Discovering Dholera !

I had been hearing of this particularly Gujarati name Dholera for the past some time but it caught my attention specifically after the Budget speech by the Indian Finance Minister P Chidambaram in March 2013.

Given the adventurer I am I set out for the place within two weeks to see what it is about and whether the place can be an investment destination for me?

The Ahmedabad Rajdhani that now stops at Gurgaon, dropped me at Ahmedabad station in the morning where I got my first information feeds about Dholera. The auto and taxi guys that are generally the gatekeepers of information about a city and its surroundings were broadly clueless about Dholera. Few that knew about it, knew of it only as a village on way to Bhavnagar.

So, in a way I become the pioneer in exploring Dholera (of course apart from the policy guys and the biggie investors). And in fact when I reached there I couldn’t recognise I was in Dholera for I couldn’t see anything apart from a roadside eatery, few signboards, few huts, and a lot of land of the type where water comes in at high tides.

There were no gigantic machines, or glamorous buildings as seen in brochures and You Tube videos. And the natives in fact looked at me as if I had lost my way. In fact if you have to understand what Dholera is you will have to look at a cluster of villages/towns around it such as – Pipli, Vatanam, Bagodra, Bholad, Dhanduka etc.

Dholera SIR (Special Investment Region) which is supposed to be the new industrial hub in that region is so far just a plan on a piece of paper and so are the other components that are supposed to make the SIR a mammoth hub of economic activity.

The road to Dholera port (see picture above) didn’t even take me half way to the port and there are no signs of the approaching Delhi-Mumbai-Industrial-Corridor (DMIC) or the Dedicated Freight Corridor (DFC) yet. The long distance metro line that is also so regularly flaunted by government as well as the upcoming residential builders is still a dream. As regards the airport, I can say I have seen the grass and the trees that would possibly be uprooted to make way for the project.

But hey, isn’t that how all the big projects or upcoming new cities are supposed to be in the initial stages.

The only difference possibly is that unlike a Noida or a Gurgaon that had visible settlement in the near distance in the form of Delhi, there is no such habitation here. It is also not a Bhiwadi – neither in terms of distance from a big city nor does it have any existing industrial or economic activity apart from agriculture that could eventually drive people in. The commute from Ahmedabad to Dholera, however, will take 1.5-2 hours which is almost similar to the commute from central Delhi to Bhiwadi.

Based on my ground assessment then, here are the few pros and cons for a retail investor.

Pros:

·         The project has commitment from the Gujarat government and Narendra Modi. As mentioned above, it is also on centre’s radar. That Narendra Modi has another 4 years in power is a plus.

·          Japan is a big investor on the DMIC project around which Dholera is coming up

·          It will be one of its kind of project in India and perhaps the world where a city of this size (903 Square kilometres) will be brought up from nothing. For benchmarks, It will be twice the size of Ahmedabad and thrice the size of Lucknow.

·         As per the plan it will be an integrated, modern city that would have been planned from scratch, something akin to Chandigarh but more futuristic

·         Cheap land available –2000 to 3000 per square yard (residential)

·         Inspired by some of the best new city projects globally – Songdo (Korea), Punggol (Singapore), Iskandar (Malaysia), Tianjin City (China)

·         Concept developed and submitted by renowned urban consultant Halcrow (UK), AECOM to programme manage the development
·         Being a SIR, contigous land acquisition not a must (unlike in a SEZ) and this fast tracks the process. Low population density and non-fertile land reduces scope for resistance.

Cons:

·        No builder of national scale, or a builder that we frequently hear of in north India, is providing any projects over there. The only exception probably would be Mahindra Life Spaces but there is no information as to when this project would be launched. Existing builders claim that they have the NOC, NA (approval for Non-Agriculture use) approvals but I am still to figure out how credible these are.

·        Distance from Ahmedabad – the distance angle makes one think whether they should look at Dholera which is on extreme or should one consider a mid-way place between Ahmedabad and Dholera such as Bagodra.

·        Mainly a manufacturing hub unlike the service story of Gurgaon or the Mahindra SEZ near Jaipur. How suitable is such place from a residential perspective may need to be thought of although it is not something too uncommon in India

·        The presence of a number of high-tide areas

·        Absence of drinking water – as per plans water will come initially from the Narmada Canal and later from the upcoming Kalpasar dam

If you have any comments, I would be happy to take them as there is a lot more to be learned about this upcoming city.

There are 13 SIRs planned in Gujarat. The status of these in January 2013 was as follows:

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Updates:
July 4, 2913 - DSIRDA looking for new buyers of land forfeited from HCC, Nano Works, and Universal Success Enterprise (USE). The price will also be higher. (Business Standard)
May 29, 2013 - Interarch to invest 150cr in Dholera (Hindu BusinessLine)
May 26, 2013 - Mahindra awaits land from govt for World City at Dholera (Business Standard)
May 8, 2013 - Central Government approves assistance of 17,500 crore for 7 cities including Dholera (BS)
March 12, 2013 - AECOM wins contract to "programme manage" the development of Dholera

On-going or Up-coming projects in the region

1. Four laning of Bagodara – Bhavnagar Road under VGF Scheme of GOI (SH- 1 & SH- 36) Km. 61/400 and Bhavnagar at Km. 189/100

2. Widening & Strengthening of Sarkhej–Dholka-Vataman-Pipli-Dholera-Bhavnagar Road – Km 16/8 to 133/2 (Short Route) - SMS Infrastructure Ltd. Nagpur

3. Widening & Strengthening of Sarkhej–Dholka-Vataman-Pipli-Dholera-Bhavnagar Road – Km 133/2 to 168/2 (Short Route) - Ketan Construction Ltd. Ahmedabad
4. Township Planning 3 & 4 (out of 6) is with Sai Consulting Engineers Pvt Ltd
5. Tender for Consulting for EIA/EMP for power station floated in April 2013