As wealth rises in India, so do private towns

In a valley surrounded by seven small hills in western India, a new town is taking shape.

Its downtown of hotels, a town hall, and Mediterranean-inspired apartments sits beside a manmade lake. Row houses are being built. Uninterrupted power and water are promised – as are top-notch schools, a space education park designed with NASA know-how, and a Nick Faldo Golf Academy.

Lavasa could be the antithesis of today’s Indian cities – a green and orderly space free of the chaos and pollution of, say, Mumbai (Bombay), the sprawling megalopolis only three hours away. Slated to open later this year, it is the most ambitious of a slew of new townships being developed by the private sector, aimed at India’s burgeoning urban elite.

Such private towns advertise not just walkable streets and swish office buildings but also proximity to IT parks and special economic zones, whose professionals they aim to attract.

They also exemplify India’s uneven economic growth. Some townships have taken over farmland. Most keep hawkers and shanties at bay with gates and security guards, yet rely on a local supply of cheap labor – often the farmers who once owned the land.
 
The new townships “are an indicator that the rich in India are increasing rapidly,” says urban development expert Prakash Apte based in Mumbai. But “they’re also a sign of the growing inequality.”

Easing crowded cities

The surge in private townships – at least 36 are pending approval in the state of Maharashtra, where Mumbai is located – has come as rapidly growing populations put pressure on cities.

India's urban population is set to increase from the current 340 million to 590 million in 2030, a 40 percent increase in the total population, according to a recent McKinsey report. It’s a pace of urbanization second only to China.

To cope, India needs to add 700 to 900 million square meters of commercial and residential space – the equivalent of a new Chicago – every year, the report says. It also needs to invest $1.2 trillion in water, sewers, and power – more than eight times India's current per capita spending.

“The government alone cannot create such planned cities,” wrote Ajit Gulabchand, head of Hindustan Construction Co., which is developing Lavasa, in an recent op-ed. “A different model is required ... which is executed substantially by the private sector creating partnerships at different levels from planning, designing, policing as well as carrying out the municipal functions.”

Villagers complain

With the new developments has come controversy. Lavasa faces allegations of fraudulent acquisition of land (the 25,000-acre project will cover 20 villages), inadequate compensation for some villagers, and concerns over environmental impact.

Some villagers on the vast construction site say they won’t leave. Leelabai Margale, a widow with four children, sells tea and biscuits to construction workers in a shack on the side of a road that she says cuts through her land. Her land title deeds at the local record office were switched into the name of an “agent” company, she says.

In a tiny settlement of adivasis (tribals) nearby, Tumnabai Waghlekar says her family was offered just 700,000 rupees ($15,000) for 45 acres of land. She and her husband, whose family has lived in the area for seven generations, don't want to relocate, though her brother, who works for Lavasa, is trying to persuade them otherwise. “They want to move all the adivasis to one place, like a tourist village,” she says.

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