The paradox of the situation is that despite sitting on such massive money resources, Mumbai is unable to generate funds to finance its most essential requirements
According to a report by Jones Lang LaSalle, Mumbai’s realty and infrastructure situation now needs a serious boost. The city has invested Rs 275 billion in land since 2005, and the city needs a similar amount of in within five years to only complete the infrastructure projects that are underway.
“The city of Mumbai needs additional investments of about Rs275 billion in the infrastructure sector over the next five years if these projects are to be completed on schedule. This is equal to the amount that the city has buried in its land. The paradox of the situation is that despite sitting on such massive money resources, Mumbai is unable to generate funds to finance its most essential requirements. This would be an apt time for the authorities and policy makers to focus on breaking this deadlock,” says Subhankar Mitra, head-strategic consulting (West) Jones Lang LaSalle India.
He also says that most of the investments in land, particularly in South Mumbai, have actually remained non-yielding. Incidentally, South Mumbai is the area where maximum investments were made. Investors have not been able to fully monetize their investments and the end users have faced spiralling price rises despite economic slowdowns. Add to that, with the change in DCR (Development Control Rules), both the builders and customers have been left in the limbo.
In 2005, when FDI in real estate was enabled, Mumbai saw many high profile land deals and since then, many projects have been launched. Apart from the recorded transactions amounting to Rs 276 billion; there are unaccounted investments made in slum rehabilitation and redevelopment projects—which can amount to another Rs100 billion. 2008 saw an exemplary rise in investments in South Mumbai, says the report.
However, the city has managed to launch 2.5 lakh of residential units in the last five years—and all of them are yet to be completed. The report says that quantum of investments in mega infrastructure projects amounts to only 60% of the investments made in prime land in the city, approximately in the same period.
In other words, Mumbai needs to beef up its infrastructure, and fast. But the realty situation does not look very bright either. Sky-high prices are putting off buyers, and the developers are also confused with the new DCR. The proposed hike in stamp duty of leave-license agreements will also dampen the spirit of those who want to rent an apartment. Read Maharashtra Stamp duty hike: “Neither can you afford to own a home, nor take it on rent”
Pankaj Kapoor, MD, Liases Foras, however, finds it surprising that such a huge amount has been invested in land; because the RBI (Reserve Bank of India) does not allow foreign direct investment (FDI) in buying land. “What this money has done is that it has created speculation; and has created unproductive land values. If you check builders’ balance sheets, they are burdened with debt”, he said. “Residential realty does not really need money—and no amount of money will solve the problem. It needs sales; but the prices are too high. Instead of getting more money, builders should make housing affordable,” Mr Kapoor said. As of December, more than one lakh housing units remain unsold in Mumbai.
The cumulative sales of Honda Siel Cars during the FY’12 fiscal stood at 54,427 units against 59,463 units sold in the preceding fiscal
Car-maker Honda Siel Cars India (HSCI) reported three-fold jump in its sales for March at 11,016 units.
The company, which is a joint venture between Japanese auto major Honda and the Siel Group, had sold 3,576 units in the same month last year, HSCI said in a statement.
“Our sales performance in the month of March has been very impressive and is a testimony to our customer’s trust and confidence in our product and services,” HSCI senior vice-president (sales and marketing) Jnaneswar Sen said.
The Brio and the new City have received a good response from the market and the company is positive that the growth momentum will continue in the coming months with increased demand for all its products, he added.
The cumulative sales of the company during the FY’12 fiscal stood at 54,427 units against 59,463 units sold in the preceding fiscal.
“Owing to the Tsunami in Japan and floods in Thailand, Honda Siel Cars India was going through production cut at its Greater Noida plant during the year 2011,” the company said.
The trip to the communist bloc nation was uneventful, except for securing the order at “good prices”. The 15th part of a series describing the unknown triumphs and travails of doing international business in Asia in the seventies and eighties
After our return from Iraq, I was still under a pile of telexes from our clients, not only from Saudi Arabia, but from others relating to our trip to Baghdad via Kuwait. Messages from sites in Iraq were also coming in through their offices in Kuwait, which were coordinating the supplies. The intermittent war was on; it could not be considered a full-scale assault by both sides, but skirmishes were going on unabated.
Of course, a great deal had already been handled by Marge, but a personal touch along with phone calls from me made a lot of difference to our buyers. In fact two of them had come down to Dubai and spoken to me about some immediate supplies and Khoury took care of that. Then, of course, these guys never left the room or called us, until they left a few days later. Apparently, they had a bulging and overstuffed fridge in the room and all the movies to see.
I had just returned from my lunch at about four and was clarifying some issues on the shipping documents we had just received from the bank, when Ajay walked into my office, with a young man. Dada, “Meet Satish, he came last night from Delhi. He exports items like fish meal and other non-building materials and Lalaji has sent him to us for any assistance that he may need. Can you give him general advice about Europe and London, as you have been there, many times before?” With that introduction, he was gone.
We had a general chat, when Satish raised the issue of dealing with the Communist bloc? Except for Yugoslavia, which I had covered extensively, my visit included visit to Bucharest, and actually getting Rumanian supplies. I could not really gauge what was working in this young man’s mind, or what was Ajay’s intention.
