Implementation challenges for transit oriented development

India is urbanising at a rapid speed with significant population migrating towards cities, and it is expected to reach 600 million by 2031. Some reports indicate c. $827 billion dollar investment in urban infrastructure in the country over the next 20 years to meet the demands of the growing urban population.

Whilst movement to urban centres is likely to result in greater production of goods and services, but it also creates congestion, pollution, and a greater demand for housing, recreation areas, public transport,health care and education. Municipal governments and ULBs are creaking under pressure to provide necessary services and adequate infrastructure.

Ministry of Urban Development, Government of India in an attempt to address some of the foregoing challenges came out with a multi-pronged policy viz., the ‘National Transit Oriented Development Policy’ (the “TOD Policy”). It is a sincere attempt by the government to provide a solution to challenges like haphazard urban growth and sprawl, mobility, rapidly rising private vehicles on roads, pollution, housing choices, et al. In some measure, it seeks to recommend transit and land use strategies, mixed-use development around public transport projects to give access to open space and transport services. However, such efforts by the government require intensive capital and a multipronged approach as “one size fits all policy”, is unlikely to work, in India. Besides being responsive, the TOD Policy needs to be address some of the legal and regulatory barriers in its implementation. Some such challenges include

Amendment of Local Laws and Time Gap between notification and successful Implementation of the TOD Policy at State Level:TOD can only translate into implementable action once incorporated in the local bye laws of the cities and states. The time gap in implementation of the TOD policy through amendments of the local laws of the cities and states may delay construction of TOD projects. There is a need to establish an agency with single-point responsibility for successful implementation.

· Availability of Land and Land Acquisition: Being a relatively new policy design measure, TOD has not been a part of city development from its inception stage.Large parcels of will need to be acquired to undertake TOD. As evident in other infrastructure projects, land acquisition delays will impact the implementation of TOD. Given this constraint, emphasis on land pooling and transferable development rights should be encouraged, whilst removing the regulatory bottlenecks to these measures, including policy reforms in foreign direct investment.

· Capacity Constraints: The current transit corridors have come up in a haphazard manner without any planned development and with the speculation of land prices around TOD by the private players. As a result, there adequate space is unavailable around existing MRTS and BRTS projects to undertake TOD. The public transportation system will have to be planned (if green-field) or suitably upgraded (if brown-field) to be capable of catering to the resultant increase in capacity.

· Price and Quality Regulations in PPP’s: Local laws and policies need to be amended to encourage use of public transport over private vehicles. Parking is generally underpriced. This acts as a deterrent to use public transit making private vehicles seem cheaper and more comfortable. Amendments have to be made to local parking policies of the cities so as to deter use of private vehicles and encourage public transport as a preferred choice.

· Multiplicity of Agencies & Lack of Common vision: Implementation of TOD would entail the involvement of various agencies for preparation of master plans, reviewing the infrastructure building regulations, provision of traffic control, adoption of financing model etc.Given the broad base of stakeholders, competing and conflicting interests, if not suitably harnessed, will undermine the success of TOD. Thus, there is a need for a robust regulatory framework with an independent body being tasked with the responsibility of implementing TOD.

· Gentrification: Average prices for homes near TOD areas may be costlier than in the areas far from such developments.The TOD in the influence zone maybe planned in a manner so as to facilitate Affordable Housing. The allocated minimum percentage for allowed FAR for Affordable Housing as per the present TOD policy should be revised.

If the above issues are tackled with proper laws and enforcement mechanisms in place, TOD may prove to be a success. Given, the complexities involved of diverse stakeholders, legacy issues and implementation challenges- from a legal and practical standpoint, there is an urgent need to have an independent statutory body or an organisation. Such an organisation, for each State and at the Federal level, should be tasked with the implementation of the TOD Policy and should be the central nodal agency being tasked with the overall development of cities and oversight over all aspects of urban planning. Lastly, such an agency body should be obligated to function on commercial principles with autonomy in decision making and ability to raise capital through innovative products.

Views expressed are personal.

Vishnu’s practice covers diverse areas of Corporate Commercial and Regulatory & Policy. He focuses on advising clients across different verticals viz, Energy (Power), Communications (Telecommunications & Broadcasting), Transport (Surface Transport including Railways & Metro systems), and Urban Infrastructure. In these verticals, he advises clients on multiple issues such as Corporate transactions (M&A), Projects, Regulatory & Restructuring, and Public Private Partnerships.

Vishnu has been practicing law for more than 10 years and has extensive experience in advising Investors, Developers, Lenders, and Governmental Agencies on Equity, Debt, Procurement, Divestment, Project development and related aspects in the Infrastructure space.