It will be premature for the 98 cities and towns shortlisted by the Ministry of Urban Development as candidates for Smart Cities to order mithais right away. Urban Development Minister Venkaiah Naidu has kept the most difficult part of the selection process to later in the year. By November 2015, his ministry will select 20 cities and towns out of this list.
True, it is not the end of the road for those which fail to make the grade, as the minister has himself pointed out. They can be selected later. Yet “the true test of this ‘Smart City’ model, in even this version, will come when the ministry has to say no and send 78 proposals from these municipalities back for reconsideration,” said Partha Mukhopadhyay, senior fellow at Centre for Policy Research.
This will be conceivably the first time in Indian development planning history where the government will publicly prune projects even if on a temporary basis as ineligible for funding. In this phase, Naidu will reject five towns for each one he approves.
For the government as Mukhopadhyay points out could, however, be a difficult step. For public authorities to be told they have not passed the grade, even if they have the options to improve, is a new challenge of governance and we will come to know if the Centre has stomach for undertaking that sort of pruning from the menu card.
There is a tremendous upside to the rigorous selection process, however.
A Smart City plan is a business plan for a municipality. Each of them has to prepare its shelf of projects accordingly in terms of delivery capacity and the financing options available. To put it in perspective, only eight cities till 2014 have issued municipal bonds for a total sum of just Rs 4,450 crore in eighteen years.
In such an infant market the cities will be quizzed very closely by the fund managers about their plans to raise finance and their chances of succeeding with those. Varanasi may have an outstanding tourism story to tell, but not all cities located out of the freight corridor zone will be so lucky. In other words, what is the special or differential story they can hold out to make investors willing to invest in their Smart City projects.
OP Agarwal, executive director, infrastructure, at the Indian School of Business, Mohali, said he is consequently concerned that the Centre is leaving too many of the decisions on the states. “The money can be handled by them but the capacity building exercise is a difficult one. Given the need to build economies of scale it should have been retained by the Centre.”
Assuming the government goes through with the exercise, let us look at the list of the cities which have been shortlisted. From the 35 million-plus cities in India as per Census 2011 figures, 27 find mention in the list. Bengaluru and Dhanbad in Jharkhand, despite being million-plus cities, have been omitted. Also while Chennai and Mumbai have made the cut, it is only two small areas of Kolkata — New Town and Bidhannagar — that are included.
Releasing the list, Naidu said Kolkata, along with eight other capital cities — Itanagar, Patna, Shimla, Bengaluru, Daman, Thiruvananthapuram, Puducherry, Gangtok and Kolkata — failed to be selected “and this goes to prove that the Smart City selection was not influenced by the stature or importance of the cities”.
What are the chances for selection into the twenty from among the 98? If one looks at the geographical spread of the cities shortlisted it is obvious that a large number of them are clustered around the freight corridors the government plans to build. The clearest evidence of this logic is the cities stretching from Ludhiana-Jalandhar belt in Punjab to Karnal and Faridabad in Haryana to the four in Rajasthan, another six in Gujarat and those straddling the shore line in Maharashtra. They are on the Delhi Mumbai Industrial Corridor belt and so it is fairly clear they stand a strong chance of making the cut.
The story for the other cities off the freight-cum-industrial-corridors is less clear. The East-West corridor for instance does not map clearly on to the list of cities selected; down south the corridor pattern is a tad clearer in the Chennai to Vishakapatnam stretch though the government has not yet spelt out its plans for this zone.
This mapping exercise is crucial for two reasons. For the towns and cities that fall on the proposed corridor, it will be easier to convince investors that they can make the cut and need to be offered support given the huge expected expansion of business in their footprint. The second is the financing aspect. As part of the smart city exercise, Naidu said, “The selected cities in the second stage of competition would be provided with Central assistance of Rs 200 crore in the first year followed by Rs 100 crore each year during the next three years”.
So even before the next round of selection gets going, the winners could have already got decided by their geography. It is somewhat like the stories of yore where the presence of a town besides a river determined the chances of whether it would flourish or not.
Cities become smarter, waste management doesn’t
* While the Centre, on Thursday, announced names of 98 cities to be developed as Smart Cities, 14 states and Union Territories comprising a chunk of those on list doesn’t even have a single waste processing and disposal facility.
* In response to a question in the Rajya Sabha in July, Minister of State for Urban Development Babul Supriyo said that as per Niti Aayog data, only 22 states/UTs out of the 36 have set up waste processing and disposal facilities.
* There are a total of 279 conventional composting, 138 vermi-composting, 172 bio-methanation, 29 refuse derived fuel (RDF) and 8 waste to energy plants across the country. The minister, however, stated that many of the plants set up are either closed or under-performing.
* Uttar Pradesh, Bihar, Karnataka are some of the major states that do not have a waste processing facility. However, of the total 98 cities that have been proposed across the country, 21 are in these three states.
* Of the total 279 conventional composting facility, almost 75 per cent are in three southern states of Tamil Nadu, Andhra Pradesh and Kerala.
* The ‘Swachh Bharat Mission’, with a target to clean the country by October 2, 2019, will cover all 4,041 statutory towns/cities as per 2011 census.
* One of the admissible components under ‘Swachh Bharat Mission’ is Solid Waste Management and the Central support will amount to 20 per cent of the project cost in the form of viability gap funding (VGF).
* The remaining funds have to be generated through private sector participation or from the state government or contribution from the urban local bodies.