DAY - I
Dialogue on Public Private Partnerships for Transit Oriented Development in Indian Smart Cities
Many cities have proposed transit-oriented development (TOD) projects in their Smart City Proposals. Some of them comprise engaging with a wider range of stakeholders including private sector, financial institutions, non-government agencies etc. Business and operating models of TOD projects involve exploring options for value capture and capitalising on real estate potential. Structuring an efficient model of engagement of such public-private partnerships would entail closer interactions between public and private sector. In order to promote this stakeholder dialogue between private sector, government agencies and smart cities for implementation of successful TODs, RICS School of Built Environment in partnership with FCO and NIUA organised a “Dialogue on Public Private Partnerships for Transit Oriented Development in Indian Smart Cities” on 12th January, 2017 at Juniper Hall, India Habitat Centre, New Delhi.
This event brought together experts from industry, government and academics serving the built environment sector to deliberate these issues. Two sessions, as mentioned below, were structured to provide a comprehensive overview of opportunities that private sector see in TOD projects and key asks from the sector for sustainable partnerships.
- Session I - Transit Oriented Development: Fillip for Real Estate Partnerships
- Session II - Touchstone Principles for Resilient Partnerships in Indian Smart Cities
Session I: Transit Oriented Development: Fillip for Real Estate Partnerships
This panel deliberated on following questions:
- How will smart cities developments and TODs contribute to the real estate sector and vice versa?
- TOD presents large opportunities for participation of private sector in city development. Is this opportunity real and how big is this opportunity?
- What would be the impact of TODs on urban diversity and affordability of real estate?
- How have been the experiences in the past for real estate PPPs?
- What kind of engagement models/ opportunities are available to develop TODs in Smart Cities?
The panel noted that TOD in India is still in its initial phase and a holistic approach should be adopted to manage the policy, development and financing aspects of it. It was further observed that TOD has the ability to transform our cities, depending on its execution. Therefore it will be necessary to judiciously use land when planning for TOD keeping a close check on the planning, execution and financing aspects. As contemporary planning is focussed on densification rather than urban sprawl, TODs can be the solution. TODs will have an impact on land prices. Many times transit and the surrounding land development need to be approached separately, through these have significant interlinkages.
On the subject of Public Private Partnership in TOD and in general, the panel was of the view that PPP is a good model but its design should be well thought of keeping in mind the market realities. The problems with PPPs as currently being experienced, emerge from the fact that all the obligations lie with the developer while the public partner’s liabilities and responsibility are limited. When a developer decides to invest in a PPP, he/she does so thinking that this partnership will be less risky but in many cases it does not go that way. The panel noted that in many cases the Governments’ hands are also tied and this needs to be improved. Private sector expected that Government to take responsibility for obtaining project clearances; however that was not to be, leaving the former wondering about the utility of Government partnership.
Regarding what should be done differently to improve PPP model, the panel opined that PPP models should be more flexible as per the market dynamics. The framework for resolving disputes in public-private partnership projects should be fast-tracked to shorten the delays and enable better implementation. In the case of partnership not working due to various reasons, the government needs to allow re-negotiations, surrender of the project and quick arbitrations to resolve disputes, depending on merits.
In a PPP model, profit and safety of the developer will have to be ensured or supported by the government. Developers have the appetite to invest however, they want their interests to be safe guarded. Another major concern of private sector is the government agencies’ attitude to cap the project returns for the private partner while various risks are not shared and are transferred to the developer. It was pointed out that an excel sheet cannot predict market dynamics; hence IRR for the developer should be flexible as per the amount of the risk associated with it and shouldn’t be predetermined by government stakeholders.
The panel suggested that structuring of PPPs are important to enable smooth financing. The ease of doing business should be improved, corruption should be checked and the whole process should be fast-tracked. It is important to understand that real estate has various cycles and PPP should have the perspective to unwind the project in case of problems. There is a need for the emergence of a strong, regulatory body in the country as it will boost the confidence of the investors and make the sector transparent. To improve the functioning of the government it was suggested that government officials need to demonstrate their long-term commitment to the partnership, which is possible only if some control of tenure exists.
