TOURISM-CENTRIC SPECIAL ECONOMIC ZONES

Sunvistas

SEZs-Some Conceptual Issues

The advent of SEZs in India in FY 2000 has brought to the fore conceptual issues vis-à-vis Export Processing Zones (EPZs). SEZs must not be construed as mere EPZs, where the focus is on promoting exports of specific products (eg, SEEPZ, Mumbai.

If one were to go by the established Chinese model, the SEZ concept is different which devolves on:

“an inclusive and intensive all round development of a region to world class standards, primed by FDI and trade-led growth policies”.

To steer clear of conceptual issues, educating the policy makers on the importance of SEZs to the Indian economy, particularly at the present juncture of development, is imperative.

Current Operational Status of SEZs

At present eight Special Economical Zones are functional where enterprises can be set up. They are: Kandla SEZ, SEEPZ, Santa Cruz, Mumbai, Noida, Chennai, Cochin, Falta, Visakhapatnam and Surat.

Exports from Special Economic Zones: According to latest information available from the Ministry of Commerce, Government of India, there are 659 units operating in eight SEZs currently operating in the different States of India: It appears from the table below that exports from SEZs evinced a marginal 7.5% increase from Rs 8,552 crores in 2000-01 to Rs 9,189 crores in 2001-02, traceable in main due to slowdown in the world economy in the wake of September 11 terrorist attacks in USA.


DEVELOPMENT OF SPECIAL ECONOMIC ZONES

SOME IMPERATIVES

QUALITY OF GROWTH OUTCOMES

WORLD CLASS INFRASTRUCTURE

 MEGA PROJECTS
 PROJECT IDEAS
 COMPREHENSIVE INFRASTRUCTURE PLAN

Recent Policy Announcements

Offshore Banking Units: The recent policy announcements by the Government allow Offshore Banking Units (OBUs) in SEZs. Detailed guidelines for setting up an OBU are being worked out by the RBI. This should help some of the cities emerge as financial nerve centers of Asia. OBUs have been permitted to accept funds from NRIs. A key plank of new SEZ policy package is that OBUs are critical for Greenfield SEZs.

OBUs located in one SEZs can lend to units in other SEZs Units in SEZ would be permitted to undertake hedging of commodity price risks, provided such transactions are undertaken by the units on stand-alone basis. This will impart security to the returns of the unit. OBUs in SEZs are also permitted go for External Commercial Borrowings (ECBs) for a tenure of less than three years. The detailed guidelines are currently being worked out by RBI, which will provide opportunities for accessing working capital loan for these units at internationally competitive rates. Banks that have been granted permission to set up OBUs include the State Bank of India, ICICI Bank, Bank of Baroda and Oriental Bank of Commerce. The Govt of India have so far cleared ten OBU applications, out of which five are from SBI, two each from ICICI Bank and Bank of Baroda, while one from the Oriental Bank of Commerce. While the first OBU is expected to be operational by June 2003, so far no application is reported to have been received from any foreign bank.

THE CHINESE SEZs

The Chinese SEZs were the result of an effort to decentralize economic reforms as early as late 70’s. Reforms through SEZ interventions began in 1975-78 in China under the stewardship of Deng Xiao Ping. The Chinese SEZ Concept is more about development than trade and deals with specific functions and roles, evolved and perfected over the past two and half decades of Chinese economic reforms:

(a)-to attract foreign capital, advanced technology and equipment;
(b)-to train people in advanced technology to improve productivity;
(c)-to promote competition between regions, between and within trades, with a view to help strengthen the competitive muscle of the overall Chinese economy;
(d)-to funnel foreign exchange by “marketing” the Chinese resource advantage to serve as the gateway for speedy, hasssle-free influx of FDI and foreign exchange into China;
(e)-to gear up SEZs to serve as “experimental models of the market system”; and
(f)-to increase employment, especially of youth from the rural hinterland China, by a deliberate strategic engineering of trickle down growth effects.from SEZs.

Special Economic Zones can be instrumental as catalysts for transition from a planned to market economy. This theory, in fact, employs an interpretation of SEZ that is broader than the common use of the term. It applies potentially to any geographic area that receives one of two particular types of special policy treatments in the areas of taxation and investment. In the case of China, Shenzen, Gaungdong and Fujian can be included in this category. The distinguishing features of Chinese SEZs are their large size, investment friendly customs regime, flexible labor laws, liberal policy for DTA (Domestic Tariff Area) access, attractive package of incentives and delegation of powers in favor of provinces and local authorities for managing the zones.

Although China has adopted many of the policies advocated by Economists, such as being open to trade, a and foreign investment and macroeconomic stability, violations of well established macro policy were also striking. For most part of the two decades (1978-98) China’s reform succeeded without complete market liberalization, without privatization and secure private property rights, and without democracy. One might have thought that in the absence of these “essential” factors reforms would fail.

The Chinese development experience with SEZs indicates that considerable growth is possible with sensible but not perfect institutions, and that some unconventional “transitional institutions” can be more effective than the best practice institutions for a period of time. Specific lessons include: incentives, hard budget constraints, and competition should apply not only to firms but also to governments; reforms can be implemented without creating many or big losers; and successful reforms require appropriate but not necessarily optimal

CHINESE SEZs – A SUCCESS STORY TO EMULATE

If India has any peer group country to compare performance with, it is China, as it has similar size, diversity, demographics etc. Hence it would be worthwhile modeling our SEZ efforts on the Chinese lines. If one looks back at the long-term trends in GDP and Foreign Trade of China and India over the past quarter century, China has made rapid strides and far surpassed India. Secular trend in export performance of China coinciding with SEZ development indicates that global trade of China rose over thirty times from US$ 20.6 billion in 1978 to US $ 620 billion in 2002. Currently a trillion Dollar economy with a substantial FDI inflow rate of US $ 45 billion per anum, the Chinese economy owes its success to SEZs, which have gained worldwide attention.

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THE CHINESE EXPERIENCE WITH SEZs (THEORETICAL PREMISES)

Chinese achieved an amazing transition to virtually a “developed economy” status as the World’s Fastest Emerging Market Economy through SEZ Interventions in just two decades from 1978 to-1997. The man responsible for this great leap was Deng Xiao Ping.
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The Chinese Reforms

In the two decades between 1978 and 1998, China had transformed itself from a centrally planned economy to an emerging market economy, and achieved a nearly 10% average growth. During the period, China’s per capita GDP had more than quadrupled and the living standards of ordinary Chinese people had improved significantly. For instance, per capita consumption had increased four times for eggs, eight times for poultry, the per person living space had more than doubled in the urban areas and tripled in the rural areas, and total household bank deposits as a percentage of GDP, increased from less than 6% in 1978 to 60% in 1998. The benefits of the Chinese reforms. were shared by the people on a broad basis. The number of people living in absolute poverty declined from over 250 million to about 50 million in two decades, a decline from one-third to a twenty-fifth of China’s population. Life expectancy on the other hand had increased from 64.37 in the 1970s to 70.80 in 1996 (68.71 for men and 73.04 for women), with infant mortality falling from over 50 per thousand in the 1970s to less than 30 per thousand in the 1990s. In 1998, the World Bank moved China’s ranking from a low-income to a lower middle-income country.

China’s two decades of market transition had strong institutional foundations. In the first stage (1978-93) (entirely under the leadership of Deng Xiao Ping), the system was reformed to unleash the standard forces of incentives, hard budget constraints and competition, but the underlying institutional forms and mechanisms were far from conventional. Reforming government through regional decentralization; entry and expansion of non-state (mostly local government) (Town and Village Enterprises (TVEs); financial stability through “financial dualism”; and a dual-track approach to market liberalization.

In the second stage, China aimed to build a rule-based market system, incorporating international best practice institutions but proceeded in its own way. Major progress was made in the first five years (1994-98) on the unification of exchange rates, and convertibility of the current account; the overhaul of tax and fiscal systems; reorganization of the Central Bank; downsizing of the government bureaucracy; and privatization and restructuring of state-owned enterprises.

Some Theoretical Insights: The reasons why China’s reforms were not properly understood and appreciated are profound. There are strong prior beliefs, based on existing knowledge of economics, about the kind of formulation (or policy interventions) that a transition economy should use. Furthermore, such beliefs are supported by strong evidence from the failed economic reform in Eastern Europe and the Former Soviet Union (FSU) countries prior to 1990 which did not follow the formulation. The theory and past evidence together formed a powerful “conventional wisdom” hypotheses about a set of necessary and sufficient conditions for a successful transition, that is, stabilization, liberalization, privatization and democratization.

