‘We don’t want to build ghost towns in India’
Billed as the most ambitious project in post-Independence India, the $100-billion Delhi-Mumbai Industrial Corridor (DMIC) has been plagued by project abandonments, land acquisition issues, and delays. With things starting to pick up pace over the past couple of years, DMIC Chief Executive Officer ALKESH SHARMA talks to Sai Manish about the rationale behind abandoning some projects and innovative approaches the DMIC is adopting. Edited excerpts: Why are the big gas-based power plants envisaged in the DMIC abandoned? Planning on the DMIC started in September 2011, when a decision was taken to set up the DMIC Investment Trust. The planning of power plants started when the country was facing power deficits. We thought there would be a huge demand. That is how four power companies were set up. We got land for three projects. Land for the fourth one did not come. All environmental clearances were obtained. GAIL was negotiating with an Australian company for gas, but the price was working out to be $14/Btu. At this price point, the cost of power came to ~8.5 per unit, which was too expensive. At that time, there were negotiations with the Ministry of Petroleum, which told us the projects would get domestic gas. But by the time we reached an advanced stage of negotiations, the government took the decision that domestic gas would be used for fertilisers. The government politely asked us to look for gas from the TurkmenistanAfghanistan-Pakistan-India (TAPI) gas pipeline project. But the TAPI negotiations started sometime in 2013. What about the states that were supposed to benefit from these power plants? States, which we thought were powerdeficient and would require power from these plants, have boosted their power capacity. For instance, Madhya Pradesh had only 3,000 megawatt (Mw) of installed power when we planned these power plants. In 2016, MP had 15,000 Mw. A similar scenario unfolded in Gujarat and Maharashtra, where there is hardly any power deficit now. In Haryana, too, there has been an improvement in the efficiency of power plants. In fact, we had to abandon certain small power plants that were to be built by Toshiba because the price at which they had envisaged selling power was around ~8 per unit. There were no takers for power at this price because the power situation had improved drastically in Haryana. When I joined the DMIC board in 2016, I looked at these projects and found the land acquired for the power plants belonged to industrial estates, which wanted the land back in case it wasn’t to be used for power plants. We thought that power generation was not our core competency and we should return the land since the projects were unviable. Even if we had set up these plants, we would have given their operation to a power distribution company. How is the development of smart cities in the DMIC coming up? Look at some of the planned cities in India, Chandigarh and Gandhinagar, for example. Gandhinagar was declared Gujarat’s capital in 1969. Even today if you go to the city, you will see that not many ancillary facilities have developed. Developing a city is always an organic process. Internationally, take the example of Chengdu in China, which is spread over 54 square km (sq km) and was started in 1992 as a smart city, and Milton Keynes in the UK, started in the 1960s. Milton Keynes was run by a special purpose vehicle (SPV) till the 1990s, when it was transferred to the municipality. I visited Chengdu in 2016 and they had completed only 23 sq km. Now compare these to smart cities envisaged in the DMIC. After the master plans were drawn up in 2011, the groundbreaking ceremony for four smart cities under the project was done in 2016. We have activated 22 sq km in these cities and planning has been done for more than 150 sq km. One of the criticisms of the Chinese model of smart cities is they have spent a lot of money on building them but there are hardly any occupants.
These have become ghost towns and utilities built there have started rusting. We wanted to avoid these kinds of mistakes. Building a city takes a lot of careful planning. Investors will not come until they see something coming up on the ground. So, we have started work on the 22 sq km, where we have got land from respective state governments. For the remaining area, which has been planned, we are ready to give contracts.