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Samyukta Bhowmick | June 27, 2005

When the Haryana government first started to pitch Gurgaon, it was as a perfectly planned city. One with international standards of roads, housing and entertainment -- the whole nine yards.

Now, when we should be enjoying the fruits of all this planning, we find that the roads are potholed and bumpy, some pockets experience 12-hour power cuts, there is no public transport to speak of, and every day there is a story in the papers about burglars making off with lakhs.

"This is not what we were promised," says Sanjay Kaul of People's Action, a three-year-old advocacy group in Gurgaon. "The government's forgotten about their 'integrated township', and what are we left with? Malls. Are we going to put up with 12-hour power cuts simply so that we can go to a mall at the end of it all?"

The problem is not about the standard of living, or even the quality of life -- many residents admit that, compared with Delhi, their problems are not that bad. No, the problem lies in the gap between what was promised and what's been delivered.

When Gurgaon started coming up, the Haryana government attracted massive investment from foreign companies and developers, both of whom saw great potential in land that was close enough to the capital, but not so close that it would be part of its crowded dinginess and rising real estate.

Companies like Unitech, Ansals and DLF started cashing in with colonies and office buildings. The malls came soon after, and then there was no looking back. Until, or so it seems, now.

The Gurgaon-Sohna road has been the breeding ground of highrise apartment buildings that offer everything from full power backup to tennis courts, swimming pools and spas.

Recently though, there has been a flurry of unrest here; and investors, who were sitting pretty due to the rate at which prices were rising, suddenly started to edge towards the door.

Simultaneously, down the road, on the 'Mall Mile', it was rumoured that the mall model was slowly failing, that rents were falling along with footfalls. Is this, people started saying, the end of Gurgaon?

As one would expect, the builders and retailers are still optimistic. According to Rajat Jain, deputy manager, sales and marketing, Park View Apartments, "There is really no big issue with the current dip in real estate prices. It was inevitable, due to factors such as the change in government and even the season. Right now, weak investors are getting panicky and pulling out; as soon as these filter out, the market will rise again and prices will stabilise. We're expecting that the real investors will come back in one-and-a-half months. And the average price per sq ft is still Rs 2,100-2,200 -- and with the National Highway expected at the end of this year, even these prices should rise."

Deepak Dua, assistant general manager, marketing, Eros Group, agrees: "The market is not falling, but stabilising. Unrealistic highs have become stagnant -- investors are no longer gaining Rs 200-300 per sq ft every month. Now we're seeing the real investors, people who will actually move in to these flats. There's not as much speculating."

Rosy as this picture looks, there are some sceptics. "Prices are high now," says one industry watcher, "since a lot of new projects have been announced. But over 70 per cent of these projects do not have government permission to build, and there's no telling what will happen to prices once they either do take off, or fail to altogether."

For now, though, the builders are happy. Where they do think that the market has been completely oversaturated is not in residential complexes, but in retail.

Both Jain and Dua agree that the mall market has reached saturation point, and malls either have to change their USP or face extinction. We have seen a little of this change, given how many theme malls are coming up -- first there was the Gold Souk, and now Omaxe will open a Wedding Mall.

According to Kunal Banerji, senior vice president, sales and marketing, Omaxe, "The wedding market is a Rs 50,000 crore (Rs 500 billion) one, and the response to our mall has been excellent. Retailers and shoppers don't have to be present in 10 different places -- everyone wins." Omaxe apparently is investing Rs 4,000 crore (Rs 40 billion) on the development of real estate nationwide, out of which 45-50 per cent is in retail.

While themed malls may have a market, not everyone is willing to admit that the regular mall market is saturated. One consistently successful player in the retail business is DLF, whose City Centre mall has managed to remain popular, despite being one of the earliest entrants.

Ajay Khanna is the head of retail at DLF, and his outlook is still sunny. "The rate of growth of retail in this country is approximately 30 per cent. We have to take this into account when we're asked whether there's a glut of malls. And the pie is increasing -- now we're not catering to just women, as we were several years ago, but the entire family," he says.

"The perception is that the mall is doing badly, but actually this is not true for well-researched malls. Some just don't have the correct mix of retail and format."

Khanna insists that City Centre has neither had to decrease rent, nor seen a fall in footfalls. However, it is no secret that other malls have been suffering from increased competition, the fact that many of the people who walk in are kids who don't convert footfalls into purchases, and shops and restaurants (especially the latter) are not always able to pay rent.

According to an industry insider, rents in the ill-fated Plaza Mall have dropped by 40 per cent, especially after Arcus's disastrous performance within their walls.

But most mall managers insist that this is due only to internal misplanning, and malls that either manage to keep interest high by having events (City Centre and Metropolitan), or cater to a different segment than the others (Sahara) have stayed on their feet.

So now that the residentials have passed the buck to retail, and retail is refusing to hold on to it, who will they pass it to? They can't pass it on to the commercial segment, which is still booming in Gurgaon. Large office buildings continue to attract multinationals and BPOs (Gurgaon is still relatively cheap, compared with Bangalore, for example, or Mumbai).

Vatika and Unitech have set up business centres in Gurgaon, and others like the Raheja Group, DLF and Jaipuria Group are also throwing their hat into the ring.

"There are still MNCs and ad agencies like Lintas moving into Gurgaon," says a representative from Unitech, "on top of all the other MNCs that are already here like Coke, HP and Nokia. Unitech has 2 million sq ft in terms of office space in Gurgaon, and the plan is to add on 8-10 lakh sq ft annually. By 2006, we hope to have added 10,00,000 sq ft."

