Gujarat to become India's first special investment region

With the first two phases of town planning and zonation completed this month, the country's first special investment region (SIR) at Dholera in Gujarat is set to take off. The endeavour in Ahmedabad district is likely to bring investment amounting to $90 billion to the western state over the next ten years.

To be created around the Delhi-Mumbai Industrial Corridor (DMIC) with financial cooperation from Japan, the project has already attracted attention -- not just for its unique land acquisition model, but also for the financial and investment opportunities it will represent.

A delegation of 150 senior management-level Japanese investors engaged in business ranging from manufacturing to banking to trading and logistics will be in Ahmedabad this Thursday to assess opportunities in what will be the world's first real smart city.

An SIR is different from an SEZ (special economic zone) —it is bigger and is not merely export-oriented; instead offers a range of services. In Dholera, for instance, a residential city to grow vertically based on digital planning will coexist with industrial estates, a hub of financial and banking services and educational institutions.

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Dholera -- an ancient port-city in the Gulf of Khambhat -- has benefited from its location. It is largely arid, saline land, where agriculturists have no pangs in parting with their land because farming is so difficult.

The government has acquired land after three rounds of intensive consultations with landowners. Even then, it could acquire only 50 per cent of the land needed. The rest is still with the farmer who can, after it appreciates in value, either sell it to developers outright, or claim a share in its development later, or sell it to government.

"This model will avoid situations like (western Uttar Pradesh's) Bhatta Parsaul," said Gujarat Resident Commissioner Bharat Lal. "There farmers got compensation for the land they lost owing to acquisition, but the government later sold it to developers at very much higher rates. This gave the farmers the feeling of being cheated."

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When finally completed, the SIR will span 903 sq km on both sides of the DMIC. Almost two-thirds of the proposed investments in the DMIC project is expected to take place in Gujarat alone.

The identified industrial nodes will be developed as global manufacturing and commercial hubs. All kinds of infrastructure both within and outside the nodes will be developed to global standards.

The biggest strength of Gujarat is its long coastline and operational major and minor ports on it. The goods manufactured in the DIMC Industrial nodes can be exported through Gujarat ports.

The imported goods from the Gujarat ports could also be sent more efficiently to the northern Indian hinterland through a dedicated freight corridor (DFC).

But there lies the rub. While the DMIC -- the Gujarat leg -- is being developed at supersonic speed, the DFC is lagging way behind, crippled by issues of coal linkages, land acquisition and planning problems.

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Infrastructure experts say Dholera might become a showcase Indian city. But no one will go there if there is no means to run trains to and from it.

That is a problem the Gujarat government is grappling with as well. But in the meantime, work on Dholera is going on apace. British infrastructure development Halcrow was contracted as the master planners. Cisco and IBM have got the contract to develop Dholera as a smart city.

This means, it will have a centralised digital control of all infrastructural facilities such as water, power and gas traffic through an underground sensor system reporting to a central control room.

DMIDC said it would be hard to create such modern systems in existing cities, because you would then have to dig up roads. "With this system in place, for instance, no one who lives in Dholera will ever get stuck in a traffic jam," pointed out DMIDC chief Amitabh Kant.

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"For, the system will automatically sense where traffic is being held up. It will ask travellers via SMS to avoid certain roads. There can be no theft or wastage of water or power, because the advanced systems will assess how much water and power you actually use."

Some infrastructure experts believe the whole model is flawed. Even as they concede that Gujarat is the most ready for DMIC, they say the city's planning approach to DMIC is wrong -- in the absence of freight facilities.

But the Gujarat government is bullish about the project that represents unprecedented state-Centre cooperation regardless of political differences.