Management of Cities Globally
Question 1
In the modern era, there has been an increase in urban development. Unfortunately, urban development has led to the development of slums. (Downs, 2010). Slums represent areas that are poorly developed with poor living and economic conditions. However, investing in slums development is one strategy of realizing a profit. Slums come about due to poor economic standards of the people. Therefore, investing in slum development allows an investor to achieve economic growth. When slums are developed, people living there shall get involved in economic activities that shall bring about revenue. (Marx, Stoker, & Suri, 2013). Developing Dharavi slums is an opportunity for investors to make a profit. The government of India has given incentives that shall make developing Dharavi less costly. Therefore, there will be a chance to make money since the government shall be in conjunction with the government in providing these houses to the dwellers. As such, there will be money arising from the homes and more opportunities to many other economic niches.
Question 2
The decision to develop Dharavi has been reached by the government in conjunction with private investors. The interest of government is rising the living standards of the people of Dharavi. The government as well sets to improve the economic growth of the area. This move shall ensure the people of Dharavi have economic activities, which gives them a daily income. For private investors, they are interested in making profits from the area. The government is offering incentives to attract more private investors. The teaming up of private investors and government shall result in an improved economy. The residents of the area have received the proposal warmly, as the site it as an opportunity to better their lives.
Question 3
There are other ways possible to develop Dharavi. The government could do development without involving the private sectors. However, due to limitations of development by government alone, this could not be a viable option. The private sector is significant in this project since they do overcome the limitations posed by government development alone. The private sectors cannot be involved in this project alone since it would be expensive. With the expensive cost of production, the results would be overly high for the people of the slums. Allowing private sectors in this project has several pros and cons. For instance, one advantage with private sectors is that it will speed up the operations and finish the project in time. However, they could exploit the workers and the ultimate consumers. Therefore, the involvement of the government shall help mitigate this disadvantage.
Question 4
I would bid with the minimum premium of 10%. This project is open to many investors. A lot of private investors have been attracted to the project. This means that the competition shall be stiff in the awarding of the tender. Bidding for the minimum 10% premiums reduces the risks involved. It is a very profitable adventure that requires concrete strategies. That is the reason bidding in the minimum premiums of 10% is the best option to go for.
Reference
Downs, A. (2010). Neighbourhoods and urban development. Brookings Institution Press.
Marx, B., Stoker, T., & Suri, T. (2013). The Economics of Slums in the Developing World. Journal Of Economic Perspectives, 27(4), 187-210. https://doi.org/10.1257/jep.27.4.187