Mumbai needs infrastructure
Times of India
Partner and Sector Leader, Real Estate and Infrastructure, EY Pvt. Ltd.
Senior Associate, EY Pvt. Ltd.
What you see is what you believe and we believe that Mumbai needs urban infrastructure. It needs an upgraded urban infrastructure which can cater to demands of unimaginable proportions which no other city in the world has seen, because its challenges are unique and have not been witnessed in any other city in the world. Here are some facts:
Greater Mumbai with a population of 16.4 million houses twice as many people as those in New York City.
Mumbai Metropolitan Region (MMR) with over 25 million people is the second largest urban conglomeration in the world after Tokyo.
MMR with 1,700 times lesser area can be home to the entire population of Australia.
Suburban Mumbai has a density of 20,925 persons per sq. km which is twice as many people as that in New York (10,630 persons per sq km).
In Mumbai ward C, density goes well over 100,000 persons per sq. km.
Complement this with the fact that the Island city of Mumbai saw a decline in population losing 140,000 residents, while the suburban areas gained 13.2 million, mostly driven by lower real estate prices in the suburbs. Areas such as Cuffe Parade, Malabar Hill, Cumbala Hill and Warden Road in the island city have average residential prices ranging between INR 40,000-50,000 per sq. ft, which can go as high as INR100,000 per sq ft.
Quality developments within a more affordable budget have given a boost to areas such as Thane to the north of Mumbai. Thane district has seen a 35.26% increase in population between 2001 and 2011 against a national average of 17.6% (average residential real estate price in Thane ranges at INR4,000-6,000 per sq. ft).
While residential development has spread, commercial development still remains centred mostly around Nariman Point, Bandra-Kurla Complex, Lower Parel and Goregaon-Malad belt. The shuttling of population across the city to these commercial nodes has put tremendous pressure on the road and rail infrastructure in the city.
On an average a resident of Mumbai spends four hours a day commuting, either crawling at five kms/hour on the crater-ridden roads or packed like sardines in the local trains. It is no wonder that the Mumbaikar's wish list is topped by a demand for improved transportation facilities in the city.
While some prominent infrastructure initiatives have been taken, including the World Bank supported Mumbai Urban Transport Project, which has spent US$2 billion in the city's transportation infrastructure since 2001, the Mass Rapid Transit systems like Metro Rail Project (along the Versova, Andheri, Ghatkopar and Mankhurd stretch) and Mono rail (Chembur, Jacob Circle and Wadala stretch), it does not take much to realise that there is a direct co-relation between these and real estate development and prices surrounding the same.
Similarly, the development of Central Mumbai has seen an acknowledgement of the eastern suburbs, with now a focus on improving the east-west connectivity. Jogeshwari-Vikhroli link road one of the most successful east-west linkages as well as the Santacruz-Chembur link road have seen a huge boost in real estate development over the past five years. Locations such as Bhayandar, Virar, Dombivli, Ulhasnagar, Panvel and many areas of Navi Mumbai which are part of this rail network had caught the imagination of buyers in residential and commercial segments.
While funding has been a continuous area of concern, there have been some innovations such as using FSI as revenue earners to fund infrastructure (sale of increased FSI from 1 to 1.33 in the suburbs at a premium intended to fund infrastructure) and introduction of cluster development policy to optimise infrastructure etc.
What is now needed is an accelerated implementation of these policies within a clear timeline to provide the lifeline that the city needs. Infrastructure and real estate are the two engines of a city that provide the basis for economic growth. Mumbai today is competing with Singapore, Hong Kong and Shanghai to emerge as an international financial capital. It is only when we acknowledge this competition, will we rise to the challenge of augmenting our infrastructure and creating a world-class city.