Adani Properties Justifies In Bombay High Court Additional Concessions Granted By Maharashtra Govt In Tender For Dharavi Redevelopment

“The new tender issued pursuant to the 2022 GR has made the entire redevelopment more inclusive by providing for accommodation and rehabilitation of the non-eligible slum tenements in affordable housing or under PM Awas Yojana (which was not the case in the 2018 Tender). The 2022 Tender thus aimed at rehabilitating the lives of far greater number of persons and impacting the lives and livelihood of several persons than as contemplated in the 2018 Tender. As the entire costs and expense for the rehabilitation of the non-eligible slum tenements was required to be undertaken by the lead partner/ its affiliate, some additional concessions to the Dharavi Redevelopment Project were provided”, the affidavit filed on behalf of Adani Properties states.

Adani Properties as well as the state government have filed affidavits before the court in a writ petition by UAE based Seclink Technologies challenging the 2022 tender process by which Adani emerged the highest bidder for Dharavi slum redevelopment project. Seclink had emerged as the successful bidder in the 2018 tender for Dharavi redevelopment, but the entire tender process was cancelled, and a new tender was floated in 2022 in which Adani Properties succeeded.

In its petition, Seclink has contended that the concessions provided for the highest bidder in the tender such as stamp duty exemption, reduced property taxes for the rehabilitated tenements, waiver on premium on fungible FSI etc. are beyond the scope of Vital Public Purpose Project. Further, Seclink has contended that the final work order issued to Adani goes beyond the scope of the advertised tender.

The state government in its affidavit has submitted that the concessions would have also been available to Seclink, had it participated in the new tender process.

The government’s affidavit, filed by Sunil Tumbare, Deputy Secretary of the Housing Department submits that the tender process was transparent and no undue favour was shown to the highest bidder Adani Group.

Also Read: Russia-Ukraine War Has Materially Affected Economy, Adani Won Dharavi Redevelopment Tender Fairly: Maharashtra Govt To Bombay High Court

The affidavit contends that the bid amount was never intended to be a payment of revenue or consideration to the government. Instead, it was meant to be exclusively channeled into funding the execution of the redevelopment project by the selected bidder. The affidavit further states that the highest bidder is obligated to invest the amount of their bid to initiate the project. Consequently, the concept of a "loss to the public exchequer," as claimed in the petition, is entirely misconceived and without merit, the affidavit states.

The new tender provides for a minimum guaranteed amount of Rs. 2800 crores to be paid to the Rail Land Development Authority (RLDA). According to the state’s affidavit, this amount is in addition to the bid price and includes the construction costs for approximately 84,000 square meters for Railway Quarters, along with an upfront payment of Rs. 1000 crore for land, along with related interest and costs.

The highest bidder in the new tender Adani submitted a bid of Rs. 5069 crores and is also bound to indemnify RLDA for Rs. 2800 crores. This results in a total financial obligation of Rs. 7869 crores, surpassing the Rs. 7200 crores bid of the petitioner under the old, cancelled tender, according to the state’s affidavit.

The affidavit further states that the new tender requires that the selected bidder accommodate non-eligible slum tenements through affordable housing or the Pradhan Mantri Awas Yojna, incurring additional substantial costs to be borne by the SPV.

The state’s affidavit contends that the inclusion of Railway land in the redevelopment project was a material change in the scope of work that warranted a fresh tender process. It emphasizes that no vested rights had accrued to the petitioner, and the cancellation of the 2018 tender was based on valid and reasonable grounds.

The affidavit contends that Seclink’s Writ Petition attempts to portray itself as a Public Interest Litigation, even though its primary contentions concern the cancellation of a previous tender and subsequent tender processes. The affidavit contends that the petitioner cannot challenge wisdom of tender conditions as those matters lie within the domain of the tendering authority.

The affidavit states that the petition contains vague and unsubstantiated allegations of mala fide actions by the state government without providing proper particulars. Further, it contends that allegations of political motivation lack any basis or material evidence. The state’s affidavit points out that the petitioner itself did not submit an individual bid under this tender, and the consortium as a whole was considered for the contract. It argues that the present petition is not maintainable as it's filed only by the petitioner and not the entire consortium.

The state in its affidavit contends that the petitioner has failed to establish a prima facie case for interim relief and that granting any such relief could impede the progress of a vital public purpose project.