Thought Leadership: India’s Infrastructure Democracy

27 November 2014

Savvas Verdis

I have just come back from Delhi, where I attended LSE Cities’ Urban Age conference on the future of urban governance. How ready are India’s cities for the mass wave of urbanisation that is going to take place in the country? Unsurprisingly, such expansion will require big infrastructure investment in the 500 or so cities that the government is planning to expand or to create from scratch. My feeling is that this big infrastructure spending is going to concentrate power centrally, whereas there is a big opportunity to incentivise cities in what I call an ‘Infrastructure Democracy’.

First, some facts. India will need to spend over $1.2 trillion over the next 20 years, expanding its cities and building entirely new ones to house the over 250 million people that it is expecting to move into urban areas according to an influential McKinsey report. Most of these cities will lie along so-called corridors of heavy infrastructure investment. A former minister for industry told me last week that India is finally embarking on its long overdue labour-intensive industrialisation process and that the corridors will be one of the main vehicles to achieving this. The aim is to develop these corridors in an efficient and equitable way. Below are two ways that these corridors can be structured financially and legally so that the benefits are spread to all participating cities.

Pool your funds: Only last week, India launched in London its first ‘Massala Bond’ of $2 billion linking international savings to India’s infrastructure investment. Coupled with the bond market, India will be tapping into sovereign wealth funds and development bank investments. The Delhi-Mumbai corridor is tied for example to Japanese development funds. The money is there and the longer the global economy is providing low yields elsewhere, the infrastructure sector will continue to flourish. If Prime Minister Modi’s enthusiasm of a new infrastructure finance hub in Sydney announced at the G20 last week, is to go by, he will be looking for more FDI for even more corridors. My concern with this model is that it does not fully explore the great work that India has done on pooled city bonds, which is a way of bringing smaller cities together in raising necessary finance for infrastructure projects. The current model is over-centralised – with the national government doing most of the revenue generation. This may be quicker to implement but the opportunity to financially motivate the smaller cities in the corridors to make the right decisions is crucial. They need to bear the benefits or costs if these projects fail. Becoming part of a pooled bond that spreads the risk between larger and smaller cities is an incentive for team work. There is another element here. These corridors can push India’s economic policy either along the German or the English industrial model. Go down the German model, and smaller competitive cities will play a key role in the value chains of major productions centres along the corridors – think of the Mittelsdant. Go the English model and smaller cities get inundated from a London-like powerhouse. It is better for cities to do the positioning themselves rather than central government doing it for them. Being major shared debt holders for the project will incentivise good planning between these centres. Of course this will need to be balanced with the greater level of municipal debt that is going to exist in cities but this will also force them to build less white elephants.

Don’t fall in the land trap: Corridors, such as the Delhi-Mumbai link are land intensive beasts. The business as usual delivery model involves an agency such as a development corporation doing the land acquisition often by compulsory purchase order. This is easier on empty green land but more difficult on land with formal and informal tenures that is heavily politicised. All too often this results in a high level of displacement of households and businesses. Households and businesses should be given some choice here. Firstly, planners should purchase land at the periphery of project areas so that the relocation happens locally and that important social networks are not broken. If the relocation is even further away, planners need to integrate them on the new infrastructure networks. Because the corridors are being laid out now – land needs to be allocated for any resettlement along these routes and not in disconnected areas. Finally, allow households and firms to play the real estate game. Rather than simply using eminent domain, give them the option of owning a share of freehold of the corridor land. Leasehold proceeds can then flow to a larger pool of stakeholders.

The two lines of thought above are a way of redistributing both the benefits and the costs of India’s new urban corridors. Less emphasis on the central state and development corporations and more emphasis on connecting firms, households and cities through legal and financial structures so that the rewards of urbanisation are shared. These will empower Indian cities, that have long been playing catch up, but only if they are networked in these corridors effectively.

