RIL's Navi Mumbai project may attract $75 bn investments in over 10 years

Ambani's new city is expected to be rolled out at an unprecedented scale, in the same way the RIL Group has implemented and executed projects such as the Jamnagar refinery, and Jio more recently

5 min read Last Updated : Apr 08 2019 | 6:19 AM IST

After Jio taking the telecom industry by storm, Mukesh Ambani-led Reliance Group now sees long-term promise in a new megacity. It’s working on a blueprint for setting up a megacity near Mumbai, which is expected to attract investments of up to $75 billion in the next decade.

Since the project has received approval as a special planning authority, Reliance Industries (RIL) will not only be developing the project, but also run the city administration to cut down on red tape, transaction time, and cost of the project dramatically, said a source close to the development.

The special purpose vehicle — Navi Mumbai Special Economic Zone (NMSEZ) — already owns 4,300 acres of prime land, with connectivity to the Jawaharlal Nehru Port Trust and the new airport project currently under construction in the vicinity.

On March 7 this year, RIL, through a subsidiary, entered into a memorandum of understanding (MoU) with NMSEZ to sub-lease land along with development rights by making an initial payment of Rs 2,180 crore. “This project will write a new chapter in urban infrastructure, being developed by a private sector player for the first time,” said a source directly involved with the project.

An RIL spokesperson did not respond to an email query sent on Friday. RIL had signed the MoU with the Government of Maharashtra in March to develop a global economic hub consisting of a world-class integrated digital and services industrial area with global partnerships, an RIL statement said on March 7.

“This (the project) will be the realisation of the dream of late Dhirubhai Ambani, who had the first offered to build a world-class city in Navi Mumbai in the 1980s, with direct road connectivity from South Mumbai to Navi Mumbai. The project would have been a superior version of South Mumbai and decongest Mumbai,” the source said.

In 2005, Ambani joined hands with Nikhil Gandhi, founder of SKIL Infrastructure, who planned to develop an SEZ on the lines of mega Chinese SEZs and had already acquired land since early 2000. Insiders said Tata Group was also keen to join the SEZ project, but was pipped by Ambani, who was also keen to enter the SEZ sector. In early 2018, the Maharashtra government gave permission to migrate the project into an industrial project, from an export-oriented zone.

Ambani’s close confidant Anand Jain, promoter of BSE-listed Jai Corp, was then given the task to develop India’s largest SEZ. But the project did not take off for 15 years due to lack of clarity in SEZ rules, and it was put in cold storage.

Currently, Maharashtra government-owned City and Industrial Development Corporation owns 26 per cent stake in NMSEZ, while a company promoted by Jai Corp, SKIL Group, and Ambani, through his personal investment vehicles, owns rest of the equity.

Ambani’s new city is expected to be rolled out at an unprecedented scale, in the same way the RIL Group has implemented and executed projects such as the Jamnagar refinery, and Jio more recently. “Like Jio, it would create a buzz in the country, in terms of quality and affordability,” said a source privy to the details.

In 2005, Jurong Town Corporation of the Government of Singapore, which had designed Singapore, was first roped in to design the project. A similar model will be followed by Ambani to design the project. Once finished, the city would accommodate over half a million residents and thousands of business enterprises.

“This is the single-biggest ‘projects within project’ initiative by the Reliance group, whereby every component in the project will be a project by itself,” he said.

The Maharashtra government has already given the contract to set up the Navi Mumbai sea link project connecting to South Mumbai to Larsen & Toubro and Tata Projects, while GVK-led consortium has won the contract to set up the new airport. Both these projects would help to provide connectivity to the industrial township, which would have 15 per cent of land area for residential and the rest for industrial use.

Real estate sources said the new city would compete with South Mumbai, where real estate prices had shot up to one of the world’s highest at around Rs 80,000 to Rs 1.2 lakh per square feet, but the infrastructure remains sub-standard.

“With direct road connectivity, this will also change Mumbai. It could lead to reverse migration, with prices in the new city to be lower than Mumbai,” said a real estate analyst.

Real estate analysts said a city, if developed and maintained well like Singapore, will always remain in demand. “While townships near industrial projects are well-known such as Jamshedpur and Jamnagar, for the first time a project would be launched on this scale and create a template for others to emulate,” the real estate analyst said. “This also provides an opportunity for Ambani to create a legacy,” he added.

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