How can we maximize Hyperloop’s benefits?
Policy might shape the force of arbitrage by altering the infrastructural and regulatory contexts in which Mumbai and Pune are embedded
In the first part of this series, we described the emergence of a Mumbai-Pune megalopolis on the assumption that there will be no change in Mumbai’s extant geophysical, infrastructural and regulatory constraints. In this part, we relax that assumption, describe how a Hyperloop line might force infrastructural and regulatory innovations in Mumbai, and examine the role of policy in shaping the emergent megalopolis.
Unlike other financial capitals of the world, Mumbai is not a “skyscraper city” because floor space index (FSI) regulations severely restrict vertical growth. These regulations, first formulated in 1964, were designed to decongest certain areas, but they have failed to deliver on that promise. Instead, with time, the regulations have only regressed, becoming, on the one hand, mostly uniform across the city (instead of being progressively differentiated to accommodate more building density in “downtown” areas and along transportation corridors), and, on the other, even more restrictive than before.
The road and transport system too remains underdeveloped and inadequate. As a result, congestion in Mumbai is much worse than ever before, and real estate prices remain artificially elevated owing to regulation-induced supply bottlenecks. To ameliorate these problems, urban planners have called for selective FSI relaxation but have also stressed the need for complementary reforms that use land more efficiently, expand the available land area, and improve road and transport infrastructure.
What happens if a Hyperloop line becomes operational between Mumbai and Pune? The location of new economic activity that it would enable is critically dependent on the force of arbitrage (refer to part 1 of the series), but the quantum of this force is itself critically dependent on whether or not the constraints at the Mumbai end are mutable. If these could be altered to exogenously increase the supply of real estate in Mumbai, then the force of arbitrage would be muted, and yet buyers of real estate in both cities would benefit because overall supply would increase.
Thus policymakers, in thinking about the Hyperloop line, are urged to pay special attention to the ways in which policy might shape the force of arbitrage by altering the infrastructural and regulatory contexts in which the two cities, but especially Mumbai, are embedded. Such an assessment will allow them to override Mumbai’s primary geophysical constraint (it is waterlocked), which would otherwise distribute most of the Hyperloop’s economic gains away from Mumbai and towards Pune.
What might the alterations of context entail in a concrete sense? In the domain of transport infrastructure, we conjecture that an integrated transit system incorporating multimodal connectivity is central to any effective solution for Mumbai, since it not only allows for FSI restrictions to be gradually lifted, but also provides the city’s commuters with access to other non-road alternatives (such as the Metro lines or the proposed Western Railway Elevated Corridor). The recent improvements in FSI allocation as per the new Development Plan 2034 for Mumbai, released in April 2018, are definitely a step in the right direction.
Another kind of infrastructural innovation that will significantly ease the burden of congestion in Mumbai is the addition of “new land” to its topography. The Mumbai Trans Harbour Link (MTHL) already promises to do this, but a Hyperloop line will do it better, because it will connect to Pune and its surrounding areas, all of which are already partially-developed agglomerations in their own right, whereas the land to which the MTHL will connect remains to be developed.
In thinking about policy, four key variables emerge as levers—line capacity, FSI regulations, multimodal connectivity, and fare structure. The settings for these four levers will determine the dynamics of demand and supply along the network. To bring these four elements together, a comprehensive scoping exercise similar in nature to the Comprehensive Transportation Study (CTS) conducted and published by the Mumbai Metropolitan Region Development Authority (MMRDA) may become essential. Whereas the MMRDA’s CTS is a decadal project, the Hyperloop CTS may be rolled out at higher frequencies given the rapidity with which the Mumbai-Pune megalopolis is likely to begin shaping up.
Yet, who would perform such a CTS, or effectively act on its findings? We conjecture that it will be necessary to formulate a single, autonomous entity that can effectively supervise the network’s development. This entity can then utilize available measures to tinker with the four levers. At present, these levers are either controlled at the city level or at the state level, but a Hyperloop line will necessitate an assessment at the regional level, and so we argue for the addition of a regional layer to this policymaking hierarchy. This may not be easy. The results may also not be straightforward. A significant number of statistical forecasts, pilot tests and policy experimentation will be the foundation on which such a new geo-economic phenomenon can be mapped and measured. The complexity of this project, however, is but a small cost to be set against the potential unveiling of a new mode of transport after a century of lacklustre innovation.
This is the second in a two-part series on the proposed Mumbai-Pune Hyperloop.
Tushar Kanade and Indradeep Ghosh are, respectively, CM’s fellow with the government of Maharashtra and project coordinator for the Hyperloop collaboration, and associate professor and dean (faculty) at the Meghnad Desai Academy of Economics.
Comments are welcome at firstname.lastname@example.org
Editor's Picks »
- Same-store sales growth trips at Future Retail
- Cipla Q4 FY18 results no reason to reverse stock underperformance
- Dr Reddy’s Q4: It’s a wait and watch, share price spike notwithstanding
- What SBI Q4 results say about the Indian economy and the bank
- Patanjali’s slowing growth does not mean that Colgate’s is accelerating