Networking cities in such a way creates a new type of regional democracy. Let’s not forget that this is exactly how democracy kick-started under Cleisthenes some 2,500 years ago. Cleisthenes, basically thought that to really create a balanced democracy he had to mix villages with different economic output together. This meant taking a village from the plains, shores and mountains of the Athens region with very different crop productivity yields to create a political entity. There were around 10 such political entities that made up the ‘Athenian people’. These entities had no administrative boundaries to avoid NIMBYism, but they had to work together for the common benefit. Infrastructure democracy can play a similar role. Here are different cities in India that will be part of a value chain heavily influenced by these corridors – some will be lower, some will be higher in that value chain. The point is to mix them in such a way that they reap the benefits fairly. Of course, one cannot plan value chains. Firms will break off from less profitable roots and seek others nationally and globally. Infrastructure democracy, tying cities from a financial and legal sense at the point of design – means that revenues will at least be flowing to lagging areas because of their original contracts. The central government started the process but it should let these corridors of cities take central responsibility for this type of redistribution to continue.

Savvas Verdis is Senior Research Fellow at LSE Cities and an Infrastructure Economist at Siemens

Twenty new Urban Age texts available online

24 November 2014

Leading and emerging urbanists from around the world contribute over 20 new texts to the Urban Age newspaper on Governing Urban Futures. Essays by Richard Sennett  on ‘Coping with Disorder’, Ananya Roy on ‘The Land Question’, Gerald Frug on ‘Who decides’ and Saskia Sassen on ‘Who owns the City?’ accompany research-based papers by Austin Zeiderman on ‘Fluid Futures’ in Colombia, Sobie Kaker on ‘Circulating Uncertainties’ in Karachi and Jonathan Silver’s investigation on ‘Wasted Infrastructures’ in Uganda, Edgar Pieterse on Johannesburg’s ‘Corridors of Freedom’ and Charles Correa’s call for greater ‘Accountability and Governance’ in Indian cities.

All these texts are available in our conference newspaper: http://delhi2014.lsecities.net/newspaper/
Download PDF (39.4 MB)
Pages from DELHI Newspaper Final-publications slider

Key statistics on Delhi from Urban Age research

20 November 2014

There are 67 cities with over 500,000 people in India; 32% of the population today live in towns and cities but only occupy 1% of the nation’s geographical surface. By contrast in Europe there are 128 cities over 500,000, where 73% or the population are urbanised occupying 3% of the continent’s surface. Sub-Saharan Africa and China have 55 and 117 cities above 500,000 and the urban populations add up to 37% and 54% respectively.

[All this data and more in our conference newspaper: http://delhi2014.lsecities.net/newspaper/]

In 2012, 700 of the world’s largest cities made up 33% of the world’s global population, but they produced more than 55% of all global economic output, according to UN projections.

Population growth rate of larger cities over the next 15 years will be disproportionately distributed across the world, with faster growing areas in parts of Africa and Asia, more modest or low growth in Latin America and parts of North America, slow or zero growth in Europe, and negative growth in parts of Japan, Eastern Europe, Russia and the Caribbean.

China and India lead will have the largest the number of megacities over 10 million people by 2030. While today Tokyo is the world’s largest city, with an agglomeration of 38 million – followed by Delhi, Shanghai and Mumbai – its population is set to shrink by about 400,000 people by 2030, while all the runners-up are set to continue growing. But amongst the larger cities, it is Dhaka, Lagos, Kinshasa and Dar es Salaam that will transform most rapidly due to extreme growth rates, many with high percentages of informal development.

By 2030 dramatic regional differences in economic output will still persist in GDP/per capita between the Global North and Global South –with the most intense growth in average GDP concentrated in China and East Asia.

