mission to change life of millions of poor underprivileged and deprived strata of India.

At last but not least we will like to appreciate the new policy introduced by Hon’able CM Arvind Kejriwalji for settlement of slum developers of Delhi. It is also appreciated that in this new policy there is more clarity on price & eligibility criteria .

The Kathputli project’s terms & conditions are same as mentioned in new DUSIB poliy.

We can all make it happen, if we think positive and rise above petty selfish political gains.

I request everyone let us work together to fulfill the mission of making Delhi and our country slum free.