Session II: Touchstone Principles for Resilient Partnerships in Indian Smart Cities
The second panel deliberated on these issues:
- What are the enablers for a resilient partnership for Smart Cities?
- Do we have suitable financing models and regulatory frameworks for successful PPP in the development of TODs?
- How do we ensure involvement of diverse stakeholders in the development of successful TODs?
The panel focussed on enablers for successful PPP models for TODs as part of Smart City Mission of the government of India. Unlike most global TODs that are developed around railways, Indian projects are developed around bus stations. This makes its impact spread across a large number of smaller areas and thus the need to involve a larger number of regional private players. The panel opined that such projects should have clearly laid out context and contracts; infrastructure should first be developed before developing the real estate part of the TOD. These project would be successful only when there is a strong long-term vision and extensive planning. Panel members felt that smaller municipalities in tier 2 and tier 3 were keen to succeed in their PPP ventures, and look towards larger ones for precedents. They were more open to considering concerns of private sector partner based on the changing market dynamics. It was felt that current environment is not very supportive for the success of PPP in the development of TODs, as past PPP experiences have not been very encouraging. However, if serious efforts were to be put by government agencies to create a conducive environment for implementation of PPP, many private players would evaluate and participate in these opportunities. T3 airport terminal in Delhi and T2 airport terminal in Mumbai were cited as examples of successful PPP models.
The panel discussed that presently the policy governing the TOD is not mature and does not accurately reflect market reality. Delhi metro and the developments around it are good examples of potentially successful TOD, but it lacks the last mile connectivity for commuters. It was felt that the drawback of TOD process is the inequality of FSI design. Additional FSI is given to developers within the influence zone but it has a negative impact since the rest of the city with lower FSI tends to emulate it without supportive infrastructure for enhanced FSI.
The pPanel felt that TOD and Smart city policy needs to be integrated. Increasing FSI and green areas in the policy are important but not sufficient conditions for its success. Market factors and demand trends are very important for successful implementation, as in reality development follows market trends. The high level of fragmentation that is witnessed in infrastructure and real estate development needs to be removed. Policies should be formulated with interests of the end users as an objective. Getting stakeholder consent and support is important for sustainable development of TOD. Ensuring that project proponents spend adequate time in planning and development activities and sharing that information is of prime importance. While private sector can structure various innovative financial models, their participation is driven by the vision of project proponents, right environment and enabling policies & procedures. The capacity of the cities to raise money from Realty Bonds to finance projects has to be tapped in. Similarly, lease renting discounting for PPP should be looked into.
The panel felt that one of the key pathway to have successful partnerships in TOD is to have a long-term vision and planning. The lack of clarity on what smart cities are aiming to achieve – no common shared understanding of the same – is hampering structuring of replicable projects. While smart cities are expected to have layers of technology, it essentially is aiming to provide world class services to its occupants. Technology should be seen as an enabler for fast forwarding citizen satisfaction. Smart city should be based on inclusive planning i.e. citizens opinion should be considered for planning the city as they are the biggest stakeholders. On financing of different projects, it was suggested that government should bear most of the capital costs, and could also extend loans to the private partner on an interest rate that is less than the bank lending rate. This will increase the confidence of the private developers as well as augment the stakes of the public partner in the project. It is anticipated that contribution through direct investment ensures better commitment to the success of the project.
The panel suggested that for resilient partnerships for Indian Smart cities should be is based on:
- Shared long term vision
- Innovative financing structures
- Enabling environment
- Planning holistically
- Proactive stakeholder management and Implementation strategy
Ensuring that impediments are handled appropriately – such as project permits and clearances.
DAY - II
International Workshop on Development of Transit Oriented Development Projects in Indian Smart Cities
India Habitat Centre, New Delhi, 13 January 2017
Organised by National Institute of Urban Affairs, with grant support by Prosperity Fund Programme - Foreign & Commonwealth Office, Govt. of UK.