Comparing Nine Global Cities (Delhi, London, Bogotá, Tokyo, Lagos, New York, Istanbul, New York and Berlin)

Of these nine cities, Lagos will be growing the most rapidly over the coming years, with an average annual population growth rate of 6.4% per year – more than three times faster than Delhi (2%) and nearly six times faster than Bogotá (1.2%). In terms of economic output, the residents of New York (US$69,556) and Tokyo (US$53,344) top the list, followed by London (US$48,077) and Berlin (US$33,253). People living in these four cities are many times wealthier, on average, than those in Bogotá or Istanbul, which in turn are significantly wealthier than the average resident of Delhi (US$3,983) or Lagos (US$1,988). At 12.3%, Berlin has the highest rate of unemployment of all nine cities (with Istanbul a close second at 11.8%), at a time where overall German unemployment has fallen to below 5% for the first time since the beginning of the last recession. Tokyo has the lowest unemployment rate at just 4.7%, twice as low as Delhi or London. However, only 15% of the residents of Tokyo are under the age of 20 (compared to 40% in Delhi and Lagos).

Voter turnout in local elections suggests stark differences in political participation. New York experienced a historically low turnout during the last elections, with only 24% of eligible voters casting their ballot. By comparison, nearly 90% of Istanbul voters turned out to vote.

Despite significant variation in the administrative structures and associated political powers of these cities, each has a democratically-elected body that acts as the legislative arm of the government. The London Assembly has the lowest number of representatives (25) while Istanbul’s Municipal Council has the highest (207). Arrangements relating to the city leadership are similarly divergent. Concerns about corruption and the concentration of political power mean that in Bogotá the mayor can only be elected for one four year term. By contrast in Delhi, London, Tokyo and Berlin, the mayor (or equivalent city leader) can in theory be re-elected an unlimited number of times.

Delhi and Bogotá face very similar densities within their built-up area (around 20,000 people/km2) and both have a similarly low amount of green space per person, yet in the case of Delhi more than half of the total land area of the city is already built-up, while for Bogotá it is less than a fifth. New York has the highest percentage of built-up land (74%), followed closely by London (71%) and Berlin (69%). Berlin and London also have the lowest average density, with Berlin being five times less dense than Delhi. London and Berlin have by far the highest amount of green space per person, with 36m2 and 39m2 respectively, with the residents of Lagos only benefitting from 0.002m2 of green space per person.

Car ownership and public transport use also vary widely. Berlin has both the lowest public transport use (26% of all trips) and highest car ownership rate (334 cars per 1,000 inhabitants). By contrast, 70% of trips in Lagos are made by bus, and it has the lowest car ownership rate of all nine cities. However, its air pollution levels are high with PM10 levels of 122μg/m3, although not as severe as Delhi’s (286μg/m3 of PM10).

Comparing Delhi’s performance across a number of indicators was compared to other global cities

Economy and population
Delhi’s projected increase in income per capita is one the largest amongst selected global cities. It’s average annual GVA growth in the metro area from 2012 to 2030 will be 7% (in London it will be 2.8%, in Lagos 6.6%, in Tokyo only 1.1%). Nonetheless, the population of the Delhi metro area over the same period will only grow by 2% a year compared to Lagos at 6.4% per year. Tokyo will actually shrink by 0.1% between 2012 and 2030.

Society
Delhi still has a high level of inequality (measured by the GINI Index – the lower the value the greater the level of social equality; the higher the value the greater the inequality). While London has an index of 0.36 and Berlin 0.29, Delhi has a relatively high figure of 0.6, yet lower than Lagos at 0.64 and many other African and Latin American cities.
Yet, Delhi has a very low level of violent crime measured by the murder rate (homicides per 100,000 people). While Bogota, like other Latin American cities, still suffers from 16.1 homicides per 100,000 people, at 5.6 New York has over double the murder rate than Delhi which stands at 2.7 homicides per 100,000 people.

Governance
While Delhi is still trying to resolve its governance arrangements, voter turnout at the last election was high at 66% of the electorate, much higher than cities like London (39%), Lagos (32%) and New York (24%), while Istanbul leads the field at 89%. Unlike London or New York, Delhi does not have a directly elected Mayor but its Legislative Assembly has 70 representatives (with a city population of 16.6 million and a metro area population of 23.3 million), while the London Assembly has 25 members representing a population of 8.1 million people and Istanbul Municipal Council has 207 representatives for a population of 14.2 million people.

