Mega City Mumbai

The Indian IT Outsourcing Company today owe their success as one the leading software development companies in the world to its enormous pool of skilled software professionals. The sprawling urban centers like Bangalore, Hyderabad, Delhi, Mumbai, Gurgaon and Nodia have earned India worldwide recognition for its software industry and made it global software outsourcing hub.

However in the recent years explosion in the human population in these cities has overburdened the infrastructure. The tier 2 cities today face growing challenges of crumbling infrastructure, higher living and telecommunication costs, higher attrition rates, increased competition from foreign offshore centers, terrorism threats and decrease in quality of life. These factors are hurting the Indian software industry on whole because these mega cities are the nerve centers of the Indian software outsourcing industry.

The answer lies in looking beyond the IT havens to two –tier cities, which offer Indian IT Outsourcing Company ample room comfortably accommodate their IT infrastructure needs in a cost effective manner. Two–tier cities like Pune , Chandigarh, Ahmedabad, Jaipur, Chennai, Rajkot and others provide a great  opportunity to for the Indian  software outsourcing companies to set up their development centers at reduced infrastructure costs. These cities have the requisite infrastructure and good colleges that consistently churn out talented workforce every year. Compared to Tier-I cities like Bangalore, Mumbai and Delhi the IT development cost are very less because of cheaper living costs and availability of the skilled workforce. The increasing population in Megacities has pushed up the living cost of the employees which has naturally increased the IT development costs of the IT Outsourcing Company.

The recent passage of anti-outsourcing bill by the US Senate will definitely hurt the Indian IT outsourcing business. The Indian outsourcing companies will now have to rely more on offshore outsourcing model to get around this legislation. The increased competition from other outsourcing destinations like China, Philippines, countries Latin America and Eastern Europe is also putting pressure on the Indian IT Outsourcing Company to look beyond Tier cities like Bangalore, Delhi, and Mumbai to the greener pastures of Tier 2 cities.

However the inspite of promises that Tier 2 cities hold for the IT Outsourcing Company, lot of work needs to be done yet to bring them on the world IT map. The infrastructure development is cheap but such cities are still prone to problems like improper infrastructure support services, problematic telecommunication connectivity, lack of IT parks that offer tax benefits, shortage of senior level and middle management employees.

The Indian Government should focus more on infrastructure development of the tier 2 cities and offer tax benefits to the Indian IT Outsourcing Company to invest there. The software outsourcing companies will have to pay handsome salaries to the skilled and innovative managers relocate them from the tier 1 to tier 2 city. This, however in the long run this will prove beneficial because the overall development costs will come down, considerably.

This will also be a blessing in disguise for the Tier 1 cities as it will take off some burden from its overburdened infrastructure. Thus proper development of tier 2 cities will certainly benefit the Indian software outsourcing industry and help it to retain its present number one spot in the world for long time to come.

In a casual dinner evening with a few ‘intellectual type’ friends, I popped the question of ethnic branding for modern habitation hubs. I didn’t realize that the cat was being let amongst the pigeons. Everybody latched on and debated – surprising, most were pro-ethnic branding. Names like ‘creek wood ridge’, ‘Ridgewood creek’, and ‘wood creek ridge’ (pun intended) were rejected outright.

Everyone expressed the desire to live in modern townships, with good infrastructure and public transport system, but with ethnic values & connotations. Some suggestions flowed for names like Harappa, Sampark, Takshila, Sapoorna, Sameeksha, Mannat, Vedanta, Abhimanyu, Lok-vatika, Stupa, Akanksha, Panchvati, Sukoon etc. A few hours of debate, and we all headed home.

A few weeks down the road, I started my research on the emerging scenario, in the Delhi-NCR region, with specific emphasis on the Delhi master plan MPD 2021. I came across the amazing story of the proposed 5 Mega-cities in Delhi. This is how it is unfolding.

Under the MPD 2021 master pan of Delhi, the government is planning five new mega cities. These are cities in the true nature of the word. They would be self contained and would consist of housing, shopping & market-place, universities & education, modern transportation including metro connectivity, leisure, parks & landscape, amusement hubs, exhibition areas, arts & cultural centres, and every form of indulgence and goo health living.

In the words of Mr. Dinesh Rai, Vice-chairman of DDA - "These mega cities have been planned to accommodate 60 per cent of the 230 lakh population by 2021. The DDA board has cleared the draft zonal plans, which provides for these mega cities. These will be finalised shortly."

Another member of the planning committee mentioned that “the intent is to accommodate the growing population within the existing urban limits by active redevelopment of some of the existing areas, and by the extension of the current urban limits.” Having absorbed the official tonality of the comment, I would see this as a drive to urbanize the rural (so-called) areas of Delhi, and create spanking new townships there, rather than just focus on creating housing.

