Real Estate Mumbai
AP to Adopt Mumbai's Urban Development Model for Vizag 2.0
2026-01-14 · Geosquare
The NITI Aayog, under the Vizag Growth Hub initiative, has proposed the development of a Bay City between Kailasagiri and Bheemili, along with Vizag 2.0, which extends up to the upcoming Bhogapuram airport and the aerocity project around the greenfield airport. To take this initiative forward, a team of officials from Andhra Pradesh, primarily from the Visakhapatnam Metropolitan Region Development Authority (VMRDA), led by municipal administration and urban development principal secretary S Suresh Kumar, visited Mumbai on January 12 and 13 to study similar urban development models.
A key focus of the visit was to understand how the City and Industrial Development Corporation of Maharashtra Ltd (CIDCO) and the Mumbai Metropolitan Region Development Authority (MMRDA) function as financially self-sustaining development institutions. CIDCO's Navi Mumbai and NAINA (Navi Mumbai Airport Influence Notified Area) models were studied as benchmarks for the proposed Bhogapuram aerocity and Vizag 2.0 projects.
VMRDA officials noted that the Maharashtra government has allocated large tracts of land to regional development authorities, allowing them to monetize land, floor space index (FSI), and development rights to generate steady revenues for infrastructure development and urban growth. CIDCO currently operates with an annual budget of about Rs 14,000 crore, largely funded through land and real-estate-based revenues. MMRDA, meanwhile, finances metro lines, transit-oriented development (TOD) corridors, and regional infrastructure through FSI premiums, land monetization, impact fees, and stamp-duty-linked surcharges.
NITI Aayog recently released a report titled ‘Developing Visakhapatnam Economic Region as a Global Economic Hub,' covering nine districts from Srikakulam to Konaseema. Visakhapatnam Economic Region (VER) has been selected under NITI Aayog's national growth hub initiative. Building on the learnings from Mumbai, Andhra Pradesh is now finalizing two major reforms: a land value capture and land monetization policy, including sub-policies for planned industrial and service city development, and a new slum rehabilitation and cluster redevelopment policy.
MA&UD principal secretary S Suresh Kumar stated that Maharashtra's approach, such as empowering MMRDA and CIDCO, monetizing government land, using FSI and transit-oriented corridors to fund metro rail and housing, and creating global business districts like BKC (Bandra-Kurla Complex), will directly guide Andhra Pradesh's efforts to develop the Visakhapatnam Economic Region, Bay City, TOD corridors, and new growth hubs.
VMRDA metropolitan commissioner Tej Bharath highlighted that the Mumbai model demonstrates how a regional authority can turn land into long-term economic engines. 'Visakhapatnam Economic Region is now being designed on similar principles—master-planned growth centers, TOD-linked densification, brownfield redevelopment, and land-based financing—so that Vizag becomes a self-sustaining metropolitan economy rather than a grant-dependent city,' he said.
The delegation was also introduced to Mumbai's advanced urban revenue framework, which includes FSI and additional FSI premiums, property tax on incremental built-up area, stamp-duty surcharges, development charges on land and buildings, and premiums on metro-proximate properties.
Vizag 2.0 is envisioned as a modern, mixed-use, services-led metropolis, spanning 40-50km in length from Visakhapatnam port in the south to Bhogapuram airport in the north, and 4-5 km in width, covering an area of about 200-250 sq km. Vizag Bay City has been proposed as a 40 sq km integrated coastal hub, aiming to transform a 25km stretch of coastline between Kailasagiri and Bheemili into a vibrant, mixed-use waterfront city. Vizag 2.0 will integrate most of the job-creating service hubs, including IT and data center hubs at Madhurawada, Kapuluppada, and Anandapuram; Bhogapuram Aerocity; the education, skilling, and innovation hub proposed near IIM Visakhapatnam; and a major entertainment complex. While Vizag Bay City is targeted for development over the next 5 to 7 years (by FY32), Vizag 2.0 is planned as a multi-decade metropolitan project extending up to FY47.