Leaving aside the issue of whether they are sufficient from the standpoint of experts on Eastern Europe and Former Soviet Union, the Chinese path of reform and its associated rapid growth seemed to defy the necessity part of the conventional wisdom. Although China has adopted many of the policies advocated by Economists, such as being open to trade, and foreign investment and macro-economic stability, violations of the standard policy were also striking. For most part of the two decades (1978-98) China’s reform succeeded without complete market liberalization, without privatization and secure private property rights, and without democracy. One might have thought that in the absence of these “essential” factors reforms would fail.

One of the longest-standing debates in the theory of development economics concerns the relative efficacy of balanced as opposed to leading sector investment strategies for achieving growth. The orthodox balanced growth theory, associated with works of Rodan Rosenstein (Big Push theory 1943), Ragnar Nurske (1953), and Scitovisky (1954), proposes that, due to important economic inter-relationships and complementarities, all sectors of the economy should be developed simultaneously. Subsequent economists formalized some of these ideas in a model in which, unless all sectors move up in concert, fixed investment in any one sector will be unprofitable due to lagging sectors. The most noteworthy opponent of the balanced growth school, Hirschman (1958), also emphasizes interdependencies and complementarities between sectors. Although a developing country might not have sufficient resources to make large investments in all sectors simultaneously, investing in one or a few key leading sectors could have the effect of pulling up other independent sectors.

It is in this context, we should examine the efficacy of the Chinese model of Special Economic Zones, and try to draw lessons. The economic transition of the FSU countries during the nineties faced a number of hiccups during the nineties. This cast a new light on the classical balanced growth versus leading sector debate, raising afresh important questions about appropriate economic policies that effect the allocation of limited economic resources. However, the relatively successful experience of China during 1990s was characterized by a regionally unbalanced development that was concentrated first in the East and coastal regions and later extended to the West and inland. This development reflected early policy decisions to establish several “Special Economic Zones” and “Coastal Open Zones”. These regions gained considerable autonomy, enjoyed preferential tax treatment, and received relatively high levels of resources. However, such strategies remain controversial. Important potential drawbacks include a possibly inefficient diversion of resources, increased regional inequality, and the possibility that other lagging regions could obstruct the process of economic development.

Arguments in favor of the Special Economic Zone development strategy of China include (a)-absorption of foreign investment without involving the domestic economy (ie, the dual track argument); (b)-learning (ie, the experimentation argument); and (c)-strategic economic relations with Hong Kong (ie. the Hong Kong factor argument). Special Economic Zones can be interpreted as possible catalysts for transition from a planned to market economy. This theory, in fact, employs an interpretation of a Special Economic Zone that is broader than the common use of the term. It applies potentially to any geographic area that receives one of two particular types of special policy treatments in the areas of taxation and investment. In the case of China, for example, areas such as the Gaungdong and Fujian provinces can be included in this category.

Pitfalls in Transition: The Chinese SEZ model can lead to certain strategic complementarities between firms, regions, or other economic organizations. If most units in the SEZ restructure (reform) and pay taxes, the government will procure enough revenue to satisfy its political constraint and most probably not increase taxes. On the other hand, of only few units restructure and the others do not, revenue will be so low that the government will succumb to pressure and increase tax rates. This can lead to a bad equilibrium trap that can be counter-productive to the very rationale of the SEZ intervention.

The Rationale of Chinese-style SEZs: This problem entails not only resources for direct state investment, which remains important during the transition period, but also affect the allocation of private domestic and foreign investment. By creating Special Economic Zones that receive a high ccncentration of infrastructure investments that are complementary to local efforts in restructuring, the bad equilibrium trap described above can be potentially avoided. The advantage of investment relative to tax incentives in this context is its irreversible nature involving commitment. At the same time, special tax treatment for Special Economic Zones can be an important supporting policy in these circumstances, even if commitment is imperfect. Therefore, transition strategy might coordinate investment with fiscal policies to strengthen economic incentives when commitment is difficult

According to Stanford Researchers, one of the main lessons learnt was that considerable growth is possible with sensible but not perfect institutions, and that some unconventional “transitional institutions” can be more effective than the best practice institutions for a period of time because of the second best principle. Specific lessons include: incentives, hard budget constraints, and competition should apply not only to firms but also to governments; reforms can be implemented without creating many or big losers; and successful reforms require appropriate but not necessarily optimal sequencing.

THE INDIAN SEZs

India’s SEZs, introduced during FY 2000, represent a more refined version of EPZs. According to FY 2000 Exim Policy, there were seven SEZs with delineated duty-free enclaves treated as a foreign territory for the purpose of industrial, service and trade operations, with exemption from customs duties and a more liberal regime governing trade, FDI and other transactions. Domestic regulations, restrictions and infrastructure inadequacies are sought to be eliminated in the SEZs, with the idea of creating a hassle-free environment for export production.

Development and Marketing of Greenfield SEZs

It is more than three years since the Government announced SEZs as the engines of growth; o far not a single “greenfield SEZ” has come up. According to the Federation of Indian Export Organizations (FIEO), New Delhi, the government seems to be unclear and short-sighted on SEZ policy, as they have accorded SEZ status to almost any EPZ or even Export Promotion Industrial Park (EPIP). For example, an EPIP project in Indore was recently declared as an SEZ. The promoters of Positra (Gujarat) have moved over to Maharashtra and the ambitious Nangunery SEZ project in Tamil Nadu are as yet non-starters.

As per FY 2003 Exim Policy a new SEZ Bill was under finalization by the Ministry of Industry & Commerce, which if approved will constitute a separate chapter in future Exim-Policy statements; but Commerce Minister seem to have softpedalled it for a long time. While State Governments are scrambling to secure SEZs for their States, there are issues like eg. labor laws are not uniform; overall investment climate, then bearish after Iraq war, now the Oct 2008 meltdown will take time to recover etc. The investment climate at least in the short term of next six to eight months till end Dec ‘09 is unclear. Analysts say the Finance Ministry is dragging its feet because SEZs and OBUs are still uncharted waters for them.

Although SEZs afford the best investment option for Income Tax for exemption. According to analysts, large investments into SEZs are unlikely. One basic reason seems to be that the Govt of India have not got the SEZ concept right (as clearly made out in the Economic Times editorial, refer Chapter-III), and not a single SEZ in India can claim that they have world class infrastructure in place for attracting FDI. India has not made any effort to “market the SEZs” as avenues for FDI that creates in turn development impulses with a bias for world class quality. Both the Central and the State Government administrations are lax and groping about SEZ policy, which is being served piece meal without having the “big picture” in view.

Policy makers in Delhi have averred, since there has been considerable erosion in India’s competitiveness in many manufacturing lines in recent years, why not try services based SEZs? Our poor show in FDI of US$ 5 billion compared to the Chinese FDI of US $ 45 billion in 2004, was because of poor infrastructure, and woeful lack of concert in SEZ policy vision and overseas promotional campaigns. It might be a good idea to consider developing tourism-centric greenfield SEZs, as such focused sector-specific thrust can spur the transformation of infrastructure, and create faster multiplier effects.

India is more advantageously placed in tapping the potential of Information and Communications Technologies (ICTs) in speeding up the development and marketing of SEZs, eg. introduction of e-Governance in basic infrastructure, real estate acquisition and construction processes on an all-India basis. Unless a strict, uniform Rule of Law governing these processes is enforced, India will miss the bus, and left far behind. Totally doing away with the current peace meal approach is an imperative. “SEZ Toolkits” based on some of the suggestions outlined below can be developed and electronic media used to promote large SEZs keeping in view the size, scale and scope of tourism-centric activities to communicate with stake holders and targeted audiences:

(a)-Decentralize the State level SEZ Administrations further down into smaller, viable zones

(b)-Identify the SEZs that can be developed in a copy book style on the lines of Chinese SEZs, especially “Shenzhen”, promote and market them with clinical care as “Islands of Excellence”, keeping in view benchmark performance metrics on the lines of Quality of Growth (QOG) metrics, advocated by the World Bank group.

(c)-Role Models: The Government can take inspiration even from countries like Singapore and Dubai where the infrastructure is world class.

(d)-Concentrate on development of tourism-centric infrastructure of just two SEZs, that can compare with world-class infrastructure. In three years time, deem the SEZs as “Primed for International Marketing, and the results will be there to see.

