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Source: Jones Lang LaSalle

Infrastructure Deficit - Bane of the far suburbs

It is a latter-day fact that project development on the outskirts of Indian metros begins before the necessary infrastructure has been put down.

By Ashutosh Limaye, Head - Research & REIS, Jones Lang LaSalle India

It is a latter-day fact that project development on the outskirts of Indian metros begins before the necessary infrastructure has been put down. This happens because demand for developed spaces in cities like Mumbai, Delhi, Bangalore and Chennai is high enough to make even hastily established projects financially feasible for developers.

Absorption of affordably priced projects is literally guaranteed, no matter what the drawbacks of the location are, and the land prices are much lower than they are closer to the city centres. For this reason, the pace of development in fringe suburban areas is always higher than in more central locations.

If the fringe location in question is within the city's corporation limits, the acuteness of the infrastructure problem tends to be lower, since the corporations of the larger cities have the financial clout to put the necessary facilities in place. However, if the area falls outside a city corporation's jurisdiction, infrastructural development is at the mercy of gram panchayat-level bodies that lack resources as well as vision and willingness.

The Case Of Mumbai

The phenomenon of development outstripping a location's infrastructure is very visible in the fringe areas of Mumbai. Apart from Navi Mumbai and Thane, all other outlying locations suffer from a chronic infrastructure deficit. Cases in point are Mira Road-Bhayander, Vasai-Virar, Kalyan-Dombivili and Ambarnath-Badlapur. These areas do, in fact, have their own municipal corporations, but these entities are ill-equipped to handle the relentless demand for proper facilitation of their jurisdictions. While they realize the problem and have done much planning, we have seen no implementation on the ground.

Part of the problem lies in the fact that city municipal corporations have to work together with the State Government in order to deploy significant infrastructure projects.  The first issue therein lies in the implied bureaucratic disconnect and the assignment of responsibility for implementation and timely completion of such projects. At yet another level arises the question of funding. If it is to be raised through the Public Private Partnership ,  local agencies are not always empowered to launch such an initiative.

Meanwhile, most areas in the far suburbs continue to suffer from lack of proper roads, water and electricity supply, sewage systems, public transport, hospitals, schools, etc. Moreover, many of these areas do not have strong economic drivers to encourage implementation of infrastructure projects. These drivers exist mainly in the Mumbai Metropolitan Region. Many of the fringe suburbs serve solely as residential bases for those who cannot afford to live closer to their workplaces in the more centralized locations.

Precautions And Remedies

Because the demand is so high, end-users are forced to overlook the lack of infrastructure and move in regardless of the inconveniences they will face afterwards. However, residential property buyers whose circumstances require them to seek out the less enabled locations can still ensure that the necessary infrastructure  exists at least at the project level. They should choose to patronize progressive developers who ensure that their projects have independent water supply in the absence of a reliable municipal pipeline, electricity backup to compensate for erratic power supply, sump pits in the absence of adequate sewage, etc.

Ultimately, an infrastructure gridlock cannot exist forever without some action being taken.  Much can be learned from the Ahmedabad Urban Development Authority (AUDA) which ensures that the land they acquire from individual holders is properly developed. This body has implemented large-scale infrastructure reforms that do not necessarily involve huge budgets.

The AUDA model centers around acquiring a larger tract of land, infrastructure-enabling a significant part of it and returning that component to the owners as developed land that has immediate market value. In return, they retain the remaining part for further development of their own projects.

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