Density and green space
Despite its relatively low-rise urban landscape, Delhi has an extremely high average density of built up area of 19,698 people/sq km, nearly twice the levels for wider New York metro area (which at 11,531 people/sq km includes high-rise Manhattan) and Tokyo with 11,025 people/sq km. The result of this high density is that Delhi has only 2 sq metres of green space per person. Istanbul fares even worse with 1 sq metre person while lower density London and Berlin, with front and back gardens and extensive parks, have a generous 36 sq metres and Berlin 39 sq metres respectively.

Environment and transport
Just under half of daily trips, 42%, in Delhi are made by public transport, lower than Lagos which stands at 70% and Tokyo at 67%. The cost of a bus ticket is about ten times cheaper in Delhi than it is in London, Tokyo and New York; three times cheaper than in Lagos and four times cheaper than Istanbul. Car ownership in Delhi at 131 cars per 1,000 people is less than London’s 307 and Berlin’s 334 cars per 1,000 people.

High levels of traffic congestion contribute to Delhi’s extreme pollution levels with annual mean PM10 Levels (μg/m3) of 286, which is twice the level of Lagos at 122 annual mean PM10, but over ten times Berlin, New York, London and Tokyo.

Governance compared (Delhi, London, Bogota and Tokyo)

Dehli
The National Capital Territory (NCT) of Delhi is one of India’s 29 states, with a population of 16.6 million. Its powers are closely dependent on the Indian national government. At the state level, powerful bodies like the Delhi Development Authority and the Delhi Police are centrally supervised. Executive power is exerted through the Chief Minister of Delhi, who is elected by 70 members of the Delhi Legislative Assembly. The central government appoints the Lieutenant Governor. At the local level, there are 11 districts administered through four Municipal Corporations and, partly, by the Delhi Cantonment Board. The executives within these institutions are appointed by national ministries. In 2012, a change in legislation saw the Delhi Municipal Corporation split into three separate corporations: the East, South and North Delhi Corporations, each with their own commissioner and mayor. 22% of the NCT’s budget is allocated to public transport and 13% to urban development and housing.

London
Since 2000, the eight million residents of London have been governed by a directly elected mayor and the Greater London Authority. The mayor sets the strategic framework for all of London’s 33 boroughs (including the Corporation of London) and has executive powers over a number of city-wide areas including transport (the mayor chairs Transport for London), policing, fire and emergency services, inward investment and, to a degree, regeneration and housing. Other areas like education and health are controlled by central or local government. Unlike other nations, there is no state or regional level of governance in the UK. The mayor has the largest electorate in the UK, and one of the largest in Europe, with 5.8 million voters entitled to take part in elections every four years. The 25 directly elected members of the London Assembly have the responsibility of scrutinising the Mayor’s Office. Local boroughs, made up roughly 200,000-300,000 residents, are responsible for most other services including schools, social services planning, environment and waste collection. 28 of the 33 borough leaders are indirectly elected through the borough councils, with four borough-level mayors directly elected. The lion’s share of the GLA budget is spent on transport (60%), with nearly one-third on police and security.

Bogotá
The City of Bogotá is the capital of Colombia with a population of over seven million people. It is governed by a directly elected mayor, who cannot hold office for more than one four-year term consecutively. While the city formally lies within the Department of Cundinamarca, it is administered independently from the rest of the state and has a degree of autonomy, with 45 directly elected councillors on the Bogotá City Council. Like the UK and unlike India, the power of the regional state is not dominant in city governance structures. The mayor of Bogotá has relatively strong powers across many different sectors including education, health and transport, while the 20 local administrative boards, each made up of 7-11 members, have relatively few responsibilities compared to local boroughs in other cities. The mayor’s and City Council’s direct influence over transport, health, environmental and educational policies account for the city’s ability to implement a series of successful innovations, including the Transmilenio Bus Rapid Transit system, the ciclovía network of cycle ways, and the provision of high-quality schools and libraries near the city’s most deprived communities. 26% of the city budget is allocated to education, with 17% on health and 13% on transport.