(e)-Scout for the best of advertising and international marketing promotions talent in the world, and assign the job from start to finish to invite, secure and implement FDI in world-class infrastructure projects.

(f)-Open a website, call for research papers and project ideas from public and the entire world of marketing of high profile public places, to suggest projects on infrastructure with some prize money for the projects that best satisfy all the dimensions of the QOG criteria, as enunciated by David Dollar and Aart Kraay, Nobel Laureates in Economics.

(g)-Wait for a three-year gestation period for Infrastructure investments to mature and become operational.

(h)-Launch an aggressive SEZ Marketing campaign showcasing the SEZ infrastructure already available through TV advertizing overseas. In order not to dilute the conceptual issues, the need to keep the “big picture” in view must be emphasized in marketing SEZs, as they will be the enablers for building a world class infrastructure and thereby qualitatively a better all round development of the country.

(i)- The “big picture” in this context refers to “Quality of Growth, with an implicit world class culture as the basic plank. “Quality of Growth“ has an important message to all at the current juncture of economic development of India. A peep into the Chinese SEZ experience with an evaluation of the relative experiences of the two countries presented as Appendix to this Study will shed light on what are the lacuna and where India is lagging behind.

(j)- EPZs-Conversion to SEZs, Is it the Best Practice? Investigating by what measure or criteria the conversion EPZs into SEZs is a sound, if not the best of practices, is an important issue. Converting the existing EPZs into SEZs does not make much sense, the EPZ’s size and infrastructure being a major constraint for SEZ growth on the lines of ideal Chinese SEZ models such as Shenzhen. It is only the customs regime envisaged for EPZs which is sought to be imposed upon them, though not favored by the entrepreneurs in some of the SEZs.

(k)-Improvising with Imperfect Institutions: The Study observes that during the early stages of SEZ development the Chinese too had encountered a complex maze of problems, but waded through by quite a bit of improvisation on rules, imperfect SEZ institutional interface with the rest of the economy, and command and control structures. India too must attempt to go through the drill of institutional R & D as afforded by the Chinese. Unless EPZ entrepreneurs demand a switchover to an SEZ regime, and providing that they satisfy a strict and rigorously evolved criteria for decision choices as between EPZs and SEZs, the decision to convert an EPZ into an SEZ may not be forced upon as a top down decision. China has only five SEZs but a variety of other EPZ type zones, which have a slightly different policy framework.

TRADE DEVELOPMENT STRATEGIES

Promotion of SEZs at Sub-National Level: The Govt of India seeks to empower the States by delegating decision-making power to State-level Export Promotion Committees (SLEPC) headed by the respective Chief Secretary. Progressively, the Center's role in export promotion efforts would be brought down and States empowered in this respect. The office of the Director-General of Foreign Trade (DGFT) has launched a drive for drawing up State-wise export data, which would help the process of apportioning funds under the scheme of Assistance to States for Infrastructure and Development of Exports (ASIDE) based on individual export performance. The ASIDE scheme was specifically meant to ensure a bigger role for States in the export promotion effort under which the country is targeted to turn in a cumulative figure of US$ 82 billion by 2007. This Study discerns a sudden surge of interest with politicians and pressure groups lately pressing for SEZ start-ups, almost at random, which needs to be checked. The momentum triggered by SEZs should not plunge the government into pandering to a regime of tax holidays and concessions, creating thereby a major dent in the Central Govt’s exchequer. ICTs and international best practices in accounting standards should plug in any loopholes hitherto bogging down EPZ/ SEZ performance and show a credible, viable growth path for SEZ entrepreneurs, without resorting to devious methods.

Marketing Support: In order to effectively market the SEZs, and having regard to the availability of skills, socio-economic infrastructure, metro-based SEZs should be served from hinterland areas by smaller EPZ type zones, appropriately termed “clusters”, as enclaves of feeder services support. A UNIDO study indicates there are 354 clusters in India, with 34 having a turnover of Rs 1,000 crore or more, and a few with a gross turnover exceeding Rs 10,000 crores. Additional efforts at State/ other sub-national levels would be necessary to communicate the role and importance of SEZs, not as mere export drivers, but as “major economic policy interventions” leading to all round development and prosperity. Toward this end SEZs managements should deepen and widen their interface with the State governments, work in concert as well as structure public-private partnerships with a mutually beneficial stakeholder interest, and make joint bids to attract FDI. The Development Commissioners and Customs officials in the EPZs should get a good understanding of the functioning of SEZs based on face to face interaction with their counterparts in China.

The thrust of SEZs in China was on attracting FDI and Technology, and that should be the prime concern in India too. Such ambitious drive might remain a pipe dream without aggressive marketing and promotion. SEZ managements in China woo investors aggressively. Provincial and local authorities compete with each other to attract investors. India should send delegations abroad to acquaint prospective investors with Indian SEZs and their potential, salient features, facilities, incentives and investment procedures. Indian missions can play an important catalytic role in this regard.


STATE-CENTER – ROLES AND RELATIONSHIS

Unrealistic Policy-making and Administration: The Study reveals that there is little convergence of objectives and strategies between the Central and State governments. As such, policies are short-lived, lack long-term vision, often leading to dilly-dallying when it comes to implementation. With a change of government at the Center every 3 to 5 years, there is a change in stance and perception of policies resulting in lot of confusion among the exporting community. There is then no initiative on their part to increase volumes.

“Although India has traveled some good distance with EPZs as an export-led policy instrument, today the EPZs seem to have lost their relevance and outgrown their utility. They are in no way better off despite all the policy announcements and liberalization measures”. Such remarks on EPZs are a sad reflection of EPZ Administrators in India, and seem to suggest how a successful policy intervention can crumble when there is no good governance. To transform EPZs as more successful ventures, we need adequate financial support for provision of infrastructure and transport facilities, relatively low factor cost, a favorable national framework including guarantee of private property rights, a low degree of tariff protection, convertibility of currency, a stable legal and administrative regime and also single-minded devotion to the aim of making India a full fledged open market by 2005. Setting up of Free Trade Zones/ Free Ports/ Off-shore Banking Units was debated at considerable length for several years.

The Indian government always takes a very short-term view, often gets caught in a fiscal mess, and has no better option but to stall the project. With too many windows in the administrative setup, complications and misunderstandings are bound to arise. Unless and until an overall liberal framework is designed to look into monetary, trade, fiscal, taxation, tariff and labor policies, all other efforts will go waste. India needs an overall policy for infrastructure development. Offshore banking centers, duty free shopping zones, recreational areas and port services are also the need of the day. These services will facilitate an overall healthy growth. India has economic advisors of international repute but implementation is awfully slow. Unless and until labor laws are made foolproof, and removal of monetary and fiscal constraints addressed expeditiously, aping the Chinese model will not be productive. The need of the day is not only EPZs and SEZs, but export-enabling and export-expediting zones as well. These zones should have facilities for storage of goods without customs documentation.

SEZ MARKETING – NEED FOR POLICY STRATEGIC SHIFTS

Export promotion: The Govt of India must promote exports through greater emphasis on export processing zones, elimination of product reservations for small-scale industry, encouragement of the info-tech sector, and elimination of administrative barriers to foreign direct investment. India could have achieved what China has achieved in export growth, but India failed in basic policy strategy. At the center of China's export strategy were the special economic zones or SEZs in which favorable export conditions were assured. These SEZs, along China's coastline, were designed to afford foreign investors and domestic enterprises favorable conditions for rapid export promotion. All key aspects of the export environment were secured. Exporters, for example, were allowed to import intermediate products and capital goods duty free. They were given generous tax holidays. The exporters were assured decent physical infrastructure, often through the provision of land, power, physical security, and transport to the ports, within specially created industrial parks. India too has experimented with EPZs, but India's approach has been one of relative neglect rather than support. While China's five main SEZs have been very successful in exports, attracting foreign direct investment, and creating large-scale employment opportunities, by contrast, India's main export processing zones have not succeeded in any of these areas.

India's EPZs performance at 3.8% of exports compares very poorly with China’s 40%. EPZs have not performed as well as China's SEZs for many reasons, including: limited scale and over-crowding of the EPZs; insufficient logistical links with ports; poor infrastructure in areas surrounding the zones (e.g. unpaved roads and poor physical security); government ambivalence and red-tape regarding FDI; unclear incentive packages governing inward investment, and lack of interest and authority of state and local governments, and the private sector, compared with the central government, in the design, set-up, and functioning of the zones. In China, major responsibility for SEZs rests with local and provincial governments, whereas in India, the responsibilities remain heavily with Delhi. Under these circumstances, many state governments have actually been averse to locating EPZs in their state.