The workshop brought together about 83 participants including representatives and decision makers from Smart Cities; Ahmedabad Municipal Corporation, Faridabad Municipal Corporation, Ranchi Municipal Corporation, Dharamshala Municipal Corporation, Chandigarh Municipal Corporation, Gwalior Municipal Corporation, Kanpur Municipal Corporation, Thane Municipal Corporation, Raipur Municipal Corporation, Smart City SPV- Kochi, Ujjain Municipal Corporation, Indore Municipal Corporation, Smart City SPV-Jabalpur, Bhubaneswar Development Authority; experts and consultants in TOD from organisations like GIZ, CSE, Mott MacDonald, TCE, ITDP and others.
Transit Oriented Development Framework for Indian Smart Cities is a study undertaken by the National Institute of Urban Affairs, New Delhi supported by the Foreign and Commonwealth Office, Government of United Kingdom. This study aims to develop a framework for Indian Smart Cities on principles of i) integration of land-use and transportation, ii) sustainable neighbourhood development and iii) inclusion of economic, social and gender needs within land-use and housing mix. This study will produce the following deliverables:
1. Global Review of Transportation-Land-Use Integration
2. Set of 3 guidance documents
Learning from MoUDs' TOD Guidance Document and Smart City Plans
Game Changers in TOD
List of Indicators of TOD
3. Model Detailed Project Report (DPR)
Background and Objective of the Workshop
National Institute of Urban Affairs (NIUA) organised the International Workshop on Development of Transit Oriented Development in Smart Cities on 13th January at IHC, New Delhi. The workshop was organised to deliberate on Development of TOD Projects in Indian Smart Cities. It also envisioned to build a network for peer-to-peer learning to facilitate TOD inclusion in city planning process. The workshop was organised in four sessions - Leveraging TOD for Metropolitan Agglomeration, Ecosystem for Transforming TOD Principles into Projects and Institutional Coordination and Capacity Building, followed by an interaction with city administrators.
Inaugural and Overview of FCO projects in India
The Director, NIUA, New Delhi inaugurated the programme giving a brief background and outline of the TOD study at NIUA and the objective of the workshop. He thanked FCO and Prosperity fund for providing the support to for this critically important study. He shared that the TOD study at NIUA was started 7 months ago and included a national workshop and an exposure visit to London with 10 city leaders.
Ms. Claire Allen, Head of Urban Programme, FCO briefed the audience about the Prosperity Fund Programme. She shared that-
- The fund primarily targets at bringing economic and social development in emerging markets.
- The five strands of the Prosperity Fund Programme are- financial services, skills, energy and low-carbon technology, and ease of doing business.
- 25% (5 lighthouses and 4 fast track) of the first 33 smart cities of India are supported by Prosperity Fund.
The programme supports several cities, which include Pune, Indore and Amravati
Session I: Leveraging TOD for metropolitan Agglomeration
Director, NIUA, moderated the session with presentations from various organisations.
Ms. Rewati Prabhu, Director of consulting firm Frischmann Prabhu India and fellow at London School of Economics under the cities programme, presented a case of London City. The key highlights of the presentation are as follows:
- In London, deprivation index was calculated for all parts of the city. The study revealed that clusters of deprived areas are concentrated in eastern part of the city.
- Public Transportation Accessibility Level (PTAL) maps of London revealed that improvements in transport accessibility are required both in western and eastern part of London
- The MAYOR's Plan is prepared to combat the above challenges, and is based on three key principles-
- Developing areas of deprivation
- Improving transport linkages
- Densifying development
- The most deprived areas were considered for the preparation of strategic plans, which will not only improve connectivity but also focus on job creation
- Canary Wharf and Olympic Park in East London illustrates such strategic development that improved accessibility while also creating job opportunities and improving the quality of life.
- These developments resulted in an improvement in the levels of deprivation. Earlier, Newham (part of Olympic Park) was the 14th most deprived area in the city. Following the development of transportation linkage and Olympic Park, it dropped to 104th position.
