Tapash Talukdar, ET Bureau Mar 28, 2010, 02.43am IST(ECONOMIC TIMES)
As we take the road towards Dholera, a group of farmers welcome us with a wave of their hands. The excitement is clearly visible in their eyes. And why should they not be? If all goes according to the plans of the Delhi Mumbai Industrial Corridor Development Corporation (DMICC), the villagers would soon be seen travelling in new-age trams for intra-city commutes. So are they ready for the ride? “It would be an exhilarating experience,” says Maganbhai Sonaria, a tea vendor. The tiny village with a population of 4,500, mostly farmers who grow wheat, jowar and cotton, is prospering and looking forward to a sea-change. Dholera, which is situated in Ahmedabad district in the Gulf of Khambhat, is in proximity to road transport infrastructure and sea-port facilities. And what’s more, the government has proposed to build an international airport near Fedara, 30 km from Dholera.

Hardevsinh Chudasama has much to be happy about. After all, he owns one of the best plots of land in the heart of a town, where MOU that will bring in over Rs 1 lakh cr of investments have been signed last year. The proposed special investment region (SIR) will be the first-of-its-kind to be created in the state. To Chudasama’s surprise, the piece of land that his forefathers bought two decades back for a few hundred rupees is already being valued over Rs 1 crore. Chudasama, a son of a farmer, is also the village panchayat head, and he is buoyant about his village. “The land prices here have quadrupled in the last two years,” he says while showing some plotted land from inside his small glitzy office. And his eyes don’t stop there. Pointing at the highway, he tells us, “Soon we will have 185 kilometres of six-lane roads.” The roads are being built at a cost of Rs 1,584 crore to be linked with the Delhi-Mumbai dedicated freight corridor.

Dholera also has greater possibilities of building modern port facilities. “We have heard that Adani group might consider plans to build an eco-friendly port here,” says Bhimsinh Zhala, a local vendor, who owns 80 sq yards near the highway. With each passing month, Zhala has more reason to cheer as his small plot of land has many takers. “But I will wait for the right price, which is yet to come,” says Zhala, However, his 21-year-old son, like a true Gujarati prodigy, has already sensed the right opportunity to make big money and, therefore, has rolled out a tiny mobile-retailing shop adjoining his father’s business. “As construction activities kick-in, our business will certainly grow,” hopes Anirudhsinh Zhala.

And this is not all. There are dozens of them in this water-scarce village who are looking at selling their land at high prices. For decades, these villagers have struggled to obtain water to produce their main crops.
DHOLERA, India | Thu Oct 27, 2011 3:01pm IST
(Reuters) - Chotubhai Raghani’s fields in a dry, salty strip of Indian coastline on the Arabian Sea never yielded much wheat but he feels like a lucky man now he’s started selling them at a juicy markup. He expects his land may one day make way for a car factory or a nair-conditioned shopping mall, all part of what may be India’s most ambitious infrastructure project ever. Excitement is rising almost as quickly as land prices in his village, one of the sites chosen for building 24 industrial cities from scratch along a 1,483 km (920 mile) railway line.

The government plans to build a corridor bigger in land size than Japan, stretching from New Delhi down to the financial hub Mumbai in the west, that could help transform India’s economic landscape and give its choked, teeming cities room to breathe.

For video on India’s grand ambition, click link.reuters.com/xub64s, For video on India’s rail ambitions still, click link.reuters.com/gyb64s, For video on New Delhi-Mumbai manufacturing hub, click link.reuters.com/hyb64s, For interactive graphic, click reut.rs/vK5bhP.

“It’s going to change our lives,” said Raghani. “We’ve tilled this land for generations but we only get a small mouthful out of it.” Sceptics call the $90 billion project, known as the Delhi Mumbai Industrial Corridor (DMIC), over-ambitious. India, bogged down by corruption, staggering bureaucracy and land battles, has a long history of failed infrastructure plans.

“It’s a very crucial project for supporting GDP growth,” said Pratyush Kumar, President & CEO of GE Transportation in India, a company with interests from railway engines to wind turbines. So far it is not involved in the DMIC project.

“Nobody is saying that it’s not moving, but the glacial pace will choke the GDP ambitions,” he said. “The pace has to pick up and they need to get away from this whole decision-making paralysis of ‘hey, we can’t award large projects because of all the scams’.”

If the DMIC fails, Prime Minister Manmohan Singh’s government will have lost a golden opportunity to sell India to investors and will feed the perception that, unlike China, it lacks the will to act when it counts. If it succeeds, the project could be the jolt Indian industry needs to sustain the country’s heady economic rise. The timing couldn’t be better amid global financial strife, rising interest rates and domestic policy stagnation caused by government corruption cases that have dampened confidence.
New Delhi has earmarked an initial fund of $4.5 billion to build the core infrastructure of each city, such as roads, power supplies and sewage treatment plants, and expects a similar contribution from the project’s partner, Japan. Once the basics are there, the thinking goes, investors will be convinced of the DMIC’s value and will build factories, housing and more in a public-private partnership. The government can then sell them the land it has acquired from farmers, using the funds to start building the next city. Despite years of economic boom, India’s infrastructure is rickety and its manufacturing sector sluggish. Transporting goods is expensive and slow -- it can take more than two weeks to move a container from Delhi to Mumbai. It is hoped the new freight line will slash that to under 24 hours.

“If India does not create new cities, many of its existing cities will be slums,” said Amitabh Kant, the civil servant in charge of the project. The idea for an industrial corridor took shape in 2006 as a deal hatched by the governments of India and Japan, inspired by a similar project around Tokyo that helped Japan’s economic rise after World War Two. Work on the first hub, Dholera, is to start shortly, with Indian firms Mahindra Lifespace Developers Ltd. and Hindustan Construction Co Ltd already on board. Plans envisage Dholera being transformed from a cluster of small villages and hamlets, where cows laze to the sound of women pounding clothes in the village pond, into a city of 2 million people by 2040 with its own international airport. If all goes to plan, Dholera will become a magnet for engineering, electronics and pharmaceutical firms, helping meet the corridor’s target of doubling employment and tripling industrial output across the six states through which it runs.

“I am eagerly awaiting the day that a plane lands in our village,” jokes one sceptical farmer as others around him laugh. Although building even a single highway can be achingly slow in India, a crowded democracy of 1.2 billion, the DMIC project may have enough going for it to prove doubters wrong. One big plus is Kant himself, a widely respected official who is no stranger to selling India’s image abroad. He was the architect of a flagship ‘Incredible India’ tourism campaign that sought to dispel stereotypes of snake charmers and touts. Authorities in the DMIC are also trying hard to minimise risks to potential investors while ensuring that the farmers get a good deal, obtaining clearances and negotiating land sales.

This is somewhat unusual for India, where a major deterrent for businesses is that they must first bid to build projects before wading in to acquire land or permissions from umpteen ministries, with all the hassles and delays that entails.The DMIC is being kicked off by Gujarat state, a favourite of investors who like its lack of red tape, easy land sales and ambition to become a global industry powerhouse like China’s Guangdong. Raghani, and many others like him, were happy to sell their land -- a marked contrast to the deadly clashes over land that have happened elsewhere in India.