A ‘Little Japan’ on 100 sq km in Gujarat
A ‘mini-Japan’ may take shape in Gujarat soon. A high-level business delegation from the Japanese External Trade Organisation (JETRO), which visited Gujarat last week, has asked the state government to provide a vast area of 100 square kilometres, where the Japanese could build their own township.
The land has been sought along the ambitious Delhi-Mumbai Industrial Corridor which the Japanese government is helping to build.
“We have given them maps of the areas we can offer, so that they can have a closer look,” a senior government official said after a meeting with nearly 40 top business executives who formed part of the delegation looking for opportunities along the DMIC.
The request to provide land for an exclusive Japanese industrial township came from JETRO vice-executive chairman Sunichi Yamamoto. The idea first cropped up during Chief Minister Narendra Modi’s visit to Japan in April 2007.
Now, it has been left to the Gujarat Industrial Development Corporation (GIDC) to work out details of the township with JETRO. The Japanese will return soon with a finalised location. Major industries keen to set up their offices in the township include Toshiba, Sumitomo, Chisso, Fujitrans.
The township will be primarily industrial and complete with residential complexes, medical, health and recreation facilities, restaurants, educational institutions. “Japanese companies will set up base here and will build the required infrastructure as per Japanese standards and requirements,” the official said.
The official further said there is a tendency among Japanese to live in a cluster and feel at home wherever they are in the world. A similar project had been taken up in Thailand which has proved to be a successful model. The aim would be to give families of Japanese executives and workers a distinct flavour so that they don’t miss the environment back home.
The township will come up in any of the special investment regions’ (SIRs) corridors proposed for development in the DMIC - Ahmedabad-Dholera, Ankleshwar-Vadodara, Dahej-Bharuch and Mehsana-Palanpur.
Tata moves to Gujarat kindles investment interest
On Thursday morning, Kaushal Mehta, the CEO of Ahmedabad-based Motif, woke up to a mail from a foreign business associate. The question was never put to him before despite his average six trips abroad every year.
His US-based associate learnt about the relocation of the world’s cheapest car in Gujarat and was wondering if the state was the right choice for his proposed $100-million semi-conductor plant. The successful entrepreneur and a venture capitalist from the Silicon Valley was earlier toying with other states for his proposed plant. But now, the American seems to have made up his mind.
Tata’s small car has indeed turned out to be a mega ambassador for Gujarat in 48 hours flat. Ever since Ratan Tata announced the relocation of Nano, a host of industrialists from the state received passionate enquiries from their business partners abroad looking for investment in India. Mukesh Bhandari, the chairman of Ahmedabad-based Electrotherm India, which gave country’s first e-bike, YoBykes, said within 24 hours of the Nano announcement, a French electric vehicle player approached him to discuss about the state of Gujarat and the prospects of investment here.
Textile major Chiripal Industries, too, has already received enquiries from a domestic player seeking investment in Gujarat. “The company intends to diversify and bring technical textiles under its ambit. It is in talks with us to set up its manufacturing facility around Ahmedabad,” director of the company, Vishal Chiripal told ET. “Nano has created industrial goodwill all around. It was a high-voltage event that charged up everyone. Our overseas buyers are enthusiastic about the developments and have been inquiring about the $2,500 car and investment climate in Gujarat. Textile players from Dubai and France, keen on investing in India, are asking about the infrastructure of the state and the administration.”
Another state-based leading homelinen exporter which recently acquired an international brand received enquiries from a US-based technical textile player willing to set up shop near Ahmedabad. “With Gujarat emerging victorious, the state is being perceived as a top investment destination,” said Mr Mehta. Nano’s international fame for being the cheapest car has suddenly put it on the world map. Only today I received a mail from a US-based company interested in setting up a $100-million plant, asking me how I could help them in facilitating the investment,” said Mr Mehta.
“Nano’s presence has clearly brought us recognition from international quarters. For those in the know of things, Nano will reaffirm their belief in the state. Investors will come in flocks now,” said Mr Bhandari.
How Gujarat managed to bag the Nano deal
More than a century ago, Jamsetji Tata had donated Rs 1,000 to develop milch cattle and grazing land for the British army around a 1 km patch in Sanand, 35 km from Ahmedabad.
It was a huge amount of money then. Over a hundred years later, the descendants of the sons of soil remembered the gesture.
But much before that, the Nano deal had almost slipped through Gujarat chief minister Narendra Modi’s hands.
Gujarat Inc welcomes Nano
There were three states shortlisted by Tata Motors for the Nano small car project —- Andhra Pradesh, Maharashtra and Gujarat.