Successful implementation of SEZs would be contingent upon participation of players with relevant skills, availability of adequate financing for the project, and strong support from a stable central government for policy decisions. The basic elements in this regard comprise:

(a)-Ability to attract strategic players, eg.. investors and financial lending institutions as stake holders in the SEZ Project;

(b)-Land and infrastructure development to world class standards;

(c)-Effective marketing of the SEZ project to tenants, both from India and from overseas;

(d)-Operation and maintenance of infrastructure

(e)-Strategic location, skilled labor at low cost, with English speaking ability

Structuring India’s SEZs along the lines of overseas SEZ models can be risky, for, the ground conditions are vastly different in India. Unless a sea change happens in attitudes to free markets and proper regulatory mechanisms are in place, the SEZs too may go down in history like the EPZs have. The time is opportune to take the SEZ challenge in all seriousness and identify the shortcomings/ loopholes in our systems, and establish performance monitoring mechanisms to deal with factors impeding success in world class growth. Toward this end, we might have to scout for role models to emulate, identify the critical success factors inhibiting our performance and put in place immediate remedial measures. India’s experiment with SEZs can succeed only if India is able to attract some of the international giants to shift their manufacturing bases into these zones.

According to a senior Govt officials, until 1991, only Gujarat and Maharashtra were in competition for FDI investments. But now, at least four others have entered the ring. Kerala, not known for its manufacturing sector, could focus on its core strengths of tourism and IT capabilities. However, the tendency of herd mentality in the SEZ development must be checked as the investments involved are substantial, and success or failure can make or mar the prospects of a whole region once and for all. The lesson is SEZs cannot be developed by any entrepreneur who has money. They must be conceived, planned, developed and administered carefully, always keeping the “big picture” in view.

Spin-offs from Tourism-Centric SEZs: If there is one industry that can bring in Quality of Growth/ Life outcomes to India’s quality starved millions that is tourism-driven infrastructure development. Not only does it contribute to FX earnings, but it also brings in spin-offs in terms of quality infrastructure, clean air and environs. Moreover, tourism-centricity can generate faster growth of India’s vast Handloom, Handicrafts, Arts and Artifacts Industry in the hinterland, enhancing the living standards of its teaming millions. India’s rich culture and artisanal tradition can be expressed, promoted and marketed through Heritage / Eco-tourism Sites and High Profile Public Places (eg., Modern Airports/ Conference, Trade and Exhibition Centers (eg., Petronas Tower (Kuala Lumpur), CN Tower (Toronto), Madame Tassauds Wax Museum (London), The Millennium Dome (London) etc. The time is opportune to develop the Mumbai-Pune Region intensively as a Tourism-Centric SEZ.

During the last quarter of the twentieth century, ie, within two and half decades, from Stockholm to Singapore, Helsinki to Bang Kok, Rome to Dubai, most world class cities went through urban renewal which meant a metamorphosis of sorts. The small Island nation of Singapore, a free port in sixties, has exploited its geographic location as a maritime hub of South East Asia, and transformed itself entirely for international trade and tourism promotion under the leadership of Lee Kwon Yew. Likewise both Bangkok (Thailand) and Kuala Lumpur (Malaysia) (under Mahattir Mohammed) have made rapid strides during late nineties, with tourism as their USP.

So what should India do in order to get at world class environs and living standards? What are the business models for developing a pollution-free worldclass infrastructure in India? How do we finance it? What kind of joint ventures we should think of, and what are the contract methods in vogue? BOT/ Public-Private Partnerships etc? Who in World Bank and International Finance Corporation is dealing with these matters? With US$ 75 billion in our FX kitty, do we still need to go to World Bank to secure financing for our infrastructure development plans? Are there any ready-made models to emulate? Some of these issues are discussed below in respect of specific project ideas, which pieced together will constitute the “big picture” that can be of interest to policy makers/ politicians/ venture capitalists / and potential investors in SEZs, State Governments, SEZ Developers, especially infra-structure/ tourism enterprises. The recent Government decision to open up FDI for real estate development augurs well for the country. In such areas FDI should be welcomed with open arms by Governments concerned.

IN THE INTERNET ERA MARKETS ARE SEAMLESS

IN ORDER TO CARVE A TOURISM-CENTRIC SEZ OUT OF THE MUMBAI-PUNE REGION
A NEW ECONOMY COMPANY SHOULD BE FLOATED, HEADED BY A STRATEGIST
WELL INFORMED ON MACRO-MICRO CAUSALITY

THE TOURISM SPIN IN THE MARKETING OF SEZs

Introduction

The next three chapters seek to make out a case for success of SEZs if they are tourism centric. The economic and employment potential of tourism are only too well known. Once the infrastructure is in place Tourism is a low capital, highly labor-intensive business, with a high economic multiplier. Tourism is a business particularly suitable for part-time and seasonal employment, and thus encourages first-time entrants and women into the work force. In general, tourism is an environment friendly activity, as a degraded environment only keeps tourists away. With some imagination and creativity, every state and indeed every province, can focus on a particular niche, in line with its unique strengths, and comparative advantages. India’s up and coming SEZs at over a dozen locations across the country should do well if they could concentrate on infra-structure and tourism.

Here again India is well advised to compare itself with China. About 33.2 million tourist arrivals China earned some US $ 17.8 billion as tourism earnings in 2001. At that level they were already the world’s fifth most popular tourist destination. It is not just China that beats us hollow in tourist arrivals, Malaysia with 19 million, Hong Kong with 13 million, Thailand with 9.6 million, and even tiny Singapore with 6.5 million. All are far ahead of India’s poor 2.6 million arrivals in 2001. The irony is that India with its long coastline, pristine forests, pilgrimage centers and cultural heritage sites ought to have attracted more tourists.

The story is no better when we look at domestic tourism. Official figures on domestic tourists are hard to come by. However, the numbers are nowhere near China’s 784 million in 2001 that netted that country an astounding US $ 42.4 billion. That despite the recent World Tourism Council’s finding that Indians are among the fastest growing travelers in the world. The reason for both cases is the same. The abysmal state of infrastructure in our country. Why would anybody want to visit India when the experience is anything but enjoyable? Strating from the touts at airports and railway stations to exorbitant hotel tariffs, (thanks to luxury taxes on hotel rooms), to pot-holed roads, to poor transport facilities, to power break downs to the general absence of law & order, the list of woes is endless. Unless we address this basic issue of Infrastructure, we will continue to miss out on the opportunities offered by the world’s largest industry, one that is labor intensive to the hilt.

The small island nation of Singapore is entirely geared to foreign trade, and to think of the economies of France, Italy, Thailand or Egypt without tourism is inconceivable. It has therefore been felt that a Study of Special Economic Zones will understand the relationships between tourism-infrastructure-governance so that a closer look be given to examining the gaps and identify corrective measures that would be needed to give a tourism a big push. It must be noted that SEZs and world class infrastructure are inter-related. The spin-offs accruing from SEZs and Infrastructure are highly correlated in the kind of multiplier effects they can bring to bear on the overall economy of the region in which the SEZ is located. Hence the strong accent on this study on infrastructure development.

The Tourism Proposition in the Marketing of SEZs

In light of the foregoing that in order to attract investments in SEZ one must convince the overseas investors that the SEZ has a world world class infrastructure. India’s tourist arrivals declined from 2.6 million in 2000 to 2.5 million in 2001 and further down by 7.2 % to 2.4 million (provisional) n 2002. In terms tourism Dollars, the earnings declined by (4%) from US $ 31.7 billion in 2000 to US $ 30.4 billion in 2001 and by 7.6 % to US $ 28.1 billion in 2002. Maharashtra is low down at sixth place as tourism destination in the country.

