Merchants not too keen to shift base to Bharat Diamond Bourse

Poor infrastructure for transportation, vastu among many reasons cited by traders

The nearly two-decade-old dream of shifting the diamond trading market from south Mumbai’s Panchratna to a new location in the Bandra-Kurla Complex (BKC) continues to remain a dream for many merchants, due to infrastructure hurdles in and around the venue.

Sixteen months after throwing open the floor to shop-owners and leaseholders in Asia’s third-largest diamond trading hub, occupancy rate at Bharat Diamond Bourse (BDB) has been a low 3.5 per cent. This is despite availability of facilities such as banks and Customs at the venue.

A bomb blast in the Opera House area, currently a hub for diamond trade, had raised hopes that the trade would start shifting to the BDB. However, that was not to be.

 

“Only 85 large diamond merchants have shifted their offices to BDB premises so far. Others are, perhaps, awaiting the success of these traders to take a final decision,” said Anoop Mehta, president, BDB.

Spread over 20 acres with a built-up area of two million square feet, BDB has eight towers, each nine-storey high, housing 2,500 offices. The complex possesses 12,000 sq ft area for the Customs department, 6,750 sq ft for clearing agents, a trading hall of over 6,200 sq ft and around 24,500 safe deposit vaults. Security measures are also on par with the global markets. Offices have been fully allotted, of which 918 are registered members of the BDB. Some offices have also been kept on rent to attract traders with diverse interests.

Small merchants are the most worried. They say infrastructure is inadequate for transporting diamonds from BDB. Transportation for labourers and office staff is another problem. “To sort out these problems, we have urged the Mumbai Metropolitan Region Development Authority (MMRDA), the body responsible for planning the development of the metropolitan area, to commence an underground railway line between the western and central lines with a station, possibly at BDB. But, no progress has been made in this direction. Let’s hope the government takes it seriously and starts exploring some solutions,” said Mehta.

Four leading banks — State Bank of India, Axis Bank, IndusInd Bank and ICICI Bank — are fully operational within the office premises. Two others, Bank of India and Andhra Bank, have also lined up plans to soon open branches at BDB.

The Customs department, the primary need of the diamond merchants, has been operational and hence, traders should not have any operational inefficiency at BDB, said Mehta.

Meanwhile, trading of rough diamonds continues to be carried out from three buildings in south Mumbai’s Opera House - Prasad Chambers, Panchratna Building and Shreeji Building.

For any trade, transition is a crucial and difficult phase.

“We spoke to the experienced people in this industry who said the transition period remained difficult during that time when trade shifted to the Panchratna and Prasad Chambers. During that time, too, large traders first shifted, followed gradually by small merchants. The same case is likely to repeat in the case of BDB. Those who apprehend shifting will surely find solace here over a period of time,” said Mehta.

According to trade sources, many small traders find vastu issues like the direction of office gates and the existence of big pillars occupying large spaces at the middle of the office as some reasons for not shifting. A small gate leading to big premises is not considered good for the success of any business, they believe.

Bharat Shah, a leading diamond merchant with interest in construction, pointed out one has to pass the Dharavi slums to reach BKC. Diamond merchants are apprehensive of the large hutments, he said.

In the south Mumbai region, diamond cutting and polishing labourers are provided with residences near the factories. In the case of BDB, accommodation for labourers is very costly, which small traders cannot afford. These are obvious hindrances, he added.

The project originally started in 1992. But disputes between the BDB committee, architects and contractors, beside payment defaults by members during the 1995-99 property slump, put the project on hold. It was restarted in 2001. The estimated construction cost of Rs 856 crore was collected from members. But, following differences among them, the project was delayed by over a decade, resulting in a 20 per cent cost overrun.

Mehta said the 85 traders who have shifted constitute 40 per cent of the city’s daily trade volume.