Mumbai, mammon's favoured child, part of Charles II's dowry when he married Catherine of Braganza in 1662, Shanghai-wannabe, is India's commercial capital. All but 13 of the 30 firms whose stocks constitute the Bombay Stock Exchange's Sensex are based in the city. In 2004-05, corporate tax takings from Mumbai accounted for 41 per cent of the total; personal income tax revenues, 33 per cent. And, according to a McKinsey report, some 5 per cent of India's gross domestic produce comes, directly or indirectly, from the city. With India Inc. on a roll-revenues and net profits have been on an upward spiral, and, for a sample of 107 companies, went up by 19.8 per cent and 10.3 per cent respectively in the April-June quarter-and the Sensex on fire, Mumbai should have been patting itself on the back, preening, dreaming, as it lately has been of a Shanghaiesque future, or flexing its financial muscle. Instead, on July 26, the city, the thousands of companies that call it home, and its 15 million citizens all ran for cover.

Mumbai's dreams of a future like Shanghai were washed away much like this road, one of several that were damaged

It rained on July 26 (and how). It rained on July 27 (by the end of Day 2 Mumbai had seen some 944 cm of rainfall). And, just when things looked like returning to normalcy, it rained again on August 1. By August 5, 431 people had lost their lives, 28 million man-days of business had been frittered away, 1,500 flights had been cancelled, exporters were totting up losses amounting to thousands of crores, and business had suffered losses, real and notional, of over Rs 20,000 crore. Some 150,000 people, some of them India's best-known executives (think K.V. Kamath of ICICI, A.M. Naik of L&T and Sanjay Nayar of Citigroup) had their schedules thrown out of kilter; some, who called Mumbai home were stuck in Delhi and Bangalore; others, from other cities, were stuck in Mumbai with no way of getting back home (KSA Technopak's Arvind Singhal, a Delhi-based CEO, spent 17 hours in a cab and he can consider himself among the lucky ones). Of the few million who went to work on July 26, believing that it was just another wet Monsoon day in Mumbai, some spent the night in the office or their cars, and most ended up walking home, often wading through water that was neck-deep. By the end of it all, the world knew Mumbai for what it was.

Three days after, the cows were out but most shops and offices remained shut

The world? Oh, yes, the world knew what was happening in India and was concerned. Mumbai, after all, is home to the Indian arms of the 700-odd foreign institutional investors (FIIs) that have pumped in over $5 billion (Rs 22,000 crore) into the Indian stock market thus far this year. Luis Miranda, President and CEO of IDFC Private Equity, was in New York in the first week of August and faced countless questions on the Mumbai floods. "Every single meeting I go for, the first 10 minutes are spent discussing Mumbai," he says. "There are questions from (potential) investors on why the infrastructure is so bad."

The state government's reaction has been fatalist at best, with Chief Minister Vilasrao Deshmukh-he believes the damages do not go beyond Rs 501 crore-citing the volume of rainfall as an excuse. Mumbai did receive an extraordinary amount of rainfall on July 26 and 27 (944 cm in 24 hours to be exact), and not too many (actually, no) Indian cities can cope with that; yet, the problems have more to do with urban-planning and governance failures than a freak natural phenomenon. To quote from a 2001 report put out by the Indian People's Tribunal on Environment and Human Rights after it studied the feasibility of the Bandra-Worli Sea Link and the subsequent reclamation work at the Mahim Creek: "By disturbing the natural course of events and redrawing the geography of the Mahim Creek, the link has gradually upset the flow of effluents and floodwaters that drain into the Arabian Sea. Experts say that this, in turn, may cause the Mithi river, which starts upstream at Powai and runs along the Andheri Kurla Road, to back up and cause inordinate flooding along the adjacent areas."

Popular opinion goes that former Karnataka CM S.M. Krishna's Bangalore-focus resulted in his party's poor election show

That is exactly what happened. And the damages could be as high as Rs 20,000 crore. The city-based Indian Merchants Chamber has put out its estimate of losses, between Rs 8,000 crore and Rs 10,000 crore, but S.K. Saraf, Chairman, Federation of Indian Export Organisations (FIEO), believes losses to exporters alone (from loss of goods and indirect losses stemming from damaged containers and roads) would tot up to that much (Rs 10,000 crore). "The story isn't over yet," he says. "All feeder roads to Jawaharlal Nehru Port Trust are blocked and there is a 10-km long queue of trucks in Kalyan, so the damage is extending way beyond the first week."

Most people walked home on July 26 and 27, and several thousand passengers were stranded in Mumbai

Then, there are intangible losses, things whose impact cannot really be computed in Rs crore. Nicholas Piramal's research centre in Goregaon was flooded; in the process, all cancer cell lines the centre had cultivated were lost. "This puts us back by around six months," says Swati Piramal, Director, Nicholas Piramal.

