Initial Public Offering for India’s Experimental New Urbanism Settlement

It’s fascinating to see that India’s Lavasa project is planning to raise up to 20 billion rupees (or $425 million) in equity on the Indian stock market in an initial public offering (India’s Lavasa to file papers for $425 mln IPO – Reuters) out of a total Rs. 1400 billion project led by HCC. Is “urban” sustainability so hot in a country of exploding cities that it can raise nearly half a billion dollars from institutional and individual retail investors?

As an intro, the Lavasa project is a compact, five-town, seven-hill “city” of 100 sq km already in its first development stage. It’s located about 45 minutes from Pune and 3 hours from Mumbai according to their marketing; this makes it commutable from Pune (by car) and a potential weekend holiday destination from Mumbai. It’s a revamp of the traditional hill station concept at a time when domestic tourism is booming in India and many hill stations have deteriorated despite the mounting need for escape from chaotic cities. In numbers, the project is supposed to build 25,000 apartments and villas, create 50,000 jobs and support a permanent population of 300,000 with 200,000 in annual tourism arrivals projected.

“Live, work, learn, and play in total harmony with nature” says the Lavasa marketing. Lavasa represents a yearning for new places, made from scratch, to provide economic opportunity, clean air, proximity to nature, a simultaneous sense of community and modernity, world-class physical infrastructure and a smart cities, technology-driven approach to services and governance. Prominently trumpeting the adherence to New Urbanism principles and prizes to go with it, the Lavasa project drew in international planning and architecture heavyweight HOK for “eco-friendly planning.”

The new urbanist approach in the project is grounded in the central values of small-town living – the human orientation in scale and the compactness and self-sufficiency of these places. It’s very much in line with the same movement in the United States that is seeking to recast suburbs as the new green. This development includes residential, commercial, educational and recreational/tourism facilities. It’s meant to be pedestrian friendly with open public spaces and walking paths, but the master plan also embraces multi-modal transportation options. Public buildings and community resources dominate the center with a town hall and other centrally placed administrative and social infrastructure with more density at the center tailing off into the residential areas. The focus on the natural environment pays attention to the hill setting with contour trenching to slow runoff, trap sediment and encourage infiltration and hydro-seeding to green large areas and prevent soil erosion, among other sustainable practices.

What we see from a business perspective:

  • Careful planning and a business plan. Take note – sustainable developing country cities need this and rarely have it. Design and planning without a business plan will only work at the highest end of the market where inefficiencies can be absorbed in high profit margins and padding for top notch finishes. As an example of careful planning and a mind towards new governance principles in Indian cities, Lavasa has teamed up with The Times of India to create a Lavasa e-governance site to explain the city’s principles.
  • Economic development and business opportunities at the core. Having business plan from the beginning means being able to attract investment and generate a local economy with jobs. Focusing on service industries, like tech and hospitality, with large global partner organizations and strategic advisors, are aimed at drawing people to live in the project. These partners include Novotel, Neptune, The Apollo Hospitals Group and Oxford University for the establishment of an India Business Centre.
  • A mix of global and local design and planning firms. Global firms, HOK and Development Design Group, are lead planners of the project, but local design firms are also involved, a most unusual occurrence in large scale projects in developing countries. Two architecture firms, Somaya and Kalappa and PK Das, are in fact known for their commitment to sustainability and participatory development. Good to see that Indians have been involved given the typical shame that local design and architecture talent is often deemed not sexy enough for high profile projects or insufficiently prepared or unable to work within business and financial constraints, or incapable of managing large, complex projects.
  • The “smart cities” concept is being injected across the board with a prominent role for technology in planning (GIS and GPS tools), e-governance, services (citywide fibre optic networking and telecoms connections) and economic development. On this last, Lavasa is pitching itself as a teleworking hub.

From a social and environmental sustainability perspective:

  • However laudable the environmental planning, Lavasa seems to be primarily accessible by private car. Although it aims to be somewhat economically self-sufficient, being off the beaten path means more cars on the roads, as well as trucked in building materials for developments and inventories for retail establishments.
  • Surprisingly little is said about energy and water use in this project. The trenching should help with ensuring infiltration, and the groundcover with minimizing runoff, but stormwater management, water efficiency and reuse would be a welcome addition to the sustainability measures, many of which like natural biofiltration could probably be easily integrated into the nature walks. Energy use will be diminished by rationalized transport and density, but given the distance of the villages from major cities, more information about the carbon footprint of the place will be welcome.
  • Social inclusion is somewhat contrived, especially in light of the noise that the land acquisition apparently caused. Service personnel will have their own “self-contained” area. This is being run like a resort where the help may have a cozier than average life but are not community members in their own right (like an actual city) but rather should use the service entrance and stick to their own space during their non-work hours. The project’s aim to include social infrastructure, ensure the affordability of housing units and offer training opportunities somewhat eases the awkward, unnatural separation of classes. The idea of encouraging self-reliance and betterment, as well as a market that preserves the dynamism of traditional informal markets, are good ones. The implementation of these ideas need to be monitored so they don’t end up being just PR.

If villagers have been pushed to less desirable areas, it would have made sense to ensure some sense of community improvement for the towns displaced and near by not just the service village. Reportedly, the lake has been made off limits to traditional uses of waterways by villagers in the area. No mention of existing local communities though presumably many employees may be local.

  • People who work here also need housing and social infrastructure. While the project intends to include studio apartments and rental housing at many levels, that housing will surely also be aimed at students in Lavasa’s professional and technical training institutes. Who will be working in Lavasa, cleaning up, maintaining the properties, serving the high end residents and businesses? Lavasa may have lost opportunities to generate local economies and build surrounding communities.
  • It’s unfortunate to see a potentially admirable effort mired in accusations of non-transparency and corruption. For all the talk about e-governance, the emphasis may be more on efficiency than transparency. Again, a lost opportunity and more fodder for those who point to real estate developers as not community minded and ‘green’ as a sexy market concept aimed at the wealthy.
  • Given the embrace of uniquely Asian design and architecture across the region, as well as rapidly developing Indian high design aesthetics and adapted traditional design, one wonders why Lavasa emulates Portofino, why the houses look like they’re in Northern California and why the shopping areas could be Anytown, USA. Surely, some segment of the population likes the status symbol of this look. Still, this development could have a much greater sense of place and tradition. The Middle East actually has examples of new urban projects that hew more closely to tradition. Hopefully, future towns will bear this in mind.

It’s absolutely true that India needs new cities and that this project appears to aim high. The fact that it’s nested in a business model and answers the yearning for places built from scratch and unsullied by the mess of the Indian city. Still, one can hardly ignore that putting this kind of effort into redeveloping an existing area in a major city could yield equally spectacular results for a fraction of the cost, depending on bureaucracy and legal hurdles of course! SCA would submit that developers can and should still do better to ensure both the transparency and the social and environmental sustainability of these projects – ideas that are good for the bottom line and the project’s efforts to create a self-sufficient and sustainable local economy.

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