GIFT, Ahmedabad – A detailed analysis!

The international award winning Gujarat International Finance Tec-City (GIFT) has been creating a buzz for quite some time now.

With various theories about its plans of development and/or getting shelved floating around, it is hard to say if Ahmedabad is going to be bestowed with this “GIFT” or not!

As evident, the GIFT project is highly ambitious… and will certainly take Gujarat to the level it is trying to reach at the global front.

But, this project showcased as a global finance centre has to overcome several hurdles to realize its ambition…

For those who are venturing into an unfamiliar territory, here is a quick brief --

GIFT;

 ü Has been showcased in various national and international events as Gujarat’s response to other global finance centers…

 ü Boasts of its tallest building, over 400m high, the so-called Diamond tower, overlooks a quiet flowing Sabarmati, and dwarfs the 125 other buildings planned around it.

 ü Looks like what it is supposed to—a city for the future; a new business hub in India; and a worthy rival to Mumbai.[Courtesy livemint.com]

With Ahmedabad already having a lot of new upcoming real estate projects in its kitty, it is feared that GIFT Ahmedabad will end up as just another incomplete real estate project too. 

A couple of years ago, Maharashtra pompously announced a similar project only to shelve it later on.

The project, which is currently witnessing the construction of two towers, is anxiously awaiting approval for its ambitious plans by the Airports Authority of India because of the high-rise’s proximity to Ahmedabad’s Sardar Vallabhbhai Patel International Airport.

If you are wondering how such similar projects have been successfully completed in fancy cities like New York or London, according to the Economics professor at IIM, Ahmedabad, the reason simply is the problem of land availability.

Of course, rampant corruption amongst our government offices where it is really really difficult to get approvals and passing(s) done is another factor one must consider.

Gujarat International Finance Tec-City (GIFT) Co. Ltd was formed in 2007 as an equal joint venture between Infrastructure Leasing and Financial Services Ltd (IL&FS) and state-owned Gujarat Urban Development Co. Ltd (GUDC).

The project was conceived to build a finance city near the state capital of Gujarat, Gandhinagar. The estimated cost was more than Rs.70, 000 crore.

Although the project sounded ambitious, and very impressive; a township spread over 25,000 acres; office buildings in 880 acres; projected revenue of $1 billion (around Rs.5, 500 crore today) by 2011; 500,000 jobs; all agreements were scrapped following the expiry of their validity six months later.

Of course, the blame game between officers and the company for the delay and financial irregularities has been going on like musical chairs with no result being derived…

Today, after all this confusion, GIFT is getting ready to stand up once again. The uncertainty is long gone and resources, apparently, are being allocated in a more organized and systematic manner…. 

Like, according to some internet reports, of the Rs.70, 000 crore cost, Rs.3, 710 crore has been allocated to core infrastructure including water bodies, river tunnels, roads and bridges; Rs.25, 000 crore to real estate; and Rs.30, 000 crore for utilities such as power generation, cooling systems and data centers. 

...Now, it is awaiting funds from investors. The Gujarat government rejected its demand for Rs.2, 000 crore as the former is not authorized to make budgetary allocations for a real estate projects.

It is said, that GIFT city will also house a financial services-based multi-services special economic zone in 250 acres. The Board of Approval (BoA) for SEZs has approved an International Financial Services Centre (IFSC) at GIFT, the first of its kind in India.

Being located in an SEZ, this will be deemed on foreign territory for export and import transactions.

This move, happening in our own Gujarat, will for the first time, enable Indian companies to raise funds for overseas acquisitions from banks and financial institutions set up in the GIFT city project.

…As for now, let’s just hope things go well for GIFT. Now this is what we call ‘development’!