It came clear an hour later when Ajay requested that I take care of a short visit to Europe, covering London, Rome and spend a week in Albania for negotiating some business for which Satish had carried out some exchange with the authorities. We left for Rome the next day.
There was not much to do, except walking around and tossing the coins at the Fountain; we came to know that there were a bunch of guys who were actually guarding and collecting (scooping would be the right word?) these coins. Our visit to the Albanian embassy was short as there were no ‘foreigners’, except us and the official not only gave us nice cup of tea, who was very cordial. There were only two flights a week and we were on the flight to Tirana the next day, arriving from Rome in the afternoon.
I think it was not a modern jet as we know, but one with propellers! All the passengers were Albanians, and we were the only ‘foreigners’, seated right in the front. I think an hour later, we landed in Tirana.
The front door was opened, and the landing steps were set in place, but armed guards, some six of them I think, stood, three on each side as though they were giving a guard of honour salute!
Right from the steps, someone met us and beckoned us to follow him, since we did not understand what he said. At the immigration desk, our passports were taken and led by this greeter, we moved on to “Health & Sanitation” section, where we saw what looked like a doctor and nurse, because they had very similar medical uniforms. Saying something, the nurse opened her palm, showing signs that I do the same, and on that she dropped a couple of white tablets, and asked me to swallow (by sign of course!). This was too much; I was not willing to take any tablet in an alien country, not knowing the reason and no understandable language. But, they reacted to my “No” and I asked for someone “speak English”.
Meanwhile, rest of the passengers had come down, each of whom was given the tablets, without water, and they simply swallowed, and moved on.
It took, perhaps, another 30-40 minutes before someone came to our rescue and explained that the tablets were actually ‘quinine’ tablets, specifically meant for preventing us falling sick, as there was mosquito menace. Someone else came along and opened, what looked like a bottle of soda, with which both of us had no choice but to take this tablets. Malaria was an epidemic here.
When we came out, our baggages were the only ones unclaimed, and our greeter and his driver took us to the waiting coach/van that took us to the centre of the town.
We were assigned two rooms, which were small, but neat, and the greeter went away; but the receptionist told us that next morning, someone will come and fetch us for taking to the office.
Early morning we were given the choice of extremely strong coffee or very light tea; fortunately, Satish had bought a few eatables and we moved on to our meetings. The first couple of days were simply spent on negotiating and finalizing his “fish meal” business and he claimed that he booked the order at “good prices”; but our contact could not provide me with a list of items that they could ‘sell’ or export to us, and confirmed that she would arrange for someone to get in touch with us.
My presence, perhaps, helped in getting the L/C details sorted out and suitable protection made for any untoward delays in shipments, because the buyer was going to ‘nominate’ vessels to pick the goods.
As for what they wanted to ‘buy; again, we were advised that another person would contact us. By noon or sometime around one o' clock our meetings were over and we simply walked back to the hotel, as it was located very near the government offices. Our lunch and dinners were simply carried out by sign languages or one of us making the sounds of a goat/sheep to indicate that we Hindus from India do not eat ‘moo’ sound making animals!! It was funny.
In the afternoon, we had naps, the TV hardly worked in the reception; and when it did, it was what looked like government propaganda.
It must be recalled, in passing, that we were in the land of the unbelievers; Enver Hoxha, the president (ruler, whatever one might call him) was the sole giver of the bread. There was no God in that country; it was, I believe, a totalitarian atheist state and anyone showing signs of faith of any kind was in serious trouble with the law.
As we had nothing to do, we decided to walk to the centre point where there was a statue of Enver Hoxha; I think five or six roads converged on this point, and so we assumed it was the important centre. We would then take a walk, may be a mile or two at best, and walk back. Once or twice, on each walk we tried to smile and greet the local Albanians; they were scared and hurried away from us. If they were standing or sitting outside their homes, or on the
Side-walk, when they saw us they would go inside, and keep peeping at us or even keep the door ajar; but they wouldn’t speak to us.
To be honest, except for the fish meal, the whole trip was a waste of money, as we could neither get items to buy or to sell, and to my mind, the whole thing was engineered to procure the fish meal biz.
A day before our flight was due; we simply went back to the Italian embassy in Tirana, the only foreign embassy there, to get our visa back to Italy. The Counsel met us, cordially exchanged greetings and even offered us a wonderful cup of real coffee. He was keen to know why we Indians came there and what was the business about? We simply told him that we have come to investigate the possibilities for bilateral trade or even barter but unfortunately, there was not much Albania could offer, and said; most of their requirements were coming from Italy or China. I knew, China had a greater political influence on Albania than Russia (USSR) and even the latter was finding it difficult to influence the country.
From Rome, we returned back to London; Satish had his own plans to visit some of his friends there. We separated and I moved on to Belgium to look up some steel suppliers before flying back to Dubai, and feel free all over again. I felt very sad that Albanian were in such a mess due to the political system they were following. There was no way, Dubai businessmen could do any business in Albania, as everything there was government controlled.
(AK Ramdas has worked with export organisations, initially in India. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts. From being the advisor to exporters, he took over the mantle of a trader, travelled far and wide, and switched over to setting up garment factories and then worked in the US. He can be contacted at firstname.lastname@example.org)
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