Stories such as this abound, and all point to one thing. Poor urban infrastructure could well be India Inc.'s Waterloo.

Our Precarious Cities
Mumbai yesterday. Bangalore, Chennai, Delhi, and Hyderabad soon.

No city in India is fully equipped to handle a crisis of the magnitude that hit Mumbai." That's the opinion of Bikash Ranjan Bhattacharya, the mayor of Kolkata Municipal Corporation. Yet, the larger story, behind Mumbai and behind smaller crises in other cities, isn't one of ability to handle natural or man-made disasters. It is one of poor urban infrastructure and administrative apathy. On July 15, for instance, Hyderabad recorded 6 cm of rain in three hours (a minor wetting compared to what was to come in Mumbai later). The impact: most parts of the city were flooded waist-deep and the road linking hi-tech hub Madhapur and the new commercial district Somajiguda seemed more a waterway than a highway.

Commercial capital: See the wheels of commerce turn?	Coping: Falling popularity saves the city
MUMBAI: A Planner's Nightmare	KOLKATA: Saved By The Bell
Power: Peak demand 2,000 MW per day; peak supply 2,000 MW per day Water: Demand 3,900 million litres per day (MLPD); supply 2,940 MLPD. But capacity will go up by 450 MLPD with the development of Bhatsa dam Sewerage: 100 year old drains that discharge water at the rate of 25 mm/hour; the requirement is at least 50 mm per hour Tele-density: 53 per cent Vehicular population: 1.29 million (2001) Airports: Can handle 15 million passengers per year; however, the growth in the number of flights (over 500 planes land and take off from Mumbai's two airports every day) means the city desperately needs another airport Urban Planning: Most planning concerns the island city, but the suburbs have witnessed rapid growth; last development plan drafted in 1991. NGOs claim the city, with a carrying capacity (population) of 1 million was hosting 15 million For: "This kind of rain happens once in 40-50 years; but we will have to investigate what went wrong." Suresh Joshi, Commisioner, Mumbai Metropolitan Regional Development Authority, MMRDA Against: "We should halt further construction until we have a completely chalked out development plan for the city." Cyrus Guzder, Chairman, AFL	Power: Peak demand 1,300 MW per day; peak supply 1,300 MW per day Water: A demand of 1,140 MLPD and a supply of 1,140 MLPD Sewerage: A 969-km network that can discharge 2,000 MT/day; still, the rain water drainage system leaves a lot to be desired Teledensity: 17.5 per cent Vehicular population: 850,000 Airports: Can handle 2.5 million passengers a year and 100 flight movements a day; hasn't felt the pinch of growth (compared to Mumbai, Delhi, and Bangalore, flights to and from Kolkata have increased marginally) Urban Planning: There is significant growth in the residential real estate and retail industry, but West Bengal hasn't really attracted as many companies as Karnataka, Maharashtra, Delhi, and Andhra Pradesh. Still, efforts are on to decongest Kolkata by building satellites at Rajarhat and Howrah For: "In the last 10 years things have improved. Several civic amenities are now much better. Water logging is not as bad as it used to be; and roads and public transport is better." B.K. Birla, Chairman, B.K. Birla Group Against: "The roads have improved, but a lot more needs to be done on this front." Sanjiv Goenka, Vice Chairman, RPG Enterprises

The problems Mumbai faced on July 26 and 27 (and which parts of the city are still grappling with as this magazine goes to press) appear to have less to do with a freak meteorological phenomenon (a vortex over the city) than very avoidable human interventions. Thus, it wasn't traditional low-lying areas that were affected (as they are every year), but new ones such as Bandra East, Kurla, Kalina, Goregaon, parts of Santacruz and entire stretches of the Western Express highway. Most of these border the Bandra Kurla Complex (BKC, where ICICI Bank, Citibank and a clutch of others have their offices) neighbourhood; BKC has witnessed rampant development over the past few years, and several environmentalists and urban planners have cried themselves hoarse pointing out the extensive damage this has caused to the surrounding wetlands and the Mithi river that runs through them. That no one had listened is evident from the fact that July 28 was the first most of its citizens even heard the river's name. "There has been extensive destruction of mangroves (wetlands that occupy upwards of 150 acres in and around BKC and serve as a natural drainage system) illegally by builders," says Debi Goenka, Executive Trustee, Conservation Action Trust, a non-governmental organisation (NGO).