Gujarat wasn’t hotly pursued till just a fortnight ago.
When the Tata team met senior officials of the state in the third week of September, they were sure the deal would not go through. Both regions were familiar to the group as Tata Chemicals has a sprawling complex at Mithapur, which makes soda ash and salt.
Then there is the ultra mega power project of 4,000 mw that the Tatas are setting up at Mundra, using the coal import terminal of Mundra Port. What appealed to the team was that land was available aplenty. The port would allow them to import steel and other raw materials at very low cost even from overseas. Transporting the same over land would cost thrice as much.
Then there was the added benefit of power —- the Tatas could draw on power from their own plant in Mundra or from the Tata Chemicals power plant at Mithapur.
Wheeling in power this way is permitted by the Gujarat Government. But talks later floundered on the issue of financial incentives.
‘Tata’s Gujarat deal will strengthen auto industry’
Modi did not want to disrupt the level playing field he had managed to create for all industry in Gujarat over the years. After all, he had recently even gone on record to say Gujarat would not offer backward-area incentives any more.
Implicit in the statement was the realisation that “backward region” was a slur, and that when concessions were pushed beyond a point, they hurt companies that didn’t benefit. Not the recipe for a “Vibrant Gujarat”.
That being the case, senior state officials thought there was slim chance of pulling in the project. Then three things happened. One, conditions did not improve at Singur.
Two, when the Tata Motors team visited Andhra Pradesh, they were confronted by agitated farmers who did not want to part with their land. That was scary for the Tata folk. Maharashtra automatically became the choice, but the Tatas got mixed signals from several quarters.
And there was also the vexatious due-process that the state administration wanted to follow, which would have derailed the Nano deadline. Gujarat, thus, became the only way out.
Two weeks back, the Tata Motors team re-visited the state. This time they decided to rule out both Bhuj and Kutch, primarily because they had lost a great deal of time and didn’t want to revisit the place.
Also, there was no time to build a township for workers and their families in these sparsely populated regions. Children of the workforce needed good schools so a location near a city became critical. As soon as the Tata team presented its wish list, the Gujarat administration went into the war room, as it were.
The answer to its quest was found in Sanand, 25 km from Ahmedabad. Fortunately, over 2,000 acres of land lying there belonged to the state’s Agricultural University, and hence to the government.
It was land that was meant for grazing, but was good enough to support industrial activity.
Tata’s Nano from Gujarat
Could the government carve out 1,000 acres out of this for Tata Motors?
Yes, it could.
The Gujarat team began listing out other advantages. The location was close to the Charodi railway station, it was just 200 km from Rajkot, where the best engineering workforce can be found.
Ports were just 300-400 km away from both Pipavav and Mundra (Mundra had the edge given its container depots for vehicles - Maruti uses them - and a huge ro-ro (or roll on, roll off) terminal for loading and unloading vehicles).
Then there was a 6-lane highway just 1 km away from the land earmarked for Tata Motors. If the Tatas gave the go-ahead, the State could acquire this kilometer of land, too. Last week, Tatas gave their go-ahead. In less than 24 hours, the 1,000 acres owned by the state were transferred to the Tatas at market rate.
After Nano, hi-tech taxis to say ‘Hello’
After the Nano, it is now the turn of the Hello Taxi to say hello to the city. The service will soon be launched to suit the mega city status of Ahmedabad. Gone are the days when calling a taxi meant an agonising wait. The promoters of the taxi service promise that the response time will be at par with the emergency services.
Himanshu Patel, Chief Executive Officer of Ekta Corporate Services Pvt Ltd, which is launching the service, said, “These metred taxis will be equipped with facilities of global standards. Initially, the Indica Zeta will be pressed into service, as it is more comfortable.”
He added that the services will be available 24×7. The service is accessible on a single number with 30 lines.
Land prices soar near Gujarat Nano site
Real estate prices in and around Chharodi in Ahmedabad district have almost doubled overnight after Tata Motors decided to relocate its prestigious Nano project from Singur in West Bengal to Gujarat even as experts feel that the gain was only ‘notional’ as no deals have been struck so far.
“In Chharodi, where the Tatas’ mother plant will come up, farmers are demanding Rs 8-10 lakh per bigah, almost double from Rs 3-4 lakh per bigah before news of the Nano relocation,” said Maharaja Jayshivsinh, the erstwhile prince of Sanand and one of the largest landowners in the area.
”However, these prices are unrealistic and investors are ready to offer only Rs 5-6 lakh per bigah. In nearby Sanand area, the prices today are Rs 3,000 per sq yard, up from Rs 2,500 per sq yard earlier. The realistic price rise would be about 40 per cent,” he said.