Let us consider the list of world class investments we have thought about in Chapter-IV: Priming Mumbai-Pune Region as a Tourism-centric SEZ

PROJECT IDEAS

[A] MUMBAI-NAVI MUMBAI REGION

A-1: Develop a 500 km long Peripheral Corniche to beautify Mumbai’s East- West aswell as the Southern Sea-front

A-2: Develop Modern Rapid Transit Express Ways in Around the Mumbai Island

A-3: Develop a Six-lane Express Way-cum-Rail Bridge on the Arabian Sea from Gateway of India to Elephanta Islands and connect it up with Konkan Railway at New Bombay. Develop an ultra-modern Corniche on the Eastside and New Bombay sea front on the lines of Sydney’s Darling Harbour* [To be treated as a 21-Century Dream Project, showcasing India’s engineering skills, this should reduce Mumbai-Pune commuting time on specially laid MagLev Tracks to just under one hour, and give tremendous fillip to New Bombay International Airport at Turbhe en-route Karjat]

A-4- Railway-cum-Link Expressways Development

A-5: Total Overhaul and Facelift for Railway Stations

[B]- THE LONAVLA-MATHERAN-MAHABALESHWAR REGION


B-1: The Lona Valley Authority

[B-2: Hill Resorts-Mahabaleshear/ Pancghani/ Matheran


[C] - THE PUNE REGION


[C-1]- Development of Pune as the Second IT and Bio-Tech Capital of India

[C-2}-Heritage Tourism, conserving SimhaGadh Fort, creating a Son-e-Lovre spectacle as a tourist attraction, ropeway connecting Range Hills-Parvati-SimhaGadh

[C-3]-Sports Complexes, including a closed roof cricket stadium on the lines of Melbourne Stadium in Australia at range Hills

[C-4]-International Conference and Exhibition Center on Senapati Bapat Marg

In order to market Mumbai-Pune SEZ first and foremost the an SEZ Master Plan should be prepared, It should include the world class infrastructure development and the governance reforms being undertaken to speed up the policy and decision making processes. Apart from prime time Advertizing on CNN, BBC etc, once in every three days, the SEZ authorities should organize conferences and events showcasing the Mumbai-Pune SEZs as ultimate destinations for investments. Participation in The World Economic Forum, Davos (Switzerland), the APEC in Singapore, and inviting the lead members of India Caucus from Houston (Texas), USA will help a long way. Use of Audio-Video media like International Teleconferencing on leading Television Channels, using CD ROMs for publicity materials would be highly effective and recommended in this context.
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[A] - THE MUMBAI METROPOLITAN REGION


Project Idea - [A-1] : Develop a 120 km long Corniche to beautify Mumbai’s East- West Sea-front

Mumbai is an Island City stretching South-North a length of 40 km on the Arabian sea front. Surrounded with a demure Arabian sea-front, the Island city of Mumbai has excellent potential for developing a long Corniche alongside the Western and the Eastern sea-fronts. As one travels from Malabar Hill to Marine Drive, the West side sea front is beautiful. From a distance the Nariman Point skyline dotted by the three skyscrapers, the Air India Headquarters, Express Towers and Oberoi Towers, reminds one of the Manhattan skyline of New York. Except for the Marine Drive ending at Chaupatty beach (called the Queen’s Necklace), the Band Stand, a small stretch of land on Bandra sea front, and the Madh Islands off the Malad coast, no attempt has been made to develop the Mumbai sea-front, not even a Corniche with green promenades and boulevards, neither on the West nor on the East. Even the Arabian Gulf cities of Dubai, Abu Dhabi, Jeddah and Manama boast of well-maintained 40 to 50-km long Corniches meandering the Arabian and Red Sea coasts, punctuated by resting points, museums, entertainment parks etc.

To the old timers who came to see the city, Bombay always presented a dishovelled, unkempt look, a sad state of affairs, a mismatch to the image to the city’s image as the Commercial Capital of India. Thanks to the industrial policies of the pre-independence era, quite a few pollution-causing industries that came to be located in the suburbs: from Dadar-Parel (textiles), Koliwada (fisheries, EI-tanning), to Kurla-Bandra to Andheri and beyond further North (garments, travel goods, footwear etc0. It is time that the Government of Maharashtra thought of radical transformation in terms of urban renewal of Mumbai with a tourism-centric bias. Now that industries are moving out lock, stock and barrel, Mumbai’s Metropolitan Development Authority should try to develop a comprehensive urban renewal program.

Project Idea [A-2]: Develop Modern Rapid Transit Express Ways in Around the Mumbai Island

The Corniche alone is not enough. It should be part of an Integrated Project to promote tourism, and attract international traffic to Mumbai-Pune Region. There are some projects on the anvil that will change the landscape of Mumbai’s western sea-front. Construction of a three lane 8-km Bandra-Worli causeway is already under way. The Government has plans to connect Worli with Nariman Point via Malabar Hills, on the lines of the Golden Gate Bridge of San Francisco. This can be extended further on to Cuffe Parade into the World Trade Center complex on the Southern side, and upto Versova (Andheri) or Madh Islands (off Malad) in the North, so much so people can commute fast and comfortably from Cuffe Parade to the Western suburbs.

Project Idea [A-3]: Develop a Six-lane Express Way-cum-Rail Bridge on the Arabian Sea from Gateway of India to Elephanta Caves Island and connect it up with Konkan Railway at New Bombay. Develop an ultra-modern Corniche on the Eastside and New Bombay sea front on the lines of Sydney’s Darling Harbour*

[To be treated as a 21-Century Dream Project, showcasing India’s engineering skills, this should reduce Mumbai-Pune commuting time on specially laid MagLev Tracks to just under one hour, and give tremendous fillip to New Bombay International Airport at Turbhe en-route Karjat]

The Island of Elephanta Caves on the Arabian sea can be developed as an excellent heritage tourism site. One must think big here. A Six-lane Express way, can be developed as a rail cum road bridge across the Arabian sea, touching the Elephanta Caves Island, and connecting to Konkan Railway at New-Bombay, and thereon Panvel-Karjat-Pune. This region can emerge as the alternative rapid transit route connecting Mumbai and Pune via New Bombay by round the clock Air-conditioned Commuter Trains from the Central Business District of Nariman Point/Cuffe Parade to Pune. Ultra-modern Japanese style Bullet trains using German Mag-Lev Technology (Magnetic Levitation Track Technology) can be used (China has recently done the same) to commute at peak seeds upwards of 250 km per hour so that the Mumbai-Pune commuting time is reduced to just one hour. Apart from speed, an important objective of this new Railway line is to showcase the Mumbai-New Bombay East side corniche and seafront with a new Manhattan-styled skyline, that projects the excellence of India’s achievements to 21 st Century audiences.

Need for a Big Picture: In planning such, mega projects, it is necessary to develop a White Paper on the Big-Picture that a tourism centric SEZ should aim at. So that down the line, during the course of implementation, the big-picture is not lost sight of, create insurmountable roadblocks.

Millennium Gateway Theme: An integral part of this project should be the construction of a new monument, a new 21st Century Gateway of India mounted on a tall, well-lit structure on the Elephanta Island as a special tourism attraction. (A round trip ropeway originating from a New CST Terminal traversing over the outer most tip of Nariman Point via-Cuffe Parade, Afghan Church, Taj Intercontinental Hotel and on to Elephanta Caves. If a worldclass Conference Center, luxury cruiselines and commuter hovercraft facilities across the Arabian sea to New Bombay, and extending thereon to Goa are added, the ambience of a high profile heritage tourism site on the lines of Singapore’s Sentosa Island will have been created that can work wonders for the SEZ. This entails sprucing up the entire Business District comprising the Fort, Nariman Pont, Cuffe Parade, Colaba Causeway, Kalaghoda and the Taj-Gateway of India complex. For tourists site-seeing on a ropeway that traverses in the skies should after all present a clean, orderly, spruced up city. Many of the old Tourism sites of Taraporewala Acquarium, Prince of Wales Museum, Nehru Planetarium, National Center Performing Arts (NCPA) etc will receive tremendous boost in revenues once these sites are inter-connected devolving on the “Millennium Gateway” concept.

A ropeway connecting Bandra’s Pali Hills to Worli’s nearby Malabar Hills (with a feeder ropeway from Malabar Hills, via Mahalakshmi Temple to Haji Ali) to Nariman Point, then to Taj-Gateway of India complex and extending into the sea to Elephanta Caves Island would be a befitting touch up for projecting the Mumbai-city as a sought after tourist destination. Plans are underway to develop the Bandra-Kurla Complex (BKC) as a Modern New Business District, an International Finance and Banking District (with appropriate legislation and using the Special Economic Zone concept enunciated in this Study, Off-shore Banking Units (OBUs) too are slated to be part of the Mumbai-New Bombay-Pune SEZ. A mega project like this is expected to generate spin-offs in terms of faster economic exchanges, higher labor productivity and wholesome growth of international trade.

