The 42 chawls together have a total of 3,344 tenants. (File)

Larsen & Toubro, which was revamping the 100-year-old Bombay Development Directorate chawl of Naigaon in the heart of Mumbai, has decided to pull out of the project owing to delays and cost escalation, sources in MHADA and L&T said.

In a letter to the Maharashtra Housing and Area development Authority (MHADA), L&T has cited the slow progress of the project as one of the reasons it is no longer interested in it. L&T bagged the Rs 2,800-crore contract for redeveloping the chawl in 2017, and was to carry out the redevelopment over five phases in seven years.

The eligibility survey in the first phase of the redevelopment could not be carried out due to protest from a residents’ group. However, the eligibility of tenants in the fifth phase has been carried out and the list of beneficiaries has been published. So far, 206 tenants have signed up for the redevelopment scheme, under which they will get 500 sq ft apartments in redeveloped multi-stroreyed buildings. The 42 chawls together have a total of 3,344 tenants.

A MHADA official confirmed that a letter had been received from L&T. He refused to reveal the contents of the letter, saying a reply was being prepared.

An L&T spokesperson declined to comment on the matter.

A senior engineer from L&T, however, said the progress of the project was “zero” in the last three years, and the firm was losing  Rs100 crore annually, including the cost of machinery and the rents for chawls whose tenants had agreed to the redevelopment.

On April 22, 2017, then chief minister Devendra Fandnavis had performed the inaugural ceremony of the BDD chawl redevelopment project, touted as a model for urban redevelopment and renewal projects of old buildings in Mumbai.