In interior areas like Sachana and Virochandnagar, the price of agri land has crossed Rs 10 lakh per bigha from about Rs 3-5 lakh per bigha, said an investor who wished to remain anonymous.
Many realtors are optimistic that the Tatas entry into Ahmedabad is likely to put a break on the current recession in the realty market here.
Giving the example of Gurgaon near New Delhi, Shrenik Shah, CEO of real estate consultancy Space Management, said prices in the suburban area of the national capital had shot up as it housed mainly IT units, which offers hefty pay packages to employees.
“Tata’s entry may also attract those investors again, who earlier stayed away from making new investments in the wake bearish sentiment in the realty market. This will rejuvanate stagnant real estate market in Ahmedabad,” said Jaxay Shah, former president of Gujarat Institute of Housing and Estate Developers (GIHED), an Ahmedabad-based body of developers.
Still, prices in these areas have already surged by 50 per cent in two years and 100 per cent in four years, leaving little room for further appreciation.
“Considering the rise over the past four years, land prices are unlikely to witness a substantial rise,” Sanjay Dutt, managing director of Cushman & Wakefield, told Business Standard. However, for investors it is a good place to put in their money for a long term view of 4-5 years, he added.
“The bullish sentiments are misplaced as the market is in correction mode and will remain so. The impact of Nano will be marginal,” said Shah.
However, in about five to ten years of time this project could open lot of opportunities for other industries and in that case the investors would stand to gain, he added.
Nano to open doors for realty corridor
At a time when the property markets in the country are witnessing downswing, Tatas’ decision to park Nano at Sanand will not just boost land prices in and around Ahmedabad by almost 25%, it will also create a brand new “realty” corridor between Sanand and Ahmedabad, global, experts say.
Global real estate consultant Jones Lang LaSalle Meghraj (JLLM) feels that Nano plant will not only propel realty growth, but it will also create new avenues for retail and hospitality sector. “If such a plant is located close to a major city, the potentially short commute will cause a new realty corridor to develop and prosper”, says Ashutosh Limaye, associate director, strategic consulting, (JLLM).
“Most Indian markets are currently in a low phase. The arrival of an industrial plant of such size and scope will definitely help the location in question to reflect positive trends faster than other areas. There will be an influx of manpower from other states, and the market in question will become more cosmopolitan and more interesting in real estate terms on a national scale,” he said while talking about Tata’s decision to relocate its Rs 2,000-crore Nano plant to Sanand from Singur (West Bengal).
“Real estate and its value is a function of employment. When any big industrial plant comes into a locality, it catalyses direct employment in the actual plant and indirect employment in the associated feeder units (ancillary industries will also be located near the plant.) Moreover, there will be indirect employment for various other support service providers. For all of them, residential spaces across all typologies (affordable and mid-income to luxurious) are essential. Once a residential district is planned, retail, schools, hospitals, recreational centres etc. are natural add-ons”, Limaye told ET.
“Apart from direct demand generation from actual end-users, such developments in any particular location also attract the interest of investors, who will seek to buy properties for renting out. Hospitality and retail will also be boosted”, he says.
An official of GIHED (Gujarat Institute of Housing and Estate Developers), a city-based body of developers, feels that that the Tata Nano project will provide the necessary boost to the property markets in and around Ahmedabad. “The ripple effect of the Tata Nano project will be seen in the Ahmedabad property market in the next three years. The project will attract new manpower and definitely power the growth of the housing segment in Ahmedabad”, Suresh Patel, vice-president of GIHED said.
“The land prices between Ahmedabad and Sanand are also expected to rise by about 25% in the coming days”, he said adding the prices which were about Rs 1,000 for an square yard is bound to leap-frog in the coming days. “Once Dholera port in Ahmedabad district develops, the entire region will grow by leaps and bounds”, Patel remarked.
The biggest beneficiaries are developers like Savvy Infrastructures Ltd who are already in the process of building large residential projects in nearby places like Dev Dholera and Nal Sarovar.
Similar views were aired by Cushman & Wakefield, another global real-estate solutions provider. “The economic activity (in form of the Tata Nano project) will enhance capital value of land in and around this corridor of Sanand. Positive sentiments in times we live in today, which are not so encouraging, would witness definite lift the spirits for investors. Hospitality, retail, logistics, transporters are likely to benefit in the medium to long term”, said Sanjay Dutt Joint Managing Director, India, C&W.
“Nothing will happen in the short term but for some lift in land valuations n around proposed Tata site.