(*)- Some International Comparisons

(a)-The Waterfront at Darling Harbour, Sydney

In the modern jet set age, International Conventions, Conferences and Exhibitions not only enable exchange of knowledge, and promoting trade, they can boost a city’s image Darling Harbor, Sydney (Australia), a decrepit industrial area just two decades ago, is one of the most happening tourist spots in Australia. Called “Tumbalong” or meeting place by the aboriginal people, Darling Harbor earned the moniker of “Cockle Bay” from the white settlers because of the abundance of sellfish to be found there. The harbor acquired the name Darling Harbor in 1826 after the then Governor of New South Wales Ralph Darling. By the 1950s,however, Darling Bay was eclipsed as most of Sydney’s port and container traffic moved to Botany Bay. By the mid-1970s Darling Harbor was a series of empty warehouses, rarely used train tracks, and only the odd vessel used its wharfs.

In a landmark decision, the New South Wales Government announced in 1984 that Darling Harbor would be re-built as a waterfront precinct with parks, museums, walkways and the Sydney Convention Center. Most of the area was demolished, and an army of architects, designers and consultants got to work. Four years and an investment of $ 900 million later the new Darling Harbor was thrown open to the public by Queen Elizabeth. Of the total investment $ 300 million had come from the private sector. By 1999, just in time for the Sydney Olympics, over $ 1.5 billion was invested in the new Darling Harbor. It hosts five Olympic sorts- Boxing, Judo, Wrestling, Weightlifting in the Sydney Convention and Exhibition Halls, and Volleyball in the Entertainment Center.

The Centerpiece of Darling Harbor is the Sydney Convention & Exhibition Center (SCEC). SCEC has six halls offering over 27,000 sq. feet of fully serviced exhibition space. In addition, it boasts of over 30 meeting areas in the Convention Center making it convenient and practical for exhibitors and organizers to host associated business activities simultaneously such as product launches, training, corporate entertaining and cause-related market events, conventions, congresses. Built around this area are a series of attractions to keep visitors interested and entertained (Can we, in Mumbai, shift the Indira Docks, lock, stock and barrel to a location down south like Ratna giri, and re-develop the Eastern sea front from Thane Creek-Kurla-Koliwada to Ballard Estate, a spacious 50-acre Garden around the Gate Way of India (if necessary by land reclamation eastwards upto a 5-km stretch into the sea (first to create space for a new Shinkansen (*) (Bullet Train) Terminal – a jetty smack on perpendicular alignment with the Gateway of India, and secondly to develop a beautifully landscaped East-side Corniche. The Reserve Bank of India headquarters and Defense establishments in the vicinity and PSUs (like Mazagoan Docks will be left untouched).

#-Chinese Garden of Friendship: This was designed in China to celebrate the Australian Bicentenary. The garden was a gift to Sydney from its Chinese sister city of Guangdong. It is one of the largest of its type outside Asia, with pavilions, lakes, waterfalls and a Chinese teahouse. The gardens were designed by landscape architects and embody principles dating back to the 5th century.

#-Cockle Bay Wharf: This was designed as the new “in” place to be, with a mix of budget outdoor eating joints, and posh restaurants. A large complex on the city side of Darling Harbor, has given the harbor the much needed boost.

#-Sydney Acquarium: This is one of the largest acquariums in the world with more than 5,000 different Australian fish displayed in their natural habitats. Visitors can “walk on the ocean floor”, through 145 meters (480 ft) of acrylic underwater tunnels.

#-Other attractions include the Sydney Entertainment Center with an eight storey high I-Max screen, Australian Maritime Museum and Harborside Shopping Center with several waterfront areas.

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(*)-The Shinkansen (Bullet Train) of Japan: Before 1964 there were limited means of travel in Japan. One could walk, ride bikes, or take a car. Now there is a much faster and more efficient way to travel around Japan. This is Shikansen, or Japan's bullet trains. Shinkansen was first opened in 1964, to help Japan's transportation system. It has done so very well. Its first line was the Takaido. By then the trains then were already runnig at speeds about 200 km/h. Japan had trouble with its other trains. With Shinkansen, however, the trains were fast and always on time. Now Shinkansen holds the world speed record. Fastest scheduled averarage speed between two station stops was 261.8km/h (164mph) in Japan with the 500 series "Nozomi" between the two West bound stations Hiroshima and Kokura, in March '97. Fastest scheduled average speed starting and stopping stations was 242.5km/h (152mph) again in Japan with the 500 series of "Nozomi" between Shin-Osaka and Hakata, in May 1997. It is obvious how the Bullet Train has helped, not only Japan's transportation, but also its economy. In 1982 the first North bound lines, the Tohoku Shinkansen from Tokyo to Morioka and the Joetsu Shinkansen to Niigata, were completed.

Every year Darling Harbor stages a series of colorful festivals, comprising Darling Harbor Jazz festival, Circus and Street Theatre Festival, Darling Harbor Fiesta and Winter Music Program, and Summer Holiday Program.

Spin-off Benefits to New South Wales: Since its re-development, Darling Harbor has developed into an important area for leisure, culture and business. Besides its many commercial attractions, it offers a wide range of public areas for cultural activities, festivities, community events etc. and has attracted over 150 million visitors, almost a quarter were overseas visitors. Darling Harbor employs over 4,00 people and earns over $ 600 million in revenues. With an average annual descent of 1.3 million tourists visiting this ultra-modern precinct, the hospitality industry around Darling Harbor received considerable boost. There are in excess of 2,700 rooms available in Darling Harbor, ranging from the five star Hotel Nikko now called Four Points by Sheraton Sydney (the largest hotel in Sydney with 649 rooms) to the three star Aaron’s Hotel, which include serviced studio apartments such as the 216-room Center Mercure Apartments. With about 700 events organized round the year, Darling Harbor’s hotel notch healthy occupancy rates of 85%.

The Darling Harbor Management Company works in partnership with many groups to present a variety of other special events such as: Carnival, Christmas Pageant, Gold Sunday, Lantern Festival, Australia-Chinese Day, World’s Longest Buffet, Waiter’s Race, Sydney Festival and Destination one. (Perhaps MTDC and NGOs like Bombay First should take a cue from Sydney’s Darling Harbor and press for such tourism-centric SEZ in Mumbai-New Mumbai-Pune (to be christened as SWEMZEN) (a la SHENZEN of China).
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[A-4]- Railway-cum-Link Expressways Development: The setting up of Mumbai Railway Vikas Corporation (MRVC), and the merger of Central and Western Railways under a single entity MRVC augurs well for tourism within the Mumbai metropolitan region. With the merger, Mumbai can develop its railway system and handle its traffic flows in an integrated, seamless and hassle-free manner, emulating the London Metro in this regard.

Recently the Mumbai Metropolitan Regional Development Authority (MMRDA), Mumbai has announced the taking up of the Mumbai Urban Transport Project (MUTP) in a big way. Financed by the Govt of Maharashtra, Govt of India and the World Bank, the MUTP Project, which envisages public private partnerships (including those with the NGOs), has announced launching of the following ambitious projects:

(a)-Improving travel comforts by optimizing the existing railway network, adding new lines, and introducing new technology 12 coach rakes.

(b)-Efficient East-West Road links, improved traffic management around the railways stations, improved pedestrian facilities;

(c)-Conversion of DC to AC system for suburban trains

(d)-Less crowd in coaches;

(E)-Rail over bridges at Jogeshwari, Vikhroli and Kurla

(f)-Station Area Traffic Improvement Schemes at Dadar, Andheri, Malad, Borivali, Ghatkopar, and Chembur

(g)-State-of-the Art Traffic Signal System for the Island City (Around 250 junctions)

(h)-Procurement of 500-eco-friendly buses for BEST

(I)-Construction of a number of pedestrian subways, foot overbridges and footpath improvement.

(j)-Removal of 20,000 encroachments on the road and railway corridors.

(k)-Rehabilitation of 19,128 households affected by MUTP.

The MUTP is planning to undertake as many as -- East–West Link Road projects in the bustling Metropolitan Island City of Mumbai. An important dimension in these mega projects is again quality of project planning and execution. This is discussed in the next Project Idea in conjunction with improvement of Rail stations. If India has to proudly showcase at least some of its infrastructure as world class the time is now to put the act together. Be it in respect of railways stations, ports, railways expressways, the time to start with a world class quality accent is now. The project however should be part of the Mumbai-Pune SEZ plan, so that the big-picture is available. Thus while planning mega projects for Railways, it is necessary that reputed Tourism Development consultants be involved, A multi-disciplinary group can contribute better keeping all the technical, environmental, popular points of view. Against this background the following Railway Project Ideas have been mooted to be treated as part of a Medium to Long-term MUTP Projects stem list.