New IT hub: Ship of the desert, anyone?	The South's capital: A whole new meaning of 'dry"
HYDERABAD: A Commuter's Nightmare	CHENNAI: Parched Earth
Power: Peak demand of 1,106 MW per day that is largely being met Water: A peak demand of 900 MLPD and a peak supply of 810 MLPD Sewerage: Traditional rain water drainage network has been encroached on; the city needs to invest in both sewerage and storm water drain network. Today, the city generates an estimated 450 MLPD of sewage and only a fourth of that can be treated in the existing facilities Tele-density: 27 per cent Vehicular population: 1.5 million Airports: The city airport handles around 60 flight movements a day; a sorely-needed international airport has been in the pipeline for some time. Urban Planning: There is no zoning to speak of; development is haphazard For: "Several initiatives are in the pipeline for removing encroachments, strengthening the storm water drain infrastructure and improving the public transport system." N.V.S. Reddy, Project Director (MMTS) and Additional Commissioner, Municipal Corporation of Hyderabad Against: "On an average, commuting time in Hyderabad must have doubled in the last one year." S. Sivakumar, Chief Executive (IBD), ITC	Power: Peak demand 1,500 MW per day; peak supply 2,000 MW per day Water: Demand of 600-620 MLPD and supply of 210 MLPD Sewerage: The existing sewage and rain water discharge system dates back to the 19th century; once motorable water bodies such as Buckingham Canal, Covum River, and Adyar River have become cesspools of sewage Teledensity: 14 per cent Vehicular population: 1.6 million Airports: Together, the two terminals (international and national) handled 5.5 million passengers in 2004-05. The domestic terminal is in desperate need of an upgrade; on an average flights hover for 20 minutes before landing Urban Planning: The Chennai Metropolitan Development Authority (CMDA) has been given a wide charter, but has achieved little For: "Chennai's a great place to work. While the influx of people into the city may create problems now, they also bring many new opportunities." Joseph Sigelman, Co-CEO, Officetiger Against: "Water shortage is acute in the city. Then, Chennai's internal waterways have also not been cleaned for a long time." C.B. Rao, Deputy Managing Director, Orchid Pharma

In a city where land is scarce-the per capita space available in Mumbai is 86 sq. ft., among the lowest in the world; it is 129 sq. ft. in Delhi-a combination of the government-of-the-day's desire to maintain Mumbai's standing as India's commercial capital, increased immigration of white- and blue-collar workers looking for better prospects, and plain greed have conspired to create a situation where the only cure will require tough decisions (such as new zoning laws) of the kind no one wants to take. Worse, much of the land being auctioned off by the mills is in low-lying areas. "The mill land development in Parel is only going to lead to more and more flooding," rues Cyrus Guzder, Chairman, AFL, a logistics company. "Over the last few decades, Mumbai seems to have followed no masterplan for growth and conformed to no structured lines of development," says A.M. Naik, Chairman and Managing Director, Larsen & Toubro. "The deluge just confirmed what many of us have known all along, that the city's infrastructure has not kept pace with its expansion." The government of Maharashtra may have woken up to the problem-"The Chief Minister has said we will have to relook at all development control rules," says Umesh Chandra Sarangi, Principal Secretary to the cm's Office-but fact is, every major Indian city is, in its own unique way, unfit for business. Bangalore's infrastructure has collapsed under the pressure of rapid growth; Chennai hasn't had enough water for almost a decade now; and Delhi, which abdicated its role as the centre of industry in its part of the country to satellites Gurgaon and Noida, is now watching the two implode. "Fact is we have triple back-up for power and double back-up for telecom and we also bear the additional cost of ferrying people from and to work," says Pramod Bhasin, President and CEO, GECIS, India's largest business process outsourcing (BPO) firm, which is based in Gurgaon (Haryana), a satellite of Delhi that has almost no public transport. "All of this corrodes India's competitive advantage," he adds. That it does. For instance, Ramakrishna Karuturi who owns and runs one of India's largest floritech companies loses out on a few tens of crores every February when Bangalore's poor airport infrastructure means that he cannot meet the global Valentine's Day demand for roses. He has the flowers, but cannot send them out within 72 hours of harvesting, not unless he ships them from Bangalore to Mumbai and then out.

Fast lane: Not really, says Hoekstra	Seat of power: But roads of misery
BANGALORE: Growth Paralysis	DELHI: Capital Woes
Power: Peak demand of 1,200 MW of which some 930 MW is met Water: Demand of 930 MLPD and a supply of 800 MLPD; set to improve once Stage IV of the Cauvery Project is fully completed Sewerage: Underground sewerage, introduced in 1922, covers a large chunk of the city, but lack of maintenance is evident during monsoons Tele-density: 11 per cent Vehicular population: 2 million Airports: The city's one airport has been leased out from the defence ministry; a new international airport has been in the works for the past 17 years Urban Planning: Bangalore has the room to grow, but unplanned growth has led to chaotic development, especially in south and east Bangalore For: "Bangalore is not Karnataka. There are just seven million people in Bangalore as opposed to 55 million in Karnataka." H.D. Deve Gowda, Former Prime Minister Against: "Why is the government inviting more companies to set up base here even as it fails to provide even basic infrastructure for existing companies?" Bob Hoekstra, CEO, Philips Software	Power: Peak demand of 3,626 MW of which the city generates only 1,800 MW; peak supply of 3,626 MW met by tapping other states Water: Peak demand of 3,859 MLPD and peak supply of 3,110 MLPD Sewerage: A discharge capacity of 1,433 MLPD; however, rainfall of 35.8 mm on August 4, left many parts of the city flooded Teledensity: 65 per cent Vehicular population: 4.2 million Airports: Delhi has two airports that together handle 500 flight movements a day. The domestic airport is under some strain, but has room to grow Urban Planning: Good, despite having a host of bodies that fall under two separate governments (Delhi and Union); traffic has eased following construction of 30 overpasses on the Ring Road and the Metro Rail has made a difference. For: "We are setting up three power plants that will help meet projected 5,000 MW power demand by 2010." Haroon Yusuf, Power Minister, Delhi Against: "We have no issues with Noida where our manufacturing plant is. The problem is in the movement of traffic and poor quality of roads on the Delhi side." Ravinder Zutshi, Deputy Managing Director, Samsung India

