The global shift from rural to urban living will be the most important demographic transformation of the 21st century. All great shifts create the opportunity for great fortunes, especially for those with audacious visions who are positioned to capitalize on them. Indian industrialist Ajit Gulabchand runs Hindustan Construction Company (HCC), which is responsible for some of the country's most iconic infrastructure projects. In what might be the single biggest bet in the history of Indian real estate, Galabchand has staked HCC's future--and his own family fortune--on a cluster of five planned cities perched along artificial fjords about four hours east of Mumbai. He calls it Lavasa.
300 million people are projected to move into India's already overcrowded cities over the next quarter-century. Lavasa is Gulabchand's US$6 billion dollar attempt to capitalize on this demographic shift--and turn a profit in the process. He even modeled Dasve, the first of Lavasa's five cities, after Portofino on the Italian Riviera. Lavasa's sales team speaks of a "stirring adventure", complete with French lessons and rock climbing, for the 300,000 residents that it hopes to attract. With Indian cities feeling increasingly like pressure cookers, Lavasa's promise of clean air, sidewalks, and personal space attracted huge invesnnents.
But the setbacks have piled up ever since the project broke ground in 2007. Settling complex legal claims over environmental abuses and villager displacement has delayed progress by years. Jilted early investors share their stories on blogs with titles like "Lavasa is the Highway to Hell."
Blueprints for the other four cities have remained on the drawing board for half a decade. And the mood at Lavasa headquarters is one of confusion. Following the lead of award-winning American economists and foreign investment houses, they are trying to solve one of the developing world's biggest challenges by creating a model for a new urban future. How could anyone object?
Understanding the skepticism surrounding Lavasa requires understanding the dueling narratives of the city. Western reporters have portrayed it as a kind of Stepford-Wives-meets-Truman-Show-in-Asia style oddity, emphasizing the sheer incongruity of replicating an upscale Mediterranean fishing village in the middle of poverty-stricken rural India. Even though Lavasa has won numerous urban planning and design awards, and drawn foreign investors like Oxford University, Manchester City Football Club, and Sir Nick Faldo, it is still hard to fit the place into old-school perceptions of what constitutes the "real" India. In Western eyes, Lavasa is as a visionary, quixotic gem doomed by ill-conceived placement and calamitous execution.
Within India, the reverse is true. Lavasa is seen as the clearest symbol yet of a new and inherently unequal urban model: one where the rich can buy their way out of the worsening pollution, corruption, and congestion that everyone else must suffer through. Clean, green, "smart" cities with drinkable tap water and 24-hour power are an unattainable dream for nearly all urban Indians.
Human rights and development activists in the nearby cities of Pune and Mumbai are fiercely opposed to the creation of a city that extracts the rich from Indian society into a European vision of prosperity.
For all the controversy surrounding its existence, Dasve is a quiet town. A smattering of Indian upper-middle class couples, university students, and city garbage collectors amble along the spotless promenade. All eight restaurants are owned and operated by Lavasa corporate partners. There are only four boutiques for shopping, which are usually closed. "No swimming" warnings ring the lake. The golf course still has not broken ground, and other big-ticket attractions are years from completion. The crowd starts dispersing from the Vegas-style water lightshow before the grand finale; few stay for the 9 PM rerun. …