Bombay looks for more space

ATTEMPTS to reduce congestion in Bombay have taken on a new dimension in this era of deregulation of the Indian economy.

A Maharashtra state administration think tank has proposed that a self-contained high tech city be built.

Its location is yet to be decided, but the official consensus is that it should be within 200 kilometres of Bombay.

Sources said the state planned to retain control of the proposed modern township.

Maharashtra is one of India's most industrially advanced states, but it faces stiff competition from other states seeking foreign investment.

It recently suffered a setback when Gujarat won three big projects offering special concessions.

The new township plan is at an embryonic stage but advances made in other states are expected to spur the local administration into action.

The northern state of Haryana is talking about building a township on a Japanese model. Singapore has offered to build a modern city near Bangalore, the capital of Karnataka in the south.

'A blueprint (of Maharashtra's new township) will be ready within three months,' said Yeshwant Bhave, development commissioner.

What lends urgency to the state's plan is soaring real estate prices in Bombay that are scaring away companies from locating their head offices there.

Many multinationals that have come to India over the past two years have preferred to locate their head office in New Delhi rather than in Bombay.

Despite being India's prime commercial centre, Bombay has also lost some of its existing corporate residents. Some have shifted their headquarters to other cities, with Britannia Industries' relocation to Bangalore being a recent example.

According to a survey by Fortune magazine late last year, Bombay was the world's third most expensive city, with annual office rents averaging about US$80 per square foot.

Tokyo was the the most expensive at $145 per sq ft, while Hong Kong was ranked second at $96.31 per sq ft.

For outright purchase in the upmarket Nariman Point area of central Bombay, offices fetch 30,000 rupees per sq ft (about HK$7,500 per sq ft).

In midtown Worli, prices average about 20,000 per sq ft, and in the uptown Bandra-Kurla area, a site earmarked for building a modern financial centre, the price is about 15,000 rupees per sq ft.

McKinsey, a firm of international consultants, has recommended revitalising Bombay as a services capital.

McKinsey was commissioned two years ago to formulate a package that would place Maharashtra in a good position to achieve economic leadership in the liberalisation era.

McKinsey's plan incorporated three important suggestions.

The first was to evaluate the feasibility of building a large services-oriented free trade zone to exploit air and sea access.

It recommended developing and promoting the city's global research and development role, and finally urged reinforcement of Bombay's reputation as India's media and entertainment capital.

Bombay is an island bursting at its seams with a population that is nearly 10 million strong. Expansion is only possible by building higher or by choosing sites that are at least 25 kms from Nariman Point.

As a result of the limited space, slums have multiplied. Bombay boasts Asia's largest slum, Dharavi, in the centre of town.

The problem of Dharavi is already a quarter of a century old and may last another 25 years unless the new township can manage to divert the streams of unemployed people who at present make a bee-line for Bombay.

The state administration has thus twin priorities of improving the quality of life in slums and attracting foreign and Indian businesses to set up shop in Bombay or the new township.

The City Improvement and Development Corporation (Cidco), was set up in 1970 with a mandate to build, in phases, a new 350 sq km city on the mainland across Bombay. Cidco has spent 33.17 billion rupees over the past 25 years on what is known as New Bombay, but only seven out of 21 sub-projects, into which the planned New Bombay was divided, have been executed.

Cidco has proved unequal to the task. It had a 30-year horizon to house two million people in New Bombay.

The infrastructure has been fully stretched, as more than 328,000 people are added every year.

In addition, Cidco has suffered from financial constraints and is in no position to accelerate its tempo.

Probably, if it had had the required cash, Cidco would have conceived and planned bigger and faster.

It will be a tough task to build the new township that Maharashtra wants, and Cidco may have to harness overseas expertise.