Some of the design features, as proposed are as under:

 
a) Modern urban design – Evolving these cities and integrate with the vision of making Delhi a world class metropolis. (for a change, a government policy document says – “facilitate creation of signature projects”.

b) At least, 20% of the total land under development to be green areas.

c) Allow super tall structures. (A cut away from the plaid DDA built structures). The proposal seems to be to remove unnecessary controls of height etc.

d) Well connected, internally and with the other townships through expressways, Metro-rail, elevated corridors, other mass rapid transport systems and an efficient public transport.

e) Well laid out utility and facility corridors in all the cities. Create influence zones along MRTS and major transport corridor. Promote IT and other new-age businesses.

f) Blend our culture & heritage into the modern development.

g) Public interest sectors like Health, entertainment, education, sports facilities, standards of water supply to be supported with additional FAR & incentives, wherever applicable.

h) Disaster management centre provided in each administrative zone.

i) Elderly and disabled friendly city development.

j) Almost 8-10% of total land for development to be for the use of public & semi-public utilities.

The proposed draft master plan approved by the DDA encompasses more than 60,000 hectares of land, for development. It provisions for providing livelihood and shelter for a population increase by almost 75 lakhs, in Delhi. Almost 2.4 million new dwelling units are forecasted to be created. Almost 35% of these developments into housing & shelter would cater to the economically & socially weaker segments.

To augment this gargantuan task, a very healthy, proprietary and ‘spirit of ownership’ driven approach would be undertaken to involve the private sector in the development of the “Robust Delhi”. Let us now come to the five mega townships, their distribution strategy and how the analysts see the evolution. Let’s not forget that the last mega-city of sorts was Dwarka. (In terms of size).

Graphical notation of the 5 mega cities below.

From the map above, we can theoretically come to a conclusion where these five mega cities would come up. Each talks about some mind numbing number of acres under development. Let us read through them too, before we start analyzing where the money is going to flow into. Going forward, we can also do a SWOT of the same, to ensure that “our money is where the conviction goes!”

AREA – ZONE WISE – PROPOSED UNDER ZONING.

LOCALITY NAME OF ZONE IN MPD-2021 AREA Ha
South Delhi - II                               J                        15178
West Delhi & Dwarka                    K                       12190
West Delhi III                                 L                        22840
North west Delhi III                        N                       13975
North Delhi                                     P                       18400

All above approximate only. Source: draft document for MPD 2021 and www.delhi-masterplan.com

WHAT DO THE ABOVE MEAN FOR US?

The cities that hold the most promise, to my mind, are the ones which can accommodate the aspirations & needs of people seeking to either buy their first home OR upgrade their lifestyle.
They would be concentrated in the following three areas / zones.

a) South Delhi – The huge land tract adjoining the current developments of South Delhi, namely the zone ‘J’, would be one of the most sought after areas. The attractions in this zone would be the proximity to the existing developments, the connectivity including the metro and the lure of being in ‘south’ Delhi. We see the developments in this zone to be skewed towards the premium pricing, compared to some other zones. Developers Beware!!! Most prospective buyers in this new zone would ask for “MORE”. More value, more features & benefits, more value and more differentiation in the product that they would seek to invest. The flip side being that some of the developments would have to be undertaken taking into account the contours of the land available, and the density of population already in the area.

b) South west Delhi – This is one exciting belt for development opportunity for exciting modern townships, with all modern features & amenities. This is the area closest to the existing developments of Dwarka and the Delhi International airport. It would extend from the Bijwasan area upto Najafgarh. It would form part of the L and K zone, under the Delhi master plan MPD 2021. The existing contour of the land is flat, and the soil is soft and loamy, not rocky or marshy. The Najafgarh canal runs through this area, and some enterprising developers can make use of the canal to form part of their developments. There are 100 metre, 90 metre, 75 meter and 60 metre expressways and major roads which are proposed to be running through this zone. This zone also would be connected to Gurgaon through the 150 metre expressway, and would have direct access to the various SEZs planned around the KMP (Kundli-Manesar-Palwal) expressway and Pataudi road. This zone might have all the product categories and price ranges to offer; from Luxurious farm houses to mid end plotted developments to economy apartment projects.

c) North West Delhi – I am personally enthused about the opportunities in this zone, more from the perspective of returns on the investments, at the current levels. This area is north of the Delhi-Rohtak road and touches the developments of Rohini on one end. From the Heart of Delhi and the CBD areas, this zone would be well connected with the metro connectivity on almost 3 sides. This zone also would be connected to the Airport & Gurgaon through the 100 and 150 metre expressway. This zone also would be host to the “MINI INDIA” & “SAUNDARYA EXHIBITION” projects, in Kanjhawala. Also, DSIDC plans to have its projects spread over 950 acres in this zone. Since the Haryana government is planning economic corridors and new townships further down the Delhi-Rohtak road, a township with economic activity and affordable residential areas, within Delhi, would make immense investment sense. Most of all, while investing in land, my utmost consideration is always on how much would it appreciate, rather than how much is it today. When both being conducive, it becomes an immediate investment proposition.

Given the assumption that the projects and products envisaged would be created as it is planned & proposed, I forecast great value in living in these 05 mega cities in the future. I would love to look forward to step out of my 20th floor apartment, walk to work, through tree lined boulevards, take the metro for shopping, have leisure and relaxation avenues close to my home, and generally uplift the standard of living.