Opinion: How to rebuild Amaravati?

The dreams of thousands of ex-farmers, real estate investors, real estate developers & landowners are crushed beneath the complex web of politics, land, money, power, deception, and corruption in Amaravati, Andhra Pradesh.

By Srikanth Peddibhotla  Published on  22 Dec 2020 5:50 AM GMT
Opinion: How to rebuild Amaravati?

The Amaravati deadlock

The dreams of thousands of ex-farmers, real estate investors, real estate developers & landowners are crushed beneath the complex web of politics, land, money, power, deception, and corruption in Amaravati, Andhra Pradesh. This unprecedented deadlock between the land poolers and the Government exists for a year and there seems to be no hope of any amicable resolution in sight, now or in near future.

The grit and determination of the 27000+ households who stand united for this cause for such a sustained period of time is indeed commendable. Well, this is expected obviously because they've lost both, their major source of farm-based income and a dream of a better future for their families.

On the other hand, the Government of Andhra Pradesh has reasonable reasons to avoid putting all eggs in one basket through a centralized urban development for this young state that is largely rural with few pockets of small scale urbanization.

The Influence of digital technology on jobs and the urban development model

The exponential developments & innovations in the field of digital technology, connectivity & services experienced by humanity in the 21st century has unlocked new models of urban development that were not possible or viable in the industrial revolution era of the 20th century. The rise of megacities during the 20th century was necessary for economic growth through physical trade and commerce.

However, in the 21st century, digital payments, digital transactions & e-commerce, e-banking, video-based instant communication and the rise of the gig economy has improved the productivity of the workforce exponentially by opening up the entire world to the labor market, thereby detaching the labor markets from geographical boundaries.

The recent disruption in labor markets that adopted to work-from-home from any part of the world overnight and the mass reverse migration of white-collared knowledge workers from Bangalore and Hyderabad that lead to a to fall in residential & commercial rentals and the real estate market is a testament to the fact that the knowledge-based economies can, not only thrive, but also grow without a megacity. Digital connectivity has also enabled economies of scale in many different ways in production activities. Hence, we must consider these key indicators & change of circumstances when we choose an urban development model that is more suitable to the nature of the jobs to come in the 21st century.

Instead of a centralized mega-city, decentralized & distributed pockets of integrated rurban (rural + urban) developments in the form of clusters of micro-cities is most suited for 21st-century economies powered by a digital infrastructure. Such an urban development model will also bridge the urban-rural divide by creating a symbiotic relationship between the two, bring consumers and producers of food close to each other, optimize the food supply infrastructure and also pave a way for sustainable and climate friendly urbanization. Andhra Pradesh is in a perfect position to be a pioneer in leading climate action through building sustainable and climate-friendly micro-cities of the future.

Xprize style private city building competition - a solution to Amaravati.

The current situation is that the Government neither has the funds, nor the priority to fulfill the promise of the grand vision of Amaravati to the landowners.

A potential solution to this problem can be to enable the land poolers to build a private autonomous city by allowing them to create a private trust of the land bank with all the land poolers as members of the trust. They can then democratically elect the trust management to decide the future plans for that land.

Based on the proportion of their land pooled, each land pooler will be allocated equity shares of the trust (if legally possible) or of a separately incorporated private company. This private company can lease the land from the trust for 100 years and play the role of city planner & manager. The government must also return all the land as-is to this trust, and allow them to hire private consultants of their choice to help them build a private city like Sri City, with the help of developer partners. The profits from land development are shared by all land poolers as dividends.

Rather than funded by the exchequer, a privately funded city that is decoupled from the politics and priorities of a fixed-term government has a higher probability of seeing some success. Private cities with self-governing authority (like IALA) will have the flexibility to innovate in the areas of urban planning & development without being restricted by the clutches of taxpayer money. I am very confident that a pooled land with an innovative master plan approved by the government will easily attract both domestic and international investors. The government must at least allow them to decide & shape their own fate with their own hands, intellect, capital, and hard work.

In order to give equal opportunity to the rest of Andhra and to encourage decentralized urban development, the government can come up with a new & disruptive urban development framework of a statewide open private city building competition, similar to Xprize, that calls for landowners to pool their land to the extent of 9 to 10 sq km to develop a private micro-city. The competition can award milestone-based grants to these private city initiatives to partially fund master plan development and some seed infrastructure like public schools & hospitals. The major role and responsibility of the government should be to approve the master plans of 3 or 4 participants by the end of its term, so that they are all set on a self-driven development path irrespective of which party is elected in the next term. This will instill unshakeable confidence in the landowners, real estate developers, and investors by decoupling a multi-decade capital intensive real estate project from a fixed term of the government and thus mitigate the risk of failure due to defunding.

This initiative will help the Government to not only resolve the Amaravati deadlock, but also give an equal opportunity to every other district or region in Andhra to script their urban growth story and decide for their own future. Moreover, this also aligns with the urban development strategy proposed by current Chief Minister of AP, Shri Jagan Reddy about "concept cities" that are 10 sq km in size.

Rebuild Amaravati

Historically, even though the location of the capital of the state has played a crucial role in urban development in India there are sufficient examples of non-capital cities that have done quite well.

The land poolers of Amaravati must not lose hope, and instead, use this threat as an opportunity to unite their resources (labor and capital) and build a better city than what the government could have done. There are 27000 farming households that can provide skilled and unskilled labor. They, with the help of their NRI kids, well-wishers & friends who are influential in their own fraternity in the US/UK, can take on this challenge to plan & build the city together, attract private investments, promote the city as the future urban destination that provides an awesome urban experience and hire the best talent to deliver world-class civic services.

Frankly, there is really no good example of any megacity in India where the government-led urban planning & development has resulted in a world-class infrastructure or eliminated the common recurring problems like traffic, water & waste management issues, etc, as compared to the private cities like Sri City, Lavasa, Magarpatta City, Palava City, Jamshedpur, etc. The quality of real estate infrastructure and amenities built by private money has always proven to be far better than those built by public money. Take the example of airports built by AAI vs. private Greenfield airports. In fact, the railways also want to privatize the stations, because they know that privatization leads to a better quality outcome. I fail to find a single example where the government was able to provide a better service than the private in areas of banking, telecom, hospitality, education & healthcare. We must abandon this illusory belief that the Government machinery has the capacity to build a world-class Greenfield city, which is perhaps a thousand time more complex than these other industries.

Amaravati must aspire to become the best city in India, and the historical data & facts indicate that there is very little hope that public machinery has the capability, motivation & capacity to deliver that. Additionally, as we have experienced, it will be very difficult for any the government in the future to politically justify such big-ticket investments of taxpayers' money for a single project that appears to benefit a few landowners of one region.

Moreover, not having a full capital in Amaravati can actually, turn out to be beneficial in the long run because of less influence of the politicians on the development and future of the city. Private corporations, investors, land poolers, and infra and real estate builders who have a stake in the city development would have better control over the charter and the destiny of the city than being influenced by petty politics and vested political interests. If I was an investor or a land pooler I would have jumped with joy on learning that the project is now going to be less influenced by bureaucrats, politics and political leaders. The idea of taking charge of the city development privately rather than depending on taxpayer money and politics seems to be a better strategy, a better plan, and a better opportunity.

Amaravati may or may not be the political capital of AP, but it can surely become economically rich, technologically innovative, and environmentally sustainable & climate-friendly capital of India and the world, but only if this people's city is built by the people itself using their own resources, and not by any government through taxpayers' money.

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