However medium to long term impact would lead to generation of demand in Ahmedabad, which is highly under leveraged vis-a-vis other top cities in India. It is about time the world sees it and the Tata deal would certainly help”, Dutt remarked
Navratri 2008
Yahoo!!!!!, Nano all set to drive into Gujarat
There could be a huge gift in store for Narendra Modi as he completes seven years in office as Gujarat chief minister on Tuesday.
Sources said the decks have been cleared for transfer of 1,000 acres of land to the Tatas. Modi’s council of ministers will meet at 10 am before the Tata team arrives. The land which the Tatas have to finally select is located within a 2200-acre campus owned by the Anand Agriculture University which serves as a cattle and seed farm.
The university has already transfered 1,000 acres back to the government which went into an overdrive to woo Tata Motors ever since the situation started worsening at Singur in West Bengal. Government officials were hopeful that the deal will be clinched on Tuesday , after a final round of negotiations on the concessions Tata Motors will be seeking.
Somebody’s Loss is Somebody’s gain as they populalry say.
3 states slug it out in race for Nano
The Gujarat government may be claiming that the Nano unit is headed for a site near Ahmedabad but there are indications that the race to host the plant is far from over.
Senior Tata Motors officials said on Saturday that its MD, G Ravikanth, will be in Karnataka and Andhra Pradesh on Sunday to meet ministers. He will weigh up options for rolling out the Rs 1-lakh car from a site in either of two states.
Ravikanth will be in Dharwad on Sunday to inspect a site for the Nano plant, officials in Karnataka confirmed on Saturday.
This will be followed by a meeting between Karnataka major- and medium-scale industries minister Murugesh R Nirani and Tata Group CEO Ratan Tata during the week. “I am meeting Ratan Tata soon. We are confident the Tatas will select Dharwad for relocating their Nano manufacturing unit,” Nirani said. Ravikanth will also be visiting Andhra Pradesh.
Gujarat officials, however, claimed on Saturday that a site near Sanand in Ahmedabad was the frontrunner in the race. In what could be a personal triumph for Gujarat chief minister Narendra Modi — and add insult to injury for communist Bengal — senior Gujarat officials said Ratan Tata had agreed to relocate the Nano plant. The site is located 25 kms west of Ahmedabad.
A formal announcement is likely next week, most probably on October 7, when Modi completes seven years in office. At present, the 2,200-acre site serves as a college and cattle-and-seed farm for the Gujarat Agriculture University.
Things are already moving fast within the Gujarat government. The university has been informed about the decision to transfer the land to the Tatas. The necessary paperwork for the transfer has been completed. The revenue department on Saturday issued a notification to acquire 60 acres of land in Chharodi and Iyawa-Vasna villages for building broad approach roads to the site.
While pulling out of Singur on Friday, Ratan Tata had mentioned that locations in “three or four states” were being considered. While Maharashtra, Uttarakhand, Karnataka and Andhra Pradesh were in contention, what finally swung the decision in Gujarat’s favour were Modi’s incentives to the Tatas.
Ahmedabad going for a ‘take the bus’ drive
Commuters in Ahmedabad are in for a change in their daily travel routes and modes of transport as the Ahmedabad Municipal Corporation (AMC) tries to woo them to leave their two-wheelers at home and use the public transport system instead.
If the plans of the AMC are anything to go by, the city might just see a transformation in how it perceives and uses its public transport. With a previously announced metro rail project not seeing the light of day yet, the AMC has decided to revamp its entire bus network with the help of private participation.
In conjunction with the Gujarat State Road Transport Corporation (GSRTC), Ahmedabad Urban Development Authority (AUDA) and Bus Rapid Transit System (BRTS), AMC has planned new terminals, new bus routes and state-of-the-art bus stops, to be completed within a time-frame of three years from now.
While GSRTC is building bus terminals to serve inter-city travellers to North Gujarat, BRTS is going to launch 300 buses on a 90-km route within the city.
New buses, terminals
“AMC has formed a Special Purpose Vehicle, Ahmedabad Janmarg Ltd, with a corpus fund of Rs 5 crore to kick-start the project. The total investment for introducing new buses, building bus stops and terminals is about Rs 1,000 crore. We will keep the bus fare on a par with that of existing Ahmedabad Municipal Transport Service bus rates and look for other sources of income, such as advertising and parking fees,” says Mr Abhijit Lokre, Architect, Urban Planner, CEPT Research and Development Unit. CEPT, along with LEA Associates, New Delhi, and ITDP, New York, has been hired by AMC to design, supervise and maintain the BRTS project.
There will be 30 bus stops (35 by 3.5 metres each) built in the middle of the road like an island, accessible by BRTS buses from both sides. The buses will have a door on the right side and the floor height of the bus will be level with that of the bus stop. Sensor-fitted doors will automatically open and shut, timed to match the doors of the bus when docked in a particular manner.
