Let’s start with the basics: Global City, a mixed land-use development, is planned by HSIIDC (Haryana State Industrial and Infrastructure Development Corporation). This sub-city will cover 1000 acres in Sector-36 and Sector 37, featuring corporate office spaces, commercial areas, and residences as part of transit-oriented development (ToD). It aims to encompass everything a modern sub-city should offer.
For more details about Global City, visit their official website.
Now, let’s discuss recent developments. Since July 2023, HSIIDC has been organizing e-auctions to sell land parcels to builders. However, the response from the builder lobby has been unexpectedly cold.
Initially planning for 90% commercial/office towers, HSIIDC has adjusted to a 65% allocation due to decreased demand. The remaining 35% is now reserved for residential spaces. Despite these modifications, the challenges persist.
So, what’s the issue? While there’s a housing demand boom, the tepid response from builders raises questions. Let’s delve into it.
The PPP Model of Development:
HSIIDC plans to develop this sub-city on a public–private partnership (PPP) model. The government is not investing directly, raising concerns about trust in the government, especially with upcoming elections.Its like an entrepreneur asking for funds from investors without putting in his own efforts and savings. How can one trust the Govt. After all, the big risk is that the State Govt can change as the next elections are nearing.
Government’s Hurry:
HSIIDC appears rushed to close the deal before the elections and the model code of conduct kicks in. This urgency contrasts with the lack of satisfactory infrastructure development in nearby areas like New Gurgaon, Dwarka Expressway and SPR including the land parcel of Global City.
Auction Without Developing Basic Infrastructure:
HSIIDC started inviting applications for e-auction without developing a single road on the land parcel Global City. An individual investor can be misguided for investing into such a product but no one can do the same with a team full of consultants and experts. on PPP, raised another concern.
The Potential Delay in Development:
Only HSIIDC has a vision of the whole subcity, what kind of infra development will be required for a particular zone, it is known to HSIIDC only. And developing this on PPP model will again introduce delays and miss management. We have seen the failure of the PPP model in multiple cities where the builder has a tunnel view of the things which he could develop without having exposure and vision of the whole master plan and if the builder is totally dependent on HSIIDC for approvals and audits. Then it will cause a lot of delays in execution.
No Dedicated Govt Entity for Global City:
HSIIDC as a Govt body is responsible for handling the whole Haryana state. Although Haryana is comparatively a small state, it is driven from Tri City and they are responsible for development in other cities of Haryana as well. This shows the casual approach of GoH and HSIIDC. There should be a dedicated Govt body which is solely responsible for development and execution of the master plan Global City.
Human Resource Crunch at GoH:
HR crunch was already there and hardly any new hirings had taken place in TCP & related govt bodies. Making a dedicated entity for Global City will need human resources. How will the government manage this? But yeah, I understand they could easily sell these land parcels to builders and pass the buggy parcel to them. But the builders are smart, they can sense the delay.
Who will go early in the delayed party ???
Non Utilisation of Existing Land Parcels:
The local builders have lots of land in surrounding areas. It’s surely a Kamdenu cow. The building industry is capital intensive business. Builders have a lot of liabilities. This bull run market has given an opportunity to wipe off their long term debts from the earnings of new sales. Later they can utilize the remaining funds to develop a new project on existing land parcels which will give them better returns. Nothing is wrong with that. It’s a business strategy. Why should a builder take a loan for buying that land and another loan for building over it? That too in the scenarios where the Govt is not offering any subsidy or monetary benefits.
Empty Handed from Middle East?:
As per media articles, our CM has invited investors from the Middle East on his recent visit, just for developing a city of 1000 acres which will look like so called “Singapore”. I don’t like Indian cities to be aliased as foreign cities/countries. The Indian economy is growing fast, really fast. We are about to become a 4 Trillion economy. All the IPOs are getting oversubscribed, be it good or average. That means individual investors are offering good exits to institutional investors. We have enough funds that are too organized to secure the development of a tiny project consisting of 1K acres. This could easily be developed by Indian promoters and investors if the plan is full proof. Are you able to convince your own family member before trying to convince a neighbour?
I am not here just to criticise or praise anyone. Let’s talk about how GoH and HSIIDC can improve so that they can attract more builders and we can witness the developed Global City without a delay, maybe before 2030 fingers crossed.
Along with the above improvement points, following must be ensured for effective development of Global City:
- Declare a tax haven for builders and specially for the corporations who are willing to build and move here.
- No property tax, subsidized electricity and water supplies to corporations for at least 5 years as SEZ. This will allow them to shrink their office in Udhyog Vihar, DLF Cyber City, etc and open a new comparatively affordable and larger office in Global City.
- Hire external consultants who have hands-on experience in development of greenfield cities like Dholera, GIFT and even MET.
- Allow the seamless transaction in USD for the corporates.
- Learn from Dholera and GIFT, like develop a building in Global City which will facilitate the easy with the documentation process
- Avoid using the PPP model; invest in essential infrastructure using your own funds before selling. This process may extend for approximately 18 months. Allow the election to occur and refrain from rushing.
- Sanction and allocate funds for the metro connectivity from Yellow line or blue line along with Dwarka Expressway.
After all these improvements, even if HSIIDC follows some of it, will surely attract the builders and even most importantly this project will be a success without being delayed like Dwarka Expressway.
Please put your thoughts in the comment sections below. I will be making a YouTube Video on this soon.
Thank you for your attention.