PM Narendra Modi's smart city GIFT progresses well

The Gujarat International Finance Tec-City (GIFT), 12 kilometres from Ahmedabad, is fast becoming a go-to place for industrialists, consultants and foreign universities trying to understand an Indian smart city. That too, a city whose economy will be largely based around one industry.

The greenfield city that could one day rival Mumbai and Singapore as financial hubs is Prime Minister Narendra Modi's pet project and one he envisioned around 2007 while he was the Chief Minister of Gujarat. The city has only two 122-metre high buildings and looks desolate - but don't be taken in by how it looks now; work has progressed well.

GIFT has completed the infrastructure work for the first phase of its 886-acre plan. It has all the power cables, the fibre optic network and pipelines tucked in a three-km long tunnel below the ground. Vacuum pipes suck waste from offices to an automated waste collection plant. A district cooling system is coming up - chilled water generated by the system will be distributed to all buildings for cooling the indoor air, cutting down energy bills spent on air conditioning. A command and control centre will monitor the city's utilities and security.

The planning for the city started in 2007 but it ran into the global financial meltdown of 2009. An SPV (special purpose vehicle) was formed nevertheless - a public-private partnership between the government of Gujarat and infrastructure development company IL&FS. The government transferred land to GIFT in 2011 and things have moved at a faster clip thereon.

Ramakant Jha, Group CEO of GIFT, is a soft-spoken man but proved an aggressive salesman. Besides completing the infrastructure work for the first phase, he has raised money from banks and has begun monetisation. On paper, financing a greenfield city appears easy. They can monetise the land by selling developmental rights to developers and companies. "Our target in phase one was to sell 10 million square feet in developmental rights. We have already sold 12.6 million until December 2014," says Jha.

Development rights have been sold to SBI, the Bombay Stock Exchange, LIC, and National Payment Corporation, among others. Jha has also sold rights to a school, a hospital, and a club. One of the two towers already built is 70 per cent occupied, mostly taken up by nationalised banks.

Jha has now raised prices. Initially, he sold developmental rights for Rs 1,000 a square foot for commercial space and Rs 750 for residential. Currently, commercial rights are for Rs 1,250 and residential for Rs 950.

"It will go on increasing. We will be profitable in 10 years' time," he says, confidently. The overall infrastructure cost, which includes, roads, water supply, sewerage, electricity supply, and district cooling, is expected to total Rs 15,000 crore until 2024. "Our initial project cost for three years was Rs 1,800 crore. We raised Rs 1,150 crore from the banks last year," he says.

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