What Exactly is a Greenfield Project, & What Are its Benefits and Drawbacks?

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  • 23rd Oct 2022
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What Exactly is a Greenfield Project, & What Are its Benefits and Drawbacks?
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Here is all you need to know about a 'greenfield' project, from its essential characteristics to its advantages and downsides.

You may have heard a project labelled as a greenfield or brownfield project, but do you know what these terms mean?

On undeveloped ground or property where a building formerly stood but has since been destroyed, a new construction project may be constructed. A greenfield project is one that is carried out on undeveloped ground where there was no previous building.

What a brownfield project is contrary to a greenfield project. A brownfield project is a project on land that formerly had a building but is now abandoned or unusable.

As its name suggests, a greenfield project is constructed from the ground up, with no existing infrastructure or structures on the land. This also indicates that there were no infrastructural, industrial, or manufacturing projects, etc., in addition to the ordinary building construction. Along the Delhi-Mumbai Industrial Corridor, greenfield sites and nodes are anticipated to become accessible.

A brownfield project necessitates either the demolition or renovation of an existing structure. The National Monetisation Pipeline (NMP) for brownfield projects has been established by the government. The Government of India established NMP specifically for brownfield projects last year. This initiative tries to unleash value in brownfield sites.

Engaging the private sector in infrastructure projects, handing them income rights without ownership, and utilising the money to build infrastructure throughout the nation. According to NMP, the federal government's core asset monetisation potential during a four-year period, i.e. from FY 2022 to FY 2025, is roughly six lakh crores.

The benefits of greenfield projects

Bigger areas:

Given that greenfield properties have never been developed previously, they are often located on the fringes of big cities or in rural areas.

Thus, considerable room is provided for the development of vast urban centres. With increasing connection, these remote regions are also gaining prominence.

Flexibility:

The key benefit of a greenfield project is its flexibility, since developers may create a project from scratch that fulfils both present and future demands. In addition, nothing has to be demolished or renovated, saving money.

Self-sustaining:

A greenfield project must be constructed from scratch; hence, it is often constructed as a self-sufficient municipality. For instance, houses in such communities are often outfitted with the most advanced home automation technologies, and they also foster a feeling of community.

Independence of design:

It provides the architect an advantage or the flexibility to create from scratch. It is as if the architect were given a totally blank slate on which to sketch. Moreover, there are no limits. These are occasionally imposed by previous work in the case of brownfield developments.

No disinfection needed:

As the site is undeveloped, the developer is spared the bother of decontaminating it. Thus, both time and money are saved. In many brownfield projects, decontamination is essential because a previous factory or industrial area on the property may have polluted it with hazardous substances.

Negative aspects of greenfield projects:

The greatest downside of a greenfield project is that it typically necessitates the destruction of natural vegetation in order to construct new structures, so exploiting nature.

Regarding permits and paperwork, it is also a cumbersome legal procedure. The development of a new project on a greenfield site must start from scratch, including the application for all necessary permissions and licences. As a consequence, it might take substantially longer to finish new projects on greenfield sites, from the early permissions process to the final construction phase.

Brownfields often include basic infrastructure such as a sewage and water system, saving time and money. A greenfield project requires the construction of everything, including fundamental infrastructure. It raises the expense of development.


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