Dharavi: Developing Asias largest slum (A) Harvard Case Solution & Analysis

Problem Statement

The major problem that has been identified in the case is that Rance Hollen is wondering whether it is the right time to invest in India. Along with this, Hollen was wondering how to approach the project, and should the company consider entering in the bid because of the increase in the political risk, market risk, execution risk and the foreign exchange risk. Therefore, Hollen is analyzing whether he should sell initially those flats which will be sold and then move on to the construction of nonprofit flats for the Dharavi poor population.

Key Issues

The key issues identified in the case regarding the bidding of Dharavi slump are as follows, The Company has to deal with these issues also to actually enter into the deal with the government for the project where the largest slump has to be developed or rebuilt.

      After the elections, will the new government support the Dharavi Project

      Do the initiatives of the developers sufficiently address the needs of the residents of Dharavi slums?

      How would the developers deal with the environmental issues related to the small sized industries at Dharavi?

      Whether the developers and the government were capable of dealing with the economic and political uncertainties that come in the course of such a long term project?

Response of the New Government: For the success of this project, it was very important for the developers to have the same level of favor and support of the newly elected government because Dharavi had a very large population base of the Maharashtra state and therefore, there was a huge political interest and influence in this sector.

Dharavi Project Developers: The DRP would be executed by the Slum Rehabilitation Authority (SRA) and would be financed by the collaborative actions of the government bodies with certain private enterprises. The major purpose of this project was to develop the slums of Mumbai into a highly modernized commercial and residential enclave. The Chief Minister of Maharashtra, Prithviraj Chavan gave a principle approval to the project and openly supported the completion of all the administrative procedures of the project before the upcoming 2014 general election in the country.

However, the practical work was delayed for several years and in 2014, the opponent Shiv Sena party won the election and the congress party lost five out of six seats in the Dharavi area, which shows that the people really want to get the project completed at any cost. Right after taking over the government, the Shiv Sena party has announced the execution of the project on priority basis.

Needs of the Residents of Dharavi: As the project had been developed for the benefit and modernization of the households of Dharavi, therefore, the developers should keep their interest as a top most priority of their project.

Ecological Issues: The ecological issues identified in the case are that since the population is living in a slump, it has to wait for long hours to relieve themselves in the morning; this is again a problem which the new project has to overcome. Since this is the basic necessity of life, the life of the slump is deprived of it.

Recommendations

Based on the above analysis, Rance Hollen, the head of Warwick Capital the recommendations are as follows:

First of all, Wadwick Capital should look to define the scope of the project. It is therefore, recommended that first the flats should be sold to the people who will be paying the price. This will eventually help the company generate revenues through which the project can be further executed in the development of Dharavi Slump. Along with this, the company should also look to coordinate and communicate with the government so that the project can be completed as per the instructions of the government and the company. Being a company with strong financial background and with the project being a part of the humanity service should not consider earning extra profits. Although a foreign company is looking to invest in the country, but still the main focus should be the facilitation of people. Along with this, another recommendation is to complete an environmental audit. This will help the company identify the needs and wants and all the loop holes of the project...........................

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