Managing rapid urbanisation is a key emerging challenge for the country. India?s cities score low on key parameters like transportation and infrastructure, ease of doing business, sustainability, demography and liveability, health, and safety and security. An estimated R18,000 crore per year is the investment required in the 63 cities covered by JNURRM. India has over 5,000 urban agglomerations and towns, each growing rapidly to take the country?s urbanisation level to 40%.
Given the pace of migration, major cities are grappling with the ever increasing demand for urban services. Raising the infrastructure capacity of existing cities is expensive and disruptive. Experts say India has need for 500 new cities. These could be new self-sufficient growth centres and industrial cities. Such a blank canvas would enable a new approach to traditional problems like planning, zoning, transportation, land use, and waste and water management.
Most lessons in sustainable urbanisation emerge from Asian countries. Some ?Rise of the Phoenix? cases are Kitakyushu and Yokohama in Japan, Suzhou and Tianjin City in China, and Singapore. China alone is reportedly building over 100 new cities; many conceived from sustainable design principles. In a sharp contrast, India post-independence has created only two cities of large scale?Chandigarh and Gandhinagar.
The Delhi-Mumbai Industrial Corridor (DMIC) is among the most ambitious programmes of the central government, involving developing new cities as manufacturing hubs with high-quality infrastructure. Pegged at an investment of $90 billion and intersecting seven states (Delhi, Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh, Gujarat and Maharashtra), 24 investment regions and investment areas are envisioned for the corridor. Fairly detailed master planning has been done for some of these. The financing mechanism and sequencing of build out is understood to be in a fairly advanced stage. The governance question of managing the build-out and operations is the next big challenge.
The traditional model has been of a government-owned development corporation managing the development stage. One example of this is Cidco, which drove the development of Navi Mumbai. While Cidco provided basic infrastructure like roads, water, and electricity, most of the new roads in Navi Mumbai were developed by private builders according to the Cidco plan. Cidco used land pricing as the key instrument to promote development while recovering the cost of land and infrastructure facilities. As a special planning authority, Cidco has now commissioned projects in New Aurangabad, Walunj, New Nasik, New Nanded, Sindhudurg district headquarters, Oros, Vasai-Virar and Meghdoot City (New Nagpur). Post-development, the administration of these new towns rests with the respective local body, with all urban services being provided by the public sector.
The Gujarat Special Investment Region (SIR) Act, 2009 provides a legal framework for development and governance of new manufacturing hubs. It provides an effective framework for private sector participation in infrastructure by drawing upon the Gujarat Infrastructure Development Act,1999.
The Act enables the state government to establish, develop, operate and regulate the SIR. An investment region will have an area of more than 100 sq km and an industrial area will have more than 50 sq km The administrative mechanism comprises an apex authority (GIDB), a regional development authority (RDA) for each SIR, a project development agency and project specific SPVs. The government has formed a project development company in the name of Gujarat Industrial Corridor Company (GICC). Amongst the first to be developed under this framework would be Dholera, about 140 km from Ahmedabad, which, at 900 sq km, is planned to be six times bigger than Chandigarh.
The concept of private cities is gradually gaining acceptance in India. There have been larger industrial townships like Jamshedpur, Mithapur and Modinagar, where the entire town?s administration is managed by the industry promoter. Then there are private housing and commercial enclaves like those of DLF in Delhi and Hiranandani in Mumbai where the entire security, street maintenance and administration of the estate are managed by the developers.
While the experience so far of private provision of municipal services has been mixed, citizens clearly want performance commitments from their administrators. New public-private-partnership models will need to be evolved. Typical PPP models prescribe the physical characteristics of the desired project (a road from point A to point B) to be delivered by the private sector. However, city infrastructure is typically a dynamic network (e.g. urban transport systems), and the planning function needs as much expertise as execution and operations.
The planning function also requires much closer coordination across sectors (housing, water, waste, transport, etc), leading to the need for city-management agencies. Finally, the issue of financing, of levying and collecting user-charges, and the mechanisms for subsidising those that need to be provided services below cost, are equally challenging. While there are examples overseas to draw lessons from, eventually, India will need to evolve its own set of models to address these requirements.
The writers is executive director-government reform and infrastructure development, PwC India. Views are personal.