There are other similar examples from other cities. Then, the problems they highlight-inadequate power, water, public transport; poor urban planning-are not new. However, when they threaten to bring business to a grinding halt, as the rains did in Mumbai in the last week of July, it is time for everyone, lay people, businessmen, politicians and administrators to ask themselves how things could have been different. Sadly, as the Bangalore experiment shows, corporate participation in city improvement initiatives doesn't always work (see Why Politicians Hate Cities). As Peter Mukerjea, CEO, Star TV, says in the aftermath of the Mumbai floods, "I think whatever had to be said by everyone has been said; now it is over to the administration; let them take the best of those ideas and get down to implementation."

-reported by Priya Srinivasan, Arnab Mitra, Venkatesha Babu, Supriya Shrinate,
E. Kumar Sharma and Rahul Sachitanand

Why Politicians Hate Cities
Simple, because they do not elect them.

Popular opinion goes that former Karnataka CM S.M. Krishna's Bangalore-focus resulted in his party's poor election show

See the man in the picture? His name is Somanahalli Mallaiah Krishna. He is 73, a senior leader of the Congress party that pretty much calls the shots in the United Progressive Alliance government of the country, and the governor of the state of Maharashtra. He was also, until May 2004, the Chief Minister of the southern state of Karnataka. The Congress didn't lose the general elections to the Karnataka assembly that month; it just saw the number of seats under its control decrease from 132 to 64, enough to force it to a position where it had to share power with the Janata Dal (S), led by former Prime Minister H.D. Deve Gowda. Most political analysts attributed Krishna's loss (for that was what this was seen as) to his apparent focus on Bangalore. The man had founded the Bangalore Agenda Task Force (BATF), convinced professionals such as Nandan Nilekani (the CEO of Infosys was Chairman of the task force) to be part of it, and empowered them to work with city administrators to improve the quality of urban infrastructure. The results were evident in surveys conducted by market research firm TNS that showed that most city residents believed the quality of civic utilities in Bangalore had improved (see City in Sync, Business Today, August 17, 2003). It seemed that Bangalore, and Krishna were on to a good thing, despite criticism from opposition parties that all this was being done to the exclusion of the rest of Karnataka.

Then, the elections happened, the Congress saw a dip in its performance, and people like Deve Gowda were quick to point out that they had been right all along and that Krishna's alleged city-centric focus had alienated the state's other residents. There is a school of thought that the failure of the rains the previous year had more of a role to play in the Congress' performance, than its Chief Minister's focus on the state capital, but Krishna resigned, was out in the cold for some time before being reinstated in a titular post in Maharashtra, the BATF was dismantled, and, given the parallel exit of CEO Chandrababu Naidu's government in the state of Andhra Pradesh (where, ironically, the Congress was the gainer), political pundits across the country said, "Tut-tut, look what happens if you focus on cities," and went back to their overused power to the people campaigns.

Even without the telling examples of Messrs Krishna and Naidu, politicians have little reason to worry about cities. India's 10 largest cities send, between them, a mere 28 representatives to Indian parliament's lower house (Lok Sabha, and its total strength is 545). In Karnataka, Bangalore sends just 16 representatives to the state legislature (total strength: 224). And in Maharashtra, Mumbai does 34 (total strength: 288).

Notions such as economically proportionate representation or Central rule for large cities are both anti-democratic and impractical. The real solution lies in reforms that can increase the power of municipalities, improve their finances (right now, this is at the discretion of the state government) and encourage the participation of citizens in the governance process. "In essence, reforms must move the state from its present primary role of a regulator to that of an enabler of institutions of self-government," says Sneha Palnitkar, Director, Institute for Local Self Government. Until then, India's politicians, while continuing to milk cities for funds for their parties and, in some cases, for themselves, will continue to ignore their needs.