Total Overhaul and Facelift for Railway Stations

Most Mumbaites have endured the dirt, stink and squalor of the same old decrepit dungeon like Victoria Terminus, Byculla, Dadar, Kurla, Thane, Kalyan and Bandra, Andheri, Borivali, Virar railways stations for ages. In fact they did not receive a single facelift worth the name for a half a century now. Now that Mumbai has a separate Railway zone for itself, it should be in a position to undertake major facelift operation for all these railway stations, keeping the “big picture” of world class in view:

(a)-CST Terminal: Without disturbing the heritage structures of the old Victoria Terminus, a new Millennium Dome like structure can be erected to make CST look a New York Grand Central replica. There are specialist Architects and Designers like Norman Foster, London (UK), whose core competence is design excellence for high profile public places. In a CNN interview, they showcased themselves as pioneers in the field, with achievements like the British Airports Authority (BAA) new office complex at Heathrew. A bustling 8-storey Shopping Mall-cum-Car Park, on the lines of Millennium Dome in London can be constructed on the land area covered by CST and its neighboring precincts covering the existing suburban and up country train terminals, the reservation office area, the bus terminal, the jumbore of shops and pavement vendors transacting business opposite CST.

(b)-Project visualization and design skills represent critical success factors in this Project. The cooperation and participation of all the Vendors/ Shop keepers in the vicinity, enjoined into Public-Private Partnerships with Bombay Metropolitan Regional Development Authority (BMRDA), can be enlisted to form a corporate entity. A large Circular Dome like structure can be thought of encompassing the area and including the Head Post Office upto DN Road, Fort, Times of India to adjoining subway and basement complex South by South-West. The current subway at CST chokes with 100 percent probability of spread of “SARS” like diseases during peak times.

(c)-The covered Millennium Dome, which will have a user priced entry ticket (to be operated by smart cards), will serve the dual purpose of CST exit and entry into a Shopping Mall, that will have ultra-modern design features. As in Airports, the arriving and departure traffic will be segregated by separate entry points Level-1 (arrivals) and Level-2 (second floor for departures), with basement reserved for a car park, and Bus Station with access and exit points to the Head Post Office, Ballard Pier and D.N. Road, tightly guarded by security staff. When passengers arrive, they will be stepping into a cool air-conditioned first level of the Dome, with escalators moving up and down, into the ambience of an ultra modern shopping complex, with a pleasant fountain at the center. Why dies India need all this? A pen pushing, cost-cutting bureaucrat may question. Yes, India wants to be there at the top of the charts in quality life, and Bombay First must gird up its loins to get this done. Level 3 to 8 will be the Shopping Mall with all services, facilities and wares, including Banks, FX vendors, Flower Vendors, Gymnesia & Healthcare facilities, Bowling Alleys, Restuarents, but few reputed brands of eating joints. The top floor of the Millennium Dome should be connected by a ropeway to facilitate appropriately user priced tourist travel across to Indira Docks and Gateway of India to Elephanta Caves.

(d)-Gateway of India to Elephanta Caves-A Heritage Complex: The Indian National Trust for Art & Cultural Heritage (INTACH) has been at the center stage of culture and heritage shows on a few occasions at the rock-cut caves of Elephanta. Both INTACH and the Archaeological Society of India are keen on promoting Elephanta as a world heritage site. INTACH was planning to have a museum, a nature park (with a wet land park) and a cultural center. An Indo-French Partnership called “Partners in Conservation” comprising among others, the Taj Group of Hotels, Air India, BNP Paribas, and Baccarat (last two are French) had a proposal to spruce up the Gateway of India, which along with the Apollo Bunder Area is a notified heritage precinct. Besides some polymer-based quoting required by the walls, the Gate Way structure requires some repairs minor superficial repairs. Here again, the projects appear to be just floating around and forgotten once the sponsor’s events are over.

(e)-Unless conservation of heritage sites upgradation and spruce-up are planned as part of a bigger and integrated tourism or city development plan, the decision makers and invcstors put it on the back burner and lose sight of the project idea. It therefore becomes important that projected ideas are invited from public, assembled and put on a website for public comment. Based on that Project promoters/ venture capitalists can be invited to develop public-private partnership proposals for development and maintenance. In this context, Singapore’s Jurong Bird Park, and Santosa Islands Tourist resorts offer excellent examples of public private sponsors. Tourism entrepreneurship lies in identifying and tapping the opportunities based on what the people want. Jurong Bird Bank has veritable list of sponsors, accredited sponsors, trustees etc. and India Tourism promoters should try to take a leaf out of Singapore’s book in this regard.

(f)-Blueprint for Mumbai Development: Bombay First, an NGO Initiative of the Bombay Chamber of Commerce and Industry, working in tandem with Government has roped in McKinsey & Co to prepare a vision statement for the megalopolis (now to include the proposed Mumbai-Pune SEZ, SWEMZEN stretching from Mumbai-Navi Mumbai to Lonavala -Matheran-Pune-Sinhagadh-Mahabaleshwar. The Bombay First Initiative, supported by almost all top corporates in the Island city as well as the Bombay Municipal Corporation (BMC), the State Government and BMRDA is being planned to make the city liveable. By 2010, Mumbai will have about 27 million inhabitants, becoming the world’s second most populous city after Tokyo. The manufacturing sector will no longer be the city’s main employer. Increasingly services sector will be making inroads in what is considered to be one of the rapidly changing happening cities of the world. “Mc Kinsey Co will be dealing with ways to transform the Mumbai into a worldclass metro”, said S.S. Bhandare, CEO, Bombay First. A forward looking plan taking Mumbai’s development upto 2013 will be prepared by the Consultants. The Report will be looking into special areas of the city’s growth and ways to channellize investments, and is slated for submission by June 2003.

(g)-The Church Gate Railway Station too, which is already constructed as an Office complex, can be vastly improved using the intersection at Eros theater, the heritage site wherein the Western Railway. For 2020 tourist convenience, the Church Gate Station will be a ropeway de-tour point for those disembarking to get on into Western suburban commuter trains. A tall spacious 50-storey Office cum Railway station complex that covers the entire station front area covering the four-road Churchgate junction would relieve the congestion within the Churchgate station. Upto three stories over the ground level plus basement of this hexagonal building can be reserved for car park, and Level 4 to 10 can be department store-cum-shopping complex. An important aspect to be kept in mind here is that as in the case of CST Project, the height of the station roof should be increased at least by 20 % so that the millions of commuters passing by the railway station will have lot more free and less polluted air. Like the Heathrew Airport’s Train terminals, Indian Railways should install large-sized Air Circulators (to clear the polluted air), Escalators for the old and infirm and handicapped people to move in and out without any problem.

(c)-Dadar and Kurla Terminals:. Both the stations need drastic re-alignments, renewal and modernization. With CST reaching a saturation point, there is a proposal to develop Kurla Station as an alternative to take on more train traffic. A Rs 16 crore proposal to expand Kurla Station is under consideration, as also the expansion of the Westside of Tilak Nagar Terminal, by adding new railway lines. Here again, the big picture and a vision 2010 and 2020 needs to be kept in mind before going ahead with investments. Kurla station will eventually be aligned with the expressway development and connected to the new business district being planned at Bandra-Kurla Center (BKC). All most all the busy suburban Railway Stations from Virar to Borivali to Andheri, to Bandra on the Western Railway, and Dadr, Kurla, Ghatkopar, Mulund, Thane, Kalyan on the Central Railway, and Chembur, Deonar -- all these stations need total redevelopment and modernization. And most stations lend themselves for development into modern shopping complexes. What is required is imaginative design and engineering skills to drastically transform them into ultra modern, high profile public structures, to be cherished as tall edifices of modern Indian design and engineering skills..

(d)-By 2020, the existing railway lines would have been overused, and asking for renewal. Unless alternative railway lines are developed across the Arabian sea connecting Taj Intercontinental Terminal at the Gate Way of India to New Bombay via Elephanta island, the City will be choked with insurmountable traffic problems, and the existing railway corridors will be virtually unable to handle the traffic because of the vertical urban growth that is already underway in the Island city. With changing times, comfort level afforded to passenger public should also be upgraded. And that can be done only the way it is done in Washington, the world class way.

