How Maximum City got its mojo back
Jul 16 2014 , Mumbai
If an industry estimate is to be believed, the latest projects — Eastern Freeway, Santacruz-Chembur Link Road and the upcoming Sion Panvel Expressways — are expected to save commuters more than Rs 1,000 crore in travel costs and that does not include savings from the Mono and the Metro rail — besides economising on precious time.
The impact on real estate projects in the region is also expected to grow by more than seven to eight times of the infrastructure spend. Areas around the Eastern Freeway, Naina and trans-Panvel region, along with the new international airport, are likely to see positive impact because of these road projects.
According to Abhilesh Babel, chief executive officer, realty and social infra at Feedback Infrastructure, more than the total savings of an estimated Rs 1,000 crore, it is the social impact of these projects on real estate and related infrastructure, which in the case of Mumbai is even higher than seven times of the total spend. “The Naina and trans-Panvel region where more than 80 to 100 million sq ft of real estate projects are coming up would see a positive impact on their valuations. Even the international airport on the expressway would be impacted,” he said.
“In my opinion, it is a better option to upgrade an existing road into an expressway like the 23-km-long Sion Panvel highway rather than building a trans-harbour link in Mumbai which would cost ten times more to carry the same amount of cargo,” said Babel.
Mumbai’s transformation of infrastructure landscape comes from the commissioning of some crucial projects such as 16.8 km long Mumbai Eastern Freeway, a 6.45 km long Santacruz-Chembur link road, a 3.5 km Sahar elevated road that connects the western express highway to the newly-built Terminal 2 at the Mumbai Airport and the upcoming 23 Sion-Panvel highway which would be operational in two months time. The good news is that for the first time, the focus is on connecting east and west Mumbai rather than the north and south traffic flow.
According to one estimate, the New Metro 1 is already fetching more than one lakh commuters from Versova-Ghatkopar, which focuses on traffic flow from east to west. The Mumbai Metro would be a 146-km network in three phases of which the first phase is operational.
Sanjay Ubale, MD of Tata Realty and Infrastructure, said there is every possibility of improving this infrastructure further provided the government provides commitment of toll collection within the city regions. “We have seen how toll collection gets impacted due to hurdles created by motivated parties. Even if the government provides commitment to give us returns on annuity basis, it would be a welcome move. The savings can be even higher if the projects are put on toll collection basis, the return to the investors would be proportionate to the toll collection as it would improve the overall travel experience,” he said.
PwC’s Manish Agarwal, said with the improvement in infrastructure, related social infrastructure around the projects would also start to look up. In case of the Delhi Metro, areas around 500 metres of the station had real estate prices going up three times more than areas away from the station. In case of Mumbai this difference is in the range of around 6-7 times of the total spend on the infrastructure. “Given the increase in traffic and the number of people traveling in Mumbai, the savings from toll roads and freeways would be higher than Rs 1,000 crore in a year,” he said.