GIFT City - Modi's dream close to realisation

Launched to replicate the success of global financial hubs like Dubai, Singapore and Hong Kong, PM Narendra Modi’s dream project - GIFT City - at Gandhinagar, Gujarat, is now well on course to becoming a stunning reality.

Projected as the first of the 100 Smart Cities that the BJP-led government at the centre wants to build, Gujarat’s GIFT city, in the making for about eight years now, has had a slow start. A pet project of the state’s then CM Narendra Modi - said to be inspired in part by a presentation on transforming Mumbai into a global financial hub and existing hubs in cities like Dubai, Singapore and Hong Kong - this ambitious project is slowly but surely coming back to life now that Modi has settled into his new role as the Prime Minister of the country.

Located on the banks of the Sabarmati River at the state’s capital Gandhinagar, about 20 kms from Ahmedabad, this ambitious INR 78,000cr project is a 50:50 joint venture, between the Gujarat Urban Development Co. Ltd (GUDCL) and Infrastructure Leasing and Financial Services Ltd (IL&FS).  Its core mission entails the development and sale of approx 62mn sq.ft of commercial, residential and social space spread over three phases for a multi-service Special Economic Zone (SEZ) and a finance center.

Of the 880 acres of land allotted to GIFT City, roughly 250 acres have been reserved for an International Financial Services Centre (IFSC). The project entails setting aside approx 12mn sq ft. in the first phase, of which about 1.2mn has already been developed. On completion, around 125 buildings with a built-up area of approx 62mn sq.ft are expected to be housed here.

The city’s state-of-the-art utilities and other infrastructure will be managed and operated through a command centre equipped with the latest information and communication technology infrastructure. Environment-friendly facets of the project include the use of an automated waste collection system and a centralized cooling system which will be used to operate the city’s air-conditioning in an energy-efficient way.

With a slew of financial institutions rushing in to book space already, the going has been better than good. Faced with a target of 10mn sq.ft as part of its first phase (to be completed by December 2016), it has already sold land development rights for approx 12.5mn sq.ft. Not suprising then, officials at GUDCL are already optimistic of meeting, if not exceeding the target of 22mn sq.ft for the second phase till December 2020 and 30mn sq.ft set for the third phase that ends in December 2024.

With the project now in the government’s official 100 Smart Cities plan announced in the budget, development activity here has taken off in right earnest. For starters, IL&FS has already developed twin 30-storeyed towers, the tallest in Gujarat at 122 metres in height, offering approx 1.6mn sq.ft space.  In the last year or so, several banks led by the State Bank of India, ICICI Bank, HDFC Bank and YES Bank have purchased land parcels here.

Reputed developers like the Mumbai-based Hiranandani Constructions Pvt Ltd and Bengaluru-based Brigade Group – have also got in to the act and announced projects here. While the former plans to set up a commercial complex here for IT and financial services sector, at an investment of INR 125cr, the later has announced plans to invest INR 500cr to develop a slew of commercial, residential, retail and hospitality projects across the SEZ and non-SEZ areas of the city.

In January 2015, the BSE Ltd had announced its decision to launch an international exchange at GIFT City by investing about INR 150cr to acquire approx 300,000 sq.ft of space. The BSE Brokers Forum, an umbrella body of brokers trading at the BSE, had also voiced its intention to set up a back office at the city at an investment of approx INR 200cr.

More recently, the National Stock Exchange (NSE) has announced its intention to set up an international exchange at a SEZ being developed here. As per its agreement signed with GIFT, the NSE will launch an international bourse here that will offer trading in equities, interest rates and currencies among other asset classes.

This is not to say that there haven’t been any problems. For example, the proposed 88-storeyed, 410 metre tall Diamond Tower still remains a sketch on the project’s many blueprints. The problem apparently lies with its proximity to the Sardar Vallabhai Patel International Airport, just 12 kms away, whose authorities have denied permission for the project.

While GIFT City officials are in constant touch with the Montreal-based International Civil aviation organization seeking technical inputs to change the direction of flights to get the project green-lighted, there have also been hushed whispers about efforts being underway to get the airport shifted from its existing location.

For the moment however all eyes are on the project’s second phase which is to be launched soon at an estimated cost of INR 7, 697cr.

With PM Modi keeping his eyes firmly on its progress and the Union government giving its formal approval to sponsor the project as India’s first smart City project, all decks seem to have been cleared for the successful completion of this ambitious Smart city project as per schedule. Not bad at all for a project which almost got moth-balled in September 2008, following the collapse of the Lehmann Brothers Holdings Inc, the US-based investment bank whose closure triggered the now well-known global financial meltdown.