So there's no one left to pass the buck to but the government. While the private players have delivered on their end of the deal, the government emphatically has not.

Go to Gurgaon, and this is what you'll see: malls, not exactly aesthetically pleasing, but glittering and glinting in lights; highrise buildings, again not exactly giving the impression of tasteful, unobtrusive affluence, but affluence nevertheless; all against the backdrop of traffic jams, livestock spilling onto potholed roads and cars parked crazily as far as the eye can see. Infrastructurally, it is chaos.

The government, however, is also trying to pass the buck. Arvind Goel, superintendent engineer, Dakshin Haryana Bijli Vitran Nigam, says breezily, "The electricity requirement of Gurgaon is 77 lakh (7.7 million) units per day, which is supplied with no shortfall at all."

The residents tell a very different story. Kaul claims that he "didn't know what a power cut was when he moved to Gurgaon in 1997", but as the years went on, he had to invest first in an inverter, then a generator.

And despite the fact that Gurgaon does not have a comprehensive bus system, Anurag Agarwal, administrator at the Haryana Urban Development Agency, has great plans. "A high-tech city like Gurgaon," he says, "should have high-tech solutions. We're looking at options like building a monorail." So a bus system, that's too complicated; but a monorail? No problem.

And before we start laying tracks for the monorail, what about roads into Delhi? Two roads were planned, one from Dhaula Kuan (already behind schedule), and one from Mehrauli, due to be finished early next year.

According to sources, the Expressway has been delayed because the NHAI only acquired the requisite land two months ago, rather than two years -- so much for planning!

There have also been major changes of scope from the original plan -- according to the current plan the Expressway will have eight lanes, signal-free loops for the domestic and international airports, and a 32-lane toll plaza at the Delhi-Haryana border. So again, a road with no potholes, that can't be done, but a fancy eight-lane expressway? Simple.

There have also been accusations of corruption (no surprise there) over the use of external development costs by HUDA. According to SURGE, (Society for Urban Regeneration of Gurgaon and its Environs), "The EDC collection included an amount for building a pipeline from the Western Yamuna Canal in Sonepat to Gurgaon. Though the channel has been constructed, large parts of Gurgaon still do not receive water." SURGE has filed a PIL in the Chandigarh high court, asking for transparency of the use of EDC money.

Mohit Jain, president of the Gurgaon Chamber of Commerce and Industry, adds, "The EDC charges, which should be area specific, are never accounted for. Private developers develop their own complexes, but civic utilities like roads, water, electricity, sewers and transport are falling behind."

HUDA, however, is not concerned with external development costs, or any other kind of costs. "The idea is to make Gurgaon an international city," says Agarwal, "Its urban sustainable development is important as it is a planned city. But the property in Gurgaon is such that the city itself will be able to pay for its infrastructure."

But what about the patches that are not able to pay? Gurgaon has almost 300,000 industrial workers -- what about them?

If you can afford it, Gurgaon is booming. If you can pay for security (but this is not foolproof, given the robbery stretching over eight floors in Essel Towers last month) and 24-hour backup, if you own two family cars, don't mind the bumpy roads, or the one-and-a-half hour commute into Delhi, life in Gurgaon can be great.

But if you're left to fend for yourself (the majority, about 80 per cent of Gurgaon's population), Gurgaon is definitely not the "international city" and "planned township" everyone's been going on about.

And the buck stops with the government: until it, and in particular HUDA, stops making empty claims and actually does something concrete to improve the quality of life of people who live in Gurgaon, it probably never will be.

Gurgaon: now and then


Now: According to Arvind Goel of Dakshin Haryana Bijli Vitran Nigam, "The electricity requirement of Gurgaon is 77 lakh units per day with no shortfall at all."
Later: No plans being made, since there is "no shortfall".


Now: NH 8 and MG Road are the main entry points from Delhi into Gurgaon.
Later: NH 8 will be an eight-lane expressway from Dhaula Kuan. Will include signal-free loops to airports, double trumpet flyover to Dwarka, 32-lane toll plaza. Should be ready by 2006 (behind schedule from December 2005).

Two water treatment plants, comprising 40 mgd, and an open canal with a capacity of 100 cusec
Later: An underground supply line is planned from the Yamuna -- planned capacity is 60 mgd.

Umang Chaturvedi, DLF Phase I

"The great problem with living in Gurgaon is the connectivity disadvantage. My wife and I both work in Delhi, and travel time is over an hour.

"The other problem is security. Otherwise our quality of life is quite good -- we're members of a sprawling, modern club, our house is much bigger than it would be in Delhi. We don't have water or electricity problems, and don't travel to Delhi on weekends since there's so much to do here."

Sanjay Kaul, Sushant Lok Phase I

"I'm disappointed with life in Gurgaon. We face 12-hour power cuts, our power backup runs on diesel which is expensive, we hear of chain snatchings every day, the roads are appalling, even our vegetables are more expensive.

"However, there is a very active civil society, which is exhilarating. In absolute terms, our quality of life is not so bad; compared with Delhi it's probably better, but it's not what we were promised."

Subhodh Bhargava, DLF Phase I

"The supply of electricity is erratic but then it has to be seen in the context of the rest of the country.

"The traffic woes of Gurgaon are because of the lax attitude of its residents and the authorities. Maintenance of roads is required. Unauthorised and encroached parking needs to be checked.

"But it's still better than Delhi, as it takes me 20 minutes to travel from Gurgaon to Qutab in Delhi, but to reach anywhere else in Delhi it takes a minimum of 30 minutes."

Inputs by Nanditta Chibber

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