- Three TOD projects in London illustrate cases that may be considered for suitable replication in Indian Smart Cities by the city representatives-
- Paddington- Regeneration in central London (32hec - Mixed use development)
- Old Oak Common- Transport Super Hub
- King Cross Regeneration - Central London, design is focused on children and women.
The presentation concluded with the observation that transport and transport-oriented development are not an end in themselves but are ways for strategic development; TOD is an opportunity in cities to reduce deprivation, create more jobs and ensure balanced development.
Ms. Lynne Miles, Associate in Planning, Policy and Economics at ARUP, discussed the need and methods to forecast the economic benefits of TOD. The key highlights of the presentation are as follows:
- If all other drivers of growth were to increase by 10% and transport infrastructure were to stay constant, then income growth would be just 9% and straight shortfall in economic by 1%. Therefore, transportation is an essential component for economic development.
- Transport increases value of business through time-saving and helps to provide a larger labour market
- Transit investment has a chain reaction; it starts with generalised investment in transport sector which affects the journey pattern leading towards land use and activity changes which impact productivity and investment pattern
- Arup uses various tools for making decisions on investment. These include-
- Web TAG
- Employment & GVA calculation
- Land value uplift calculation
The presentation concluded with the economic benefits of Crossrail project
Dr. Sreedhar Cherukuri, Commissioner of Andhra Pradesh Capital Regional Development Authority (APCRDA) delivered a presentation on the integration of public transport in the plan of a new city- Amaravati. Key highlights of the presentation are:
- Amaravati, at present, has completed Master Planning, land procurement and infrastructure planning
- Construction has begun in the 54,000 acre of land engaging 24,000 farmers who shared the land for development
- The master plan aims to create a high mode share of public transport by improving transport connectivity, walkability, NMT infrastructure; and creating a multi-modal hub integrating all different modes of transportation
- Three international cases were referred for integrating transportation in Amaravati-
- Singapore for ease of transportation (OD matrix) along with TOD
- Curitiba for enabling higher density along transit corridors
- Hong Kong for integration of public transportation system and property development
- Key learning from these 3 cases included - creating TOD zones mixe and use zoning, incentivising higher density and expediting building permits, including affordable housing along the corridor and decreasing parking requirements.
- Regional job creation along with transit services for regional commuters is considered important in Amaravati
- Traffic and circulation and its integration with the overall master plan is key in the city
- More than 60% of the land in Amaravati is proposed with mixed use; compact urban form, especially in the CBD area is envisioned
- The overall master plan of Amravati covers about 217 sq.m area; the city will create 2.1 million jobs in next 20 years and accommodate a population of around 3.6 million by 2050
- North-South grid pattern of roads (20% area- 519 km) is envisaged
- The 'Zones' within the city are called as Cells; each Cell will support a population of 12,000 to 13,000 within a grid of 4 sq. km area.
- The FSI in township centers is proposed to be 3.5. 15 minutes walk mode accessibility to public transit is proposed in such township centers
The presentation concluded with the observation that Amaravati city will focus on creating jobs with better accessibility and more affordable housing, to invite population to the new city.
Session II: Ecosystem for Transforming TOD principles into Projects
Director – NIUA moderated the session with presenters from various public and private sector development organisation. The aim of the session was to understand the ecosystem that enables any TOD project implementation.
Mr. Vinay Kapoor, CEO and President, Westcourt Real Estate Firm, discussed the planning and development learning from the World Financial Center in Canary Wharf in London project and how the existing public transit system became the lifeline of the then docklands. The key highlights from his talk are –
- The site of Canary Wharf was developed as a CBD to accommodate large financial sector development. The planning started in late 1980’s but soon after the completion of phase I of the project, the developer went bank corrupt as the companies withdraw to shift to east London because of slow (local roads and Light Rail) and poor connectivity from the rest of the city
- Tax incentives were given to the developers’ right from the beginning of the project.
- Jubilee line acted as the new life-line of the project. DLR station is the centre of activities also cross rail new project is under construction which will further connect Canary Wharf with rest of the city
- Although it’s a much higher density area, open spaces and pedestrian-oriented planning was an integral part of the project to retain the essence same of city of London.
