Gurgaon: Nirvana 2010?

CITIES The suburb is creaking under the weight of its own growth

A 16-and-a-half-hour power switch-off! That's what the power supplier to Gurgaon "" Dakshin Haryana Bijli Vitran Nigam "" announced for the industry as the year 2008 began. Other users were let off with a kindlier nine-hour "cut", but that is too dignified a word for what can only be described as a system breakdown in a city which was, at one time, being looked at as a model for the rest of the country.

It is a city creaking under the weight of its own growth. And the appaling power situation is just one example of that. Clogged roads are another. The water table is fast depleting. Law and order is an area of concern. And then there is all the sub-city infrastructure "" sewerage, water drains, waste management "" which is far from model, if it exists at all.

Realty rates have shot up reflecting the huge gap between supply and demand. Every new project in the city means an additional load on the already stretched, and scant, infrastructure of the city, leading to some rather extreme suggestions from those who have already got a foot into Gurgaon.

"They should not allow any more investment for the next few years. The infrastructure cannot take it," says an agitated Mohit Jain, the past president of the Gurgaon Chamber of Commerce and Industry and director of the Gurgaon based The Malt Company (India) Ltd.

This attitude reflects quite a U-turn for a city which has thrived on the growth and population spillover from Delhi. Part of the National Capital Region (NCR), Gurgaon evolved from an old economy style manufacturing hub (think Maruti) to a new economy suburb, exporting garments, software and services around the world.

It has become modern, younger and trendier (think malls), all thanks to private enterprise, and to realty developers like DLF, who have built islands of "excellence" for commercial and industrial users in an erstwhile village.

But they are just that "" islands! Despite the fact that developers have paid what are called external development charges to the state government, they are still waiting to see development beyond their immediate boundaries. "I see the city as a classic urban disaster," says TCA Srinivasa-Raghavan, a Business Standard columnist who is also associated with the Asian Institute of Transport Development.

POOR GOVERNANCE OR OVER-INVESTMENT?
Most blame the disaster on poor governance, a claim which is vehemently denied by the state government.

The crises, I am told, is a natural outcome of all the investment that has poured into the state "" and Gurgaon city "" since the Congress party took over the reins of government three years ago.

"The state attracted Rs 60,000 crore worth of investment since it was formed in 1966. We have managed Rs 45,000 crore investment in the ground in the last three years...and further investment proposals of Rs 78,000 crore are in the pipeline," says Haryana's Power Minister Randeep Singh Surjewala.

The increase in business activity is also one of the reasons for the power crises in the state, which is a part of a larger countrywide problem of shortage of power. "Haryana is facing a power crises, like the rest of the country," says Surjewala. Ironically, Haryana was the second state in the country, after Orissa, to embark on the road to power reforms in the late 1990s.

The problems are so acute that companies already in Gurgaon are expanding "out" of Gurgaon, attracted by the tax concessions given to the special category states like Uttarakhand, lower realty and labour rates in neighbouring states like Rajasthan or states which offer other competitive advantages.

Leading apparel exporter Orient Craft for example is now setting up new units in Andhra Pradesh. "We are looking at cheaper locations," admits Sudhir Dhingra, the managing director of the company. He is one of the many investors who end up paying about Rs 10 per unit of captive power against about Rs 4 for state generated power.

This has dented margins, especially for power-intensive industries. Some companies, especially auto ancillaries, are looking at the option of "importing" power from other states by utilising open access regulations, according to Sambitosh Mohapatra of PricewaterhouseCoopers, but surplus power is hard to come by in the region.

There is no intra-city transport system and the connectivity with Delhi is also fairly limited for those without a private vehicle. Rajeev Talwar, group executive director at DLF, identifies connectivity and power as the two main bottlenecks which need immediate action. It, however, continues to draw people from across the world. Sample this call which was received in the city from Pennsylvania last week.

THE CONTRA SIGNS
"Hi. We are looking at setting up a base in Gurgaon. Can you guide us." Kavita Nair, deputy director at the Confederation of Indian Industry (CII) who is in charge of the Haryana cell, gets a few such calls every week. More people want a foot into Gurgaon rather than a step out, especially those associated with the services sector.

Look at the good things that Gurgaon offers. It is more spaced out than Delhi. It is close to the airport. Residential and commercial spaces are modern and well-equipped. And then there is the TINA (There Is No Alternative) factor. Since minimum service standards for modern Indian cities are still-in-the-making, there is no clear benchmarking of cities that is possible today. Gurgaon supporters contend that there is hardly another city which compares with theirs.

"Where are the choices? Can you tell me one city in the country where infrastructure is okay? I think Gurgaon is the best," says RICO Industries managing director Arvind Kapur, who is also the chairman of CII's Haryana state council. Agrees Mohapatra of PWC. "Urban infrastructure planning has been missing in most of the country. There are no better models as of now."

And the denizens of the city are trying to work on solutions themselves. About six months ago, CII, along with Gurgaon Industrial Association and RICO Auto approached the Haryana electricity regulator to propose a replication of the "Pune model" in Gurgaon urban area whereby all the captive power capacity available in the city can be fed into the grid to ensure uninterrupted power supply, albeit for a price.

To address the declining availability of water, CII is also pushing for sops for construction of water harvesting structures, which it wants to make mandatory for every building.

Connectivity has already improved with Delhi, thanks to the expressway though the toll continues to be an unwieldy Rs 16 or Rs 24 or Rs 49, depending on your vehicle type. Why the toll cannot be a rounded number, which does not involve a struggle for loose rupees, is foxing.

The power problem is set to be resolved in the next two years, promises Surjewala: "We are adding 7,000 mw over the next four years (5,000 mw within the state and 2,000 mw to be secured through competitive bidding from other states) to wipe out the demand-supply gap. We are also investing an unprecedented Rs 14,000 crore to augment transmission and distribution systems."

The connectivity problem will be largely resolved with the metro coming in. As for intra-city transport, there are a few proposals floating around. "One change that we see is that projects are actually happening," says CII's Kapur. And if that trend continues, Gurgaon may yet offer nirvana to its residents by 2010. 

(With Inputs from Rupesh Janve)