India makes room to move on up

As India's economy booms, integrated townships with commercial and residential units may be the answer.

TO GO WITH Lifestyle-India-housing-construction-tourism-environment,FEATURE by Phil Hazlewood 

This undated handout photo received on September 15, 2009 from Lavasa Corporation Limited shows construction in Lavasa, near the western Maharastrian city of Pune.  Lavasa's new "hill station", long associated with past colonial rulers, is being billed as "free India's first and largest hill city" but to its corporate backers and those who will run it, it represents more than just a symbol of independence.    RESTRICTED TO EDITORIAL USE      AFP PHOTO / HO / Lavasa Corporation Limited
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Nestled in the shale-brown ranges of the Sahyadari mountains in western India, Lavasa promises to be a shining metaphor for the future Indian city.

Spread over a sprawling 100 square km, this 1.4 trillion rupee (Dh113.14 billion) township is being built by the Hindustan Construction Company (HCC) in four phases, the first of which will be ready this year and the last by 2021. With lakeside apartments and Mediterranean-themed villas for more than 200,000 people in a postcard setting, and business facilities such as IT and biotech parks, this new micro-city will be an amalgam of residential and commercial facilities, promoting a new culture of walking to work.

Lavasa is set to be India's largest integrated township project, a new concept in Indian property, designed as swanky, self-sufficient, private estates - more like gated communities - with modern city infrastructure. "This is not a real estate project," says Ajit Gulabchand, the chairman of HCC. "We are in the business of comprehensive urban development and management in which real estate is just one vertical. This is more like a city-state; a whole new urban centre with hospitality, tourism and education at its centre."

Integrated townships such as this one are being touted as the remedy to India's growing urban congestion and chaos. The world's urban population is set to double to 6.3 billion from 3.4 billion by 2050, the UN says. With its soaring population, India will be at the forefront of this urban growth. About one third of India's 1.2 billion population, more than the entire population of the US, is urban. India's congested cities have expanded rapidly as increasing numbers migrate to towns and cities in search of economic opportunity.

In the next few decades, 400 million people will migrate to cities. Most now move into slums or decrepit tenements, which now account for a quarter of all urban housing. And most Indian cities are densely populated. Mumbai, India's financial and entertainment capital, crams in more than 6,000 people per sq km. Most cities have grossly inadequate housing, electricity and water supplies, transport, sewage, schools and hospitals.

Although India's rural centres house most of the population, its cities generate more than two thirds of the country's GDP and account for 90 per cent of government revenues. Enhancing the productivity of India's cities, experts say, can push India's economic growth and reduce poverty. "There is a genuine need for integrated townships," says Sanjay Dutt, the chief executive of Jones Lang LaSalle Meghraj, a global property services firm in India.

"India lacks the infrastructure to accommodate and sustain growth. In a country as big as India, these large developments - are needed to align infrastructure with economic growth." In the past three years, several property companies have launched integrated township projects around India, from as small as 40 hectares to those taking up tens of thousands. Sahara Prime City, for instance, a large property company in northern India, is developing 88 integrated townships across the country under the title of "Sahara City Homes". It has a vision to build such projects in 217 urban centres around India.

"In new integrated townships, planners are looking at solutions to increasing pressure on existing urban infrastructure and rapid urbanisation," Sushanto Roy, the chief executive of Sahara Prime City, told the Press Trust of India. Mr Dutt says: "Indian cities don't have enough large land parcels within municipal limits." He stresses the need for integrated townships to meet the demand for housing for India's urban dwellers.

Economic activity is expected to be at the heart of integrated townships. Commercial units set up within or near the townships are expected to be a magnet of economic activity, with the bonus of reducing commutin time for the residents, the developers say. Traffic snarls are frequent on congested roads in and to cities. The number of cars projected for India in 2030 is expected to rise to 70 for each 1,000 people from the current rate of eight for each 1,000 people, adding much pressure to India's poor road infrastructure, according to the centre for science and environment, based in New Delhi.

Only half of the 200 planned projects are up and running, even though most of them were launched in 2007 and 2008, during the peak of India's economic boom. Today's more conservative economy has made it harder to develop such projects. Another key challenge to integrated townships is that vast tracts of rural farmland need to be procured for development. And as these projects are away from cities, developers must also deal with government bodies and institutions that are badly equipped to tackle the needs of such extensive infrastructure projects.

Many projects are caught up in the legal wrangle of procuring land from restive farmers unwilling to part with it. "It's a tough business," Mr Dutt says. The Confederation of Indian Industry has demanded from the government that integrated township projects be given infrastructure status, meaning key incentives for developers. While China spends 11 per cent of its GDP on infrastructure, India spends less than 6 per cent. In the annual budget announced last month, the government proposed to dedicate US$37 billion (Dh135.89bn) for infrastructure upgrades in rural and urban areas. But more is needed, experts say, to boost India's potential rate of growth.

"Integrated township is one of the effective ways of tackling infrastructure," Mr Dutt says. "These are capital-extensive projects, which can considerably lessen the burden of [civic authorities]."