- Mixed use spaces within Canary Wharf and residential sectors in the close proximity to keep the public spaces vibrant.
The presentation concluded with the remark that, any large scale development unless supported by transit system cannot support high densities. Also, incentives to the developers, right from the beginning of the project is the key to promoting private sector involvement.
Mr. Rajiv Datt, Senior Advisor to NCRTC, discussed the development of Regional Rapid Transit System and creation of counter magnet for Delhi NCR. The key takeaways from his presentation are -
- The project is conceived to improve regional connectivity of Delhi NCR. The aim of the project is to connect major urban centre around NCR with the central city.
- Faster transportation for people living far from NCR. Approximately 7 million vehicles cross Delhi NCR daily. RRTS may bring down this number.
- 8 identified corridor, 3 to be developed in phase I. Sarai Kale Khan to be the intersection node for these 3 corridors.
He concluded the presentation with; TOD is an integrated part of the station area development along the RRTS corridor and is used as a tool to bring in economic benefits to the Delhi NCR region.
Mr. P.S. Uttarwar, Adviser (Planning) to the Delhi Development Authority, discussed the ongoing TOD pilot projects in Delhi to test the Delhi’s TOD policy for green field and brown field developments. The key takeaways are –
- TOD to reduce the need to travel. Discouraging the use of private vehicle by promoting high-quality, safe and affordable public transit and mixed use developments
- Master Plan should delineate Transit-oriented zone (TOZ). Mixed use development with recreational and commercial component to ensure active streets.
- 30% area within the TOZ to be residential, 20% institutional/commercial, remaining 50% to be developed based on zonal plan proposal.
- Affordable housing as a part of TOZ. 15 % housing to be rental / self-housing for the residents of TOD zone. 15% of the housing stock to be 25 sq.m. for EWS/LIG.
- TOD creates huge responsibilities on the civic administration to provide facilities for the increased densities in terms of premium FAR.
- Infrastructure demand to be calculated well in advance to ensure service delivery.
- Initiatives like FAR exclusive public space needs to be included to promote active spaces and ensure safety.
The presentation concluded with the remark that TOD is a “Think Globally, Act Locally” strategy to manage and direct growth. It puts a greater responsibility on the local administrator to provide the adequate infrastructure to the development.
The director concluded the session by putting a question for discussion to the panel that in absence of a “perfectly competitive market” how we create the environment for private sector involvement. The comments from the experts are as follows -
- Government should take care of all the necessary policy interventions to enable a smooth market for project implementation by the private sector
- When transit follows the development creates the chaos. Government should provide the transit facility than the development by the private sector should support the transit system
- Laying transit is possible only by getting some revenue from the private sector as taxation.
Session III- TOD Enablers - Institutional Coordination and Capacity Building
Director NIUA welcomed the speakers and brings forth the glimpse of learning from the previous session.
Shri Prashant Kumar (Commissioner, Ranchi Municipal Corporation) narrated his experience of enabling a State- City co-ordination for developing a TOD in Ranchi. His narrative focused on the steps undertaken in Ranchi to develop a holistic TOD supported by a state TOD policy. The key highlights were-
- The proposal of greenfield TOD in Ranchi in the Smart City Proposal- Based on TOD principles, the greenfield ABD in Ranchi was redesigned based on comments after first round of smart city challenge. To test the case, Ranchi decided to do a pilot project of improving the streetscape of a street in CBD. The pilot included reducing lane widths of motorised vehicles to provide NMT and pedestrian ways. The proposal was initially publicly ridiculed for trying to reduce the street width for motorised vehicles.
- Need to formalise TOD in the state- To formally inform all stakeholders, it was decided that a state TOD policy should be prepared. The objective of the policy was to inform that TOD is going to be the strategy for the state in coming years. Jharkhand TOD policy was hence formulated under the guidance of ITDP. The Policy is awaiting approval from the Cabinet.