(e)-What kind of facelift for Millennium Dome at CST: As one steps on the escalator at the south entrance of the Dupont Circle Metro-station in Washington, and moves down the escalator tunnel, passengers are treated to a sensory explosion, and artist’s creativity is given a free hand. By the installation of 45 moving lamps at the bottom of the escalators and on the ceiling at the entrance to the mezzanine, gold light is projected to look like stars danced among cobalt and purple constellations. As one moves along on the escalators, a soothing flash of yellow, violet, purple, orange and the seven colors of a rainbow lights, the drabness of uniform concrete is gone thanks to a gift from Helsinki (Finland) bringing a psychedelic ambience to the precincts, shower the passengers to soothing delight as the descend into the underground terminal area. The lamps, which can project 2000 colors, are intended to mimic the arora boralia, or northern lights, a natural phenomenon of moving arcs of colored lights celebrated in Finland. At the bottom of the escalator near the fire equipment closet, a computer played recordings of Finnish song birds. According to artist Luukela, “the birds, the sound of nature, gives a certain feeling to this concrete place. Light art is big in Finland, light affects a person’s life” she said. It is time that Indian railways spruced up the Railway stations and got their act together to introduce such innovations to the millions of Mumbai passengers who have been undergoing the torture of train travel over the past 55 years of independence.

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[B]-THE LONAVLA-KHANDAL-MATHERAN-MAHABALESHWAR BELT

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Project Idea [B-1]: The Lona Valley Authority

(a)–A separate regional tourism authority, called the Lona Valley Authority can be created as a public-private partnership or as a joint venture with an overseas hospitality / leisure tourism promotion group to develop tourism in Lonavala – Matheran - Mahabaleshwar belt. The Sahara Group of companies are already there in Lonavla with their sports and entertainment complex under their brand “Amby Valley” The reason for christening this project idea as Lona Valley is to promote brand equity to Mumbai-Pune Express way on the lines of Santa Monica Highway between Los Angeles (LA) and San Diego in California, USA. In fact the surrounding area is also called the Silicion Valley of LA.

(b)-The Lona Valley starting from Karjat to Khemshet can be a separate eco-zone for pollution free businesses like Information Technology Parks (100% EOUs), Offshore Banking Units, Bio-Technology Parks, Gem and Jewelery Parks and Floriculture. The tourist attraction of Lona Valley can be considerably enhanced by setting up a New Space Age Planetorium, a Madame Tassaud like showcase of the great Indian Celebrities of the yore as well as the all time Bollywood Greats The cool climes of Lona Valley also holds attraction for a Universal Studio and Disney Land (LA) style of tourist resort –cum- entertainment complex. There will be good number of takers for such ventures if only they are promoted by an appropriate agency like Lona Valley Authority (LVA), which again can be a public-private partnership. The LVA should see to it that quality and environmental standards are not compromised.

In this connection, it is not out of place to mention here that the Union Ministry of Environment and Forests (MOEF) issued on January 17, 2000 an MOEF Notification under the Environment Protection Rules of 1986 outlining the boundaries of the eco-sensitive zone as well as strict measures to regulate development and industrial activities within the zone.

[B-2]-Hill Resorts

The Mahabaleshwar and Panchgani Plateau: Hailed as a big victory to the environmentalists and the Bombay Environment Action Group (BEAG), which has been battling for long to save the Mahabaleshwar and Panchgani plateau -- the source of five rivers and one of the best surviving hotspots of Bio-diversity in the Western Ghats – from being crushed by the juggernaut of reckless development. The BEAG expects that this trail blazing notification will soon have to be extended to other hill stations like Matheran, Chikaldhara, Panhala and Khandala in Maharshtra, Panchmarhi in MP, and Munnar (Kerala), Kodaikanal, Ooty (Tamil Nadu), Darjeeling, (West Bengal), Simla (Himachal Pradesh), Kurseong (Sikkim), Dalhousie (Punjab), Landsdowne and Kasauli (Punjab). According to the Notification, “the eco-sensitive zone shall include the entire area within the boundaries of the Mahabaleshwar Tehsil and the villages of Bondarwadi, Bhuleghar, Danwali, Taloshi, and Umbri of Jaoli Tehsil of Satara District. A Master Plan for the Eco-Zone demarcating all existing forests, green areas, horticultural areas such as strawberry farms, raspberry farms, orchards, tribal areas and other environmentally sensitive areas is being drawn up. No changes in the land use pattern from green uses such as horticultural areas, agriculture and floricultural parks will be permitted in the Plan.
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[C]- THE PUNE REGION
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[C-1]-Pune the Second IT and Bio-Tech Capital of India: Pune is emerging slowly but steadily as the second IT capital of India. A unique mix of history and tradition dating back to medieval India, earned Pune its present status as a seat of higher education and intellectual excellence with the sobriquet “the Oxford of the East”. After Bangalore, India’s IT capital, Pune is gradually becoming the host city attracting a number of Fortune 500 multinationals in IT and Bio-technology. Pune’s youth are entrepreneurial and are trying lots of innovations in ICTs and solar energy. There are several NGOs in the city sensitive to civil rights and citizenship that a modern city should afford. The Hinjewadi Information Technology Park, C-DAC, NIC, International University Center for Astronomy and Astro-Physics (IUCAA), and a unique constellation of Defense R&D Establishments, -- it is but appropriate that the reach of Pune’s intellectual capital will eventually extend far and beyond into the Lona Valley. And Pune will be in the forefront of design and development of the Mumbai-Pune SEZ plans.

[C-2}-Heritage Tourism in Pune: Pune boasts of a sun-e-louvre spectacle for the Sanivarwada Fort precincts to commemorate Shambhaji. Pune, however, has neglected the great SimhaGhad Fort constructed by Chtrapati Shivaji Maharaj, the great Maratha King of the 17th century. The Fort is dilapidating and the approach road is narrow and far from safe. It is time that Maharashtra Tourism Development Authority develops and implements a Master Plan to revive the glory and heritage of Shivaji Maharaj. The Pune Development Plan was recently critized by the civil society for its tendency to encroach and eventually making it a haven for builders to exploit it to the hilt in a haphazard manner. In this connection, Pune can think of pr-empting such moves by a CN-Tower like structure on the Range Hill (near the University), with a ropeway extending from there to Parvati (which means the entire stretch of the city from the Ganesh khind Road (University Circle) to Senapati Bapat Marg, Bhandarkar Road, Deccan Gymkhana to Parvati should be spruced up by PMC. And PMC can take a leaf out of what is happening next door in Hyderabad, how the city is geared to get a mid-night wash under Chandra Babu Naidu administration.

[C-3]-Sports Complexes: If India has to reach the status of a sports superpower by 2015 at least, Mumbai-Pune should aspire from now on to stage Olympics in this up coming Megalopolis. There are quite a few vacant spaces in the city crying for funding and development. The decrepit, unkempt sports stadium behind Ambedkar Bhavan, the Deccan Gymkhana etc to mention a few. There is good scope for developing a closed roof cricket stadium in the vicinity of Range Hills if only the Government is serious in granting the land for this purpose. The Stadium complex can be developed on the lines of Melbourne’s cricket stadium in Audtralia, and a velodrome for cycle enthusiasts, preparatory to showcasing Mumbai-Pune as an Olympics venue in 2012 can also be developed.


[C-4]-Airports/ Cargo-Hubs/ ICDs etc: Quite a few project ideas on the above lines can be conceived to position Pune, apart from Nagpur as an international cargo-hub. The Inland Container Depot (ICD) at Dighi is a step in the right direction. A new International Airport should be away from the Lona Valley (locations like Talegaon may not fill the bill), because Mumbai will soon have a new international airport at Turbhe. Once Panvel is connected with Karjat (a project that needs to be implemented as a priority as a fast track (Mag-Lev) railway line to take on bullet train type super fast commuter trains, the distance between Mumbai-Pune will eventually reduce to just one- and half hours. From the standpoint of traffic affinity and in keeping with projected growth in the Region when fully developed as a Tourism-Centric SEZ, the Pune–Chinchwad region needs an Airport of its own. If it is away from Talegaon, it will open up opportunities for the catchment areas East by South East of Pune, which is agriculturally rich for promoting a Cargo-hub based on horticultural (Ratnagiri Alfonso Mangoes and floriculture products.

SS