'When we think about the future, we hope for a future of progress.That progress can take one of two forms. Horizontal or extensive progress means copying things that work - going from 1 to n. Horizontal progress is easy to imagine because we already know what it looks like. Vertical or intensive progress means, doing new things - going from 0 to 1. Vertical progress is harder to imagine because it requires doing something nobody else has ever done. Single word for horizontal progress is globalisation and single word for vertical progress is technology. - Quote from the book Zero to One, Peter Thiel

TS government continues with its mission of launching path breaking policy initiatives yet again. The Telangana Comprehensive Integrated Township Policy Rules, 2020 (TCITPR) is the perfect example of this government's long term progressive thinking with regard to the city's wholistic real estate development. In many ways this horizontal progress is much required and appreciated. It is high time to realise that Hyderabad is not just an integrated development of Hitec city and its vicinity. The city has other sides which are in crying need of a long term integrated developmental plan / policy. Hyderabad's future progress depends on how its north, east and southern parts progress on this developmental path. Hitec city has / will reach saturation in terms of growth and new potential market segments need to be developed to keep the momentum going.

TCITPR aims at making multiple integrated projects across the city to keep improving its real estate momentum. To quote the policy document 'the concept of an integrated township is based on the concept of 'Walk to Work' which provides for a balanced mix of residential / institutional / office spaces as well as commercial space along with well developed social and physical infrastructure facilities like roads, water, drainage / sewage, electricity, schools, basic health care facilities and aims at better quality of life with more green and open spaces thereby minimising the traffic requirements.'

The future development of Hyderabad has to concentrate on creating self-sufficient micro economies across all major highways. Hitec city is a complete economy on its own with overall development comprising of office, residential, retail / malls, schools, colleges, hospitals, hotels etc. This side of town you can work, live, get good medical care and is well supported by social infrastructure. Unfortunately all the other highways of Hyderabad lack this concept, resultantly we witness a huge mass of people travelling to and from all sides of Hyderabad to west for working in the IT sector. This not only puts enormous strain on the city's infrastructure but also dents its investment attractiveness. The new TCITPR aims to reduce these historical developmental disparities aiming for a more uniform approach to the city's overall development.

People staying on east / north / southern sides of the city prefer not to shift to Hitec for various reasons, plus floating population from neighbouring districts generally prefer staying along highways which give them easy access to their home towns over the weekends. The integrated township model of development along highways outside the outer ring road (ORR) seems the most logical way to creating self-sufficient micro economies all around the city.

Globally or nationally if we evaluate other cities we might witness an overall development of office / residential / retail spread more or less evenly across the cities. Developers have multiple projects across various micro markets of the same city. Hyderabad is an 'all eggs in one basket' kind of a scenario. In the post pandemic phase where 'work from home' or 'work near home / anywhere' is being sort aggressively, Hitec is bound to loose some its steam.

It would be easier now to persuade IT companies to set up a separate centre in L.B. Nagar or Uppal or Secunderabad for employees residing on that side of the city. Currently all these locations do not have any Grade A commercial complexes to offer but one might make do with the available commercial complexes. Recent announcements of IT parks being approved towards east and north sides of the city are decisions in the right direction. IT companies would be more amenable to a one hub and many spokes kind of model when it comes to handling their operations in future.

The government must be appreciated for launching this policy initiative in the post pandemic period. It is heartening that realisation has finally set in that development should not be restricted to just Hitec city making it the sole engine for the state's growth, rather development needs to be expanded to all parts of the city. This policy initiative alongwith other policy announcements like TSbPass are the right moves in the current times.

However certain aspects of the policy need practical considerations:

• Under this policy, township size envisaged is minimum of 100 acres or above, atleast 5 kms away from the nearest boundary of the ORR. This condition reminds one, of the earlier SEZ policy of 25 acres and above for setting up IT SEZ's. The biggest challenge with the SEZ policy was acquisition of 25 acres of continuous land parcel in prominent IT corridors. The government later changed this to a more practical approach defined in terms of sqft developed. For Tier 1 cities, SEZ development was modified to built-up area of 1mn sft, Tier 2 lesser than Tier 1 and Tier 3 lesser than Tier 2. Approach towards the size of a project has to be practical and time bound.
• In India acquiring land is one of the most difficult and tedious tasks any developer can undertake. Expecting continuous, unbroken and uninterrupted land 5kms from ORR is going to be a huge challenge. Since this kind of land parcels would have to be acquired from several landlords / farmers hence the task becomes even more ominous. One or two litigations can render the financial viability of the entire project haywire. Land pooling is difficult and risky.
• The cost of these land parcels is another criteria to be considered. Going by the current land quotes land acquisition could range from Rs. 500-1000cr in some parts outside ORR to theoretically even Rs. 5000cr in the western corridor. Let us presume that such projects may not be encouraged in the western corridor. Not sure how many national or international investors would be ready to sink in large sums of money for just acquiring land. Even if by some stroke of luck one were to manage a joint venture with so many landlords then also forking out 10-15% of land cost as deposit would be a huge amount. Ideally for such long gestation projects joint venture is not advisable.
• Larger investors also have restriction in terms of buying only non-agricultural land. Getting such large tracts converted to non-agricultural on the landlords cost would be a huge challenge. Another challenge would be all these large fund transactions would strictly follow a one shot cheque payment scenario post land conversion at the time of registration.
• Some of the locations that could attract these integrated projects would be Medchal, Majeedpur, Keesra-Gutta, Aushapur, Inamguda, Sheriguda, Mankhal etc. On the face of it these locations don't seem like markets which would attract large scale investments. Some of the places are either densely populated or just too far.
• 100+ acres projects might take a couple of decades to complete. Even the national developers would plan such projects in great detail before embarking on such long term capital intensive projects. The construction cost of such projects would be humongous. Might be a good idea if developer is given an opportunity to develop such large projects in smaller phases. Market conditions also need to be considered. If the market keeps going up and down every 5-10 years then such projects might also get affected.
• Not sure if similar projects have been executed in Hyderabad till date. The larger land parcels auctioned by the government in 2005-06 are still getting developed and in some cases will take many more years to complete.
• Most of the big developers are now backed by international investors / funds. The opportunity cost of locking up such large amount of money, for any organisation, is huge. Not sure how many would have the appetite for such large investments.
• In such large gestation projects the only constant would be change whether in terms of markets, developers, buyers preferences or city orientation. Always better to attempt such projects in small phases with the option of change of developer as the time passes by.
• Infrastructure development of these integrated townships even on phase wise basis would be a large investment.
• The city has a business map of sorts with IT on the west, biotech on east, aerospace on south east and pharma on the south side of the city. Mirroring these existing developments for the upcoming integrated townships could make things easier for investors.
• The government's role in attracting some key anchor companies in some of these locations wherein integrated townships will come up would be critical. Infrastructure connecting ORR directly to these hubs also would be required so that these far-flung areas can have good road connectivity to begin with.

The plan is good but a lot more detailing needs to be done to make it better and lot more involvement of the government is required apart from defining policy. A lot more involvement of the stakeholders in terms global investors, funds and national / international developers could make the implementation part more practical.

To end this on a lighter note, hope we do not fall for politicians logic or fallacy joke as depicted in the famous yesteryear's comedy serial 'Yes Minister'. This fallacy being 'We must do something - This is something - Therefore, we must do this'.

This article was printed by Times of India in their special Diwali edition on November 14, 2020.