Initially there will be a conductor, but gradually ticketing will be off-the-road at the stops with a smart card. There will be turnstiles at both ends of the stop and entry will be through a ramp.
Since this kind of a stop requires wide roads, the route has been chosen accordingly, on road widths between 24 and 60 meters. The route has been fixed after a survey of all the shared autos and AMTS buses, which will be used as feeder services to BRTS, he says. On all the routes, AMC proposes to raise the floor space index (FSI) from 1.8 to 2.5.
“Since we are not present on the heavy demand routes (some of which are narrow), we will have AMTS and small buses under Janmarg to facilitate passengers from their places of destination to BRTS bus stops. Also, the existing routes of AMTS buses have been rationalised, they will not ply on these routes but will be retained for longer routes,” he says.
There will be terminals and interchange stations where people will be able to switch from one bus service to the other on the same ticket or a smart card. Around four workshops are also being built, for the maintenance and parking of BRTS buses, at Chandola Lake, Ranip and CTM. The one at Chandola Lake (60 buses) is under construction on an 18,000 sq.m plot with Chartered Logistics, a private company.
Icing on the cake
Near the main railway station at Kalupur, a four-and-a-half-km elevated corridor will be built exclusively for BRTS buses, nine meters above ground level. The stops will be on top and will be directly connected to the station. The design is being readied now and the tenders will be floated by the end of this year, he says.
Foot over-bridges or skywalks and split flyovers are also a part of the entire infrastructure revamp. In a few places, instead of zebra crossings, the road itself will be elevated with the underpass for pedestrians at the same level as the road. Light emitting diodes (LED) displays, inside buses and at the bus stops, GPS systems, manned centrally, and corporate-sponsored green drives are the icing on the cake in the BRTS plan for the next two years.
BRTS has been adopted by Pune, Guwahati, Jaipur, Delhi, Visakhapatnam, Thiruvananthapuram, Rajkot, Surat and Indore uptil now and it is the right time for Ahmedabad to invest in it, says Mr Lokre.
“In 2005, the Central Government had come up with the Jawaharlal Nehru National Urban Renewal Mission, where the Central, State and local governments come together to fund and create better infrastructure for cities. Ahmedabad had planned BRTS much before that, but with the additional funds being announced, we scaled up the plans,” he says.
It is calculated that after the completion of the project, AMTS will carry 7 to 8 lakh passengers per day while BRTS will carry 3 to 4 lakh per day. The total number of registered vehicles in the city in 2006 was recorded at 14 lakh, with an estimate of one lakh being added every year.
Inter-city traffic
The inter-city traffic from Ahmedabad to North Gujarat towns such as Mehsana, Palanpur and Mount Abu Ambaji is heavy. To prevent extra congestion on the already dense roads, GSRTC has proposed terminals in different parts of the city.
This will allow passengers to use buses from their part of the city, without having to travel the length and breadth of the city to reach the terminal. At a total investment of Rs 160 crore (Rs 42 crore for the terminal and Rs 125 crore commercial investment) GSRTC will develop a terminal near Gita Mandir (the main bus terminal in the city) with BRTS.
The terminal at Subhash Bridge (near police headquarters) will be built at a cost of Rs 22 crore for the terminal and Rs 80 crore for commercial purposes. A third terminal will come up at Krishnanagar, in the Eastern part of the city, with Indian Oil Corporation. The three terminals are expected to be ready within 18 months and there will be a time limit of five years to lease it out to commercial enterprises.
Mr Hitesh Parmar, Chief Engineer-Civil, GSRTC, says “We expect that hotels will mushroom in these areas along with an increase in the textile and pharmaceutical-related businesses here.” Since AUDA is also developing terminals, and with BRTS buses, the mode of transport is set to improve for Ahmedabadis.
Parmar says that upon completion of the project, 740 buses will ply daily from Subhash Bridge and 1,800 buses from Gita Mandir. GSRTC reported a turnover of Rs 1,640 crore last year and a working profit of Rs 10 crore.
“We had a loss of Rs 60 crore due to introduction of new buses and administration costs, but this year we are planning to bring down the staff per bus ratio to 7:1 from 7:8,” he says. GSRTC currently runs 8,436 buses, which will be rationalised to 8,500 this year by replacing around 1,000 old ones.
With such rapid changes being planned for the city’s road infrastructure, as more public transport gets added, no- parking zones, one- way routes and restricted freedom to private vehicles will be implemented. This will go a long way in disciplining the traffic, says Mr Lokre.