Tokyo
Tokyo is largest urban agglomeration in the world with a population of 38 million people. It is the capital of Japan (and one of its 47 prefectures) and has 13.2 million residents. Despite its size, it has developed an articulated metropolitan governance system that responds to its specific economic, environmental and social challenges, with one of the most sophisticated and efficient integrated public transport systems in the world. Given the size and economic weight of the greater Tokyo area, the directly elected Governor of Tokyo is the second most powerful figure in Japan after the Prime Minister, with an electorate of 9.6 million residents. 127 members of the Tokyo Metropolitan Assembly are directly elected. The Tokyo Metropolitan Government (TMG) administers a total of 62 municipalities which include 23 special wards, 26 cities, five towns and eight villages. Each of these 62 units has a directly elected mayor and assembly who serve office for four years. While the TMG handles broader administrative works, local municipalities are responsible for local services such as education, health and welfare. The 23 special high-density wards are home to major business activities, with different needs from the other municipalities in the prefecture. While 16% of the TMG budget goes to education, 14% to civil engineering and 14% to social welfare, it is interesting to note that 15% is allocated to special ward initiatives.

Please use this reference when quoting this data: Key statistics on Delhi from Urban Age research, developed by LSE Cities, a research centre at the London School of Economics supported by Deutsche Bank’s Alfred Herrhausen Society.

Urban Lightscapes / Social Nightscapes film and exhibition

19 November 2014

Following the success of the recent workshop on the Whitecross Estate in Islington, Configuring Light’s Urban Lightscapes / Social Nightscapes project is to be documented in a short film and an exhibition taking place at the LSE in February 2015.

Don Slater, co-founder of the Configuring Light programme said:

“Our Urban Lightscapes workshop on the Whitecross estate in Islington was exciting, exhausting and a great success for everyone involved. It showed that design based on social research and user interaction is the way forward in public lighting design – thanks to all our 25 participants, collaborators and the Whitecross residents who got behind the project and are now excited about light. A great result!”

Workshop participant Satu Streatfield, Design Associate at Speirs and Major said:

“It was an intensive, but very enjoyable workshop. You can carry out thorough historical and physical analysis of a site’s context, but until you’ve spoken to the people that live, work, pass through, or care for a place you’ll only paint half a picture. From school children walking home with their parents, city workers spilling over from Whitecross Street market, to families of three generations living on the estate – everybody had an interesting story to tell and something to contribute to our thinking.”

Whitecross resident Marianne Connolly said:

“The whole experience was brought to us by enthusiastic, energetic people with a passion for good lighting.  They took us from the reasonable, normal, standard lighting to something altogether more beautiful.  Throwing colour into the blank canvas of buildings and painting them as warm and inviting.  It was an experience I was thrilled to be able to share with my daughter, friends and community”.

LSE Cities’ MSc City Design students publish publication

4 November 2014

Reconstructing Sarajevo: negotiating socio-political complexity is an initiative by MSc City Design students Sofia Garcia and Bronwyn Kotzen (2013-14). It aims to bring together discourse from planners, academics, architects and students to converge and work towards an understanding of the link between politics, urban planning and architecture, and society in the sustainable urban development of the post-conflict and post-socialist city of Sarajevo, Bosnia-Herzegovina.

MSc City Design students visited Sarajevo from 18-23 May 2014 at the invitation of the Faculty of Architecture and the Centre for Refugee and IDP Studies (CESI), Institute for Social Science Research, University of Sarajevo, with Professor Fran Tonkiss and Dr David Madden.

This online publication, sponsored by the Ove Arup Foundation, contains contributions from MSc City Design students, Gruia Badescu and Bosnian architects and doctoral candidates Mejrema Zatric and Zulejha Zatric. It is edited by Sofia Garcia and Bronwyn Kotzen.

You can download the full publication here: http://www.lse.ac.uk/LSECities/citiesProgramme/pdf/Reconstructing-Sarajevo.pdf