- Way forward for Ranchi-
- Post approval of the TOD policy, several city acts, bylaws and rules have to be changed
- New policies such as parking policy will have to be prepared. Ranchi has prepared a parking policy based on principles of TOD. Such a regulation is now proposed to be taken up by Jharkhand state.
The narrative concluded with the comment that the greenfield TOD in Ranchi under the SCP will be the true test case of the State TOD policy and city level adoption of TOD.
Mr. Shashi Verma (Chief Technology Officer and Director, Customer Experience, Transport for London) presented the experience of Transport for London in solving transportation puzzles in London. The key highlights are-
- The role of TfL in the integration of various transport organisations under a common umbrella and the broad range of functions of TfL including the maintenance of streets.
- The importance of co-ordination between transport agencies, urban local bodies, public works department etc.
- The importance of democratic accountability such as the one shared by Mayor of London in transportation strategy for London.
- A change in attitudes to address decay of urban local bodies rather than create pseudo municipal organisations such as SPVs.
- The role of strict enforcement to manage road space as a limited space with pricing rather than chaos.
- Integrating ticketing system for convenience to encourage public transport.
The presentation ended with the mention of India's urbanisation challenge and the need to make all the investments effective by sorting out institutional factors and building institutional capabilities.
Ms. Mriganka Saxena, Founding Partner HTAU presented on scaling of institutional capacities in the context of Delhi. Some key points from the presentation are-
- In addition to the various scales at which TOD is implemented, it is necessary to look at the processes for a successful TOD.
- These five processes- creating a policy, delivering interlocking principles, ensuring multi-disciplinary stakeholder engagement, attracting investment and enabling easy planning and technical approval and creating a legacy by ensuring governance and management, were explained in the context of Delhi.
- Understanding holding capacities of TOD zones is important. Spatial development plan preparation, transport impact assessment, infrastructure capacity assessment and economic viability and implementation plan preparation are essential for creating TOD zones.
- It is important to built capacities in-house over time.
Prof. Shah put a question to the panel for discussion- do we have the capacities and leadership to enable the kind of development we discussed? What are the key three skills we should train people for this kind of development?
- Mr. Verma responded that running a city is a profession. Leaving it to civil servants who work on few year rotations basis and change departments is not the solution. A professional body is required where people grow in the environment of managing cities.
- Mr. Kumar added that a mature political leadership is also a crisis. Mr. Verma also added that citizen engagement is often seen as an irritation. It is but important to being everyone in one tent.
- Prof. Shah concluded the session with the experience quoted by Argent group (London) on engaging with citizens for the Kings Cross development, and how the credibility of engagement improves when the actual developer and not the government conducts it.
Session IV- Interaction with City administrators
Prof. Shah requested the city administrators present to share their views and experience on TOD. The highlights are-
- Capt. Pathania (Commissioner, Dharamshala) commented on the need to build in-house capacitates.
- In the urgency to execute smart cities in 5 year, SVP may be the solution.
- The municipal commissioner itself is the SPV CEO in Dharamshala to ensure that the ULB and SPV work in unison and the knowledge gained by the SPV is organically transformed to the ULB.
- The capacities in municipal administration revolve around the thinking of elected representatives, which is often poor in a technical front. An attitude change is required.
- Mr. Elias George (CEO, Kochi Smart City) shared his experience of leading the Smart City in Kochi
- Because of the legacy of council and ward led municipal governance, the budget is divided between various councils and councillors and not available for a city strategy on transportation.
- Kerala state has enabled devolving of many responsibilities to local bodies, but the urban transport is still held with state government.
- There is an immediate climate of suspicion and distrust on smart cities with the municipalities. The most important problem is to build the relationship with other political entities.
- Mr. Gajendra Singh (CEO, SPV, Jabalpur) commented that State level co-operation is required to enable city level change such as modification of Master Plan.
Mr. Shashi Verma replied to the city administrators that the challenge is to work with political representatives. The antagonism between political bodies and professional bodies is not healthy. The political representative plays a major role in consultative engagement. The question is how to construct an agenda for the politician which they can sell to people.
Prof. Shah closed the day with vote of thanks.