Alex Tabarrok and Shruti Rajagopalan argue for private cities, open to all:
Gurgaon was a small town 25 years ago, but today it’s a city of some two million people filled with skyscrapers, luxury apartment towers, golf courses, five-star hotels and shopping malls. Often called “the Singapore of India,” Gurgaon is home to offices for nearly half the Fortune 500 firms.
Gurgaon, however, grew not by plan but in a fit of absence of mind. After the state of Haryana streamlined the licensing process, it left developers in Gurgaon to their own devices with little intervention from any national, state or local government. As a result, almost everything that works in Gurgaon today is private. Security, for example, is privately provided for almost all housing, shopping and technology complexes. Over all, about 35,000 private security guards protect Gurgaon, compared with just 4,000 public officers. Gurgaon also has India’s only private fire department, filling an important gap, because it must be capable of reaching Gurgaon’s tallest skyscrapers.
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But not all is well. No developer in Gurgaon was large enough to plan for citywide services for sewage, water or electricity. For a price, private companies provide these, but in inefficient ways. Sewage doesn’t flow to a central treatment plant but is often collected in trucks and then dumped on public land. Tap water is often delivered by private trucks or from illegally pumped groundwater. Reliable electricity is available 24 hours a day, but often using highly polluting diesel generators.
Compared with the rest of India, Gurgaon fares well but its functioning is far from ideal. Is there a middle ground between China’s ghost cities and the anarchy of Gurgaon? Surprisingly, privately planned cities may be an answer. And one of the oldest is in India.
Jamshedpur was founded by Tata Steel, as a company town, in 1908. It has landscaped parks, paved roads and even a lake, but it’s no playground for the rich. It’s a working town. Nevertheless, it is the only city in the state of Jharkhand with a sewage treatment plant, and it’s one of the few cities in all of India where residents enjoy reasonably priced, reliable electricity and safe tap water. In a survey by the marketing research company Nielsen, residents ranked the city among the best in India for its cheap and reliable provision of sewage, water, electricity, public sanitation and roads.
Jamshedpur works because Tata owned enough land so that it had the right incentives to plan and invest in citywide infrastructure. Tata has also had to maintain good services in order to attract workers. In Gurgaon, private developers built lots of infrastructure, but only up to the property line. By extending the property line to city-scale, the incentives to build large-scale infrastructure like sewage, water and electricity plants are also extended.