Smart Cities: Closer to execution, but challenges galore

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Published: January 23, 2016 12:12:48 PM

As the govt’s flagship project moves a step closer towards implementation, debates over execution challenges have gained momentum amidst calls of a closer review of the factors involved.

Many MNCs and countries have shown interest in helping some cities as the projected benefits are very high. (Illustration: C R Sasikumar)Many MNCs and countries have shown interest in helping some cities as the projected benefits are very high. (Illustration: C R Sasikumar)

Twenty cities will be selected on January 26, 2016 and become the first lot of cities on their way towards being “Smart”. The remaining 77 applicant-cities will go back to the drawing board to enhance their potential and plan better to qualify in the next phase of selection. The stakes are high as each selected city will get Rs 200 crore every year for the next five years. Rs 100 crore will be given by the Centre per year while the remaining will come from contribution by the concerned state. In all, each city will get Rs 1,000 crore in next five years for the metamorphosis.

“The larger cities have had exposure to such plans and projects. It is the smaller ones that are seeing a revolution in introspection,” says Pratap Padode, founder & director, Smart Cities Council India. “India is likely to spend $50 billion on smart cities in the next five years. Of this, a sum of $35 million has already been provided for 100 smart cities for making city development plans. Further, in 2016-17, $600 million will be spent directly by the cities by issuing request for proposals,” adds Padode.

However, according to the experts, smaller cities in the race have bigger hurdles to face, but there are solutions as well. The major area of concern is execution.


Many MNCs and countries have shown interest in helping some cities as the projected benefits are very high. A high-powered expert committee (HPEC) on investment estimates in urban infrastructure has assessed a per-capita investment cost (PCIC) of Rs 43,386 for a 20-year period. Using an average figure of 1 million people in each of the 100 smart cities, the total estimate of investment requirement for the smart city comes to Rs 7 lakh crore over 20 years (with an annual escalation of 10 per cent from 2009-10 to 2014-15). This translates into an annual requirement of Rs 35,000 crore.

Multi-layer co-ordination

The Centre has handed over the planned urbanisation to the state governments, including land acquisition. The states have to manage the funds on one hand and on the other, they may have to face opposition from local civic bodies as development of cities and provision of infrastructure and utility services etc are in the arena of the local municipality.

Time-bound process

Timely completion of any project is the key to its success. To avoid the failure, the focus should be on an easy and fast processes. This is possible only with two parameters— online and time-bound clearances at all three levels. Usually, it takes 20 to 30 years to build a city while a Smart City has only five years to shape up with available resources.

Conservation of resources

An important criteria for being smart is plugging the mindless wastage of natural resources.

“The success of such a city depends on its residents, entrepreneurs and visitors becoming actively involved in energy saving and implementation of new technologies. There are many ways to make all kinds of spaces sustainable by ways of technology, but a high percentage of the total energy use is still in the hands of end users and their behaviour,” says Anuj Puri, chairman & country head, JLL India.

There will be a need to look forward to alternative and renewable energy sources. For example, if all the bulbs and lights are replaced by LEDs, it will fetch a yearly savings of around Rs 50,000 crOre only from power segment. “This means smart governing agency, particularly the municipal bodies which will need to adapt and conform to methods and techniques that will create a whole living environment,” adds Puri.

Limitations of municipality

Most of the problems in implementation will surface at municipal level. Most Indian Urban Local Bodies (ULBs) have three constraints — lack of sufficient financial, technical capacity and talented manpower. If they go ahead with these limitations , there will be defective implementation, delayed execution, deficiency in services, compromised quality of services, defaults in maintenance, wrong investment and expenditure, faulty tariff levels, inadequate cost-recovery and eventually a failure.

Legacy of existing city

The concept of “smart” does not mean that a lot of old needs to be undone. The old needs to be integrated with the new. However, it is never easy. There could be problems of compatibility of old and new systems. So the most important thing is to identify the pain points, like what is hurting that city the most and retrofit it. For example, Varanasi is in the race of the smart city but it has its own problems of messy parking and piles of filth.

Legal Framework

The three-tier authorities with their varied powers, PPP format of project with multiple permissions, newer concept and lot of investor interest etc create a big list of stake holders in the mission. Though there is an Special Purpose Vehicle, there are chances of legal issues emerging at any stage. In the absence of a special or separate legal framework, the issues could grow out of proportion engulfing the entire process.

“A regulatory body should be set up for all utility services so that a level-playing field is made available to the private sector and tariffs are set in a manner that balances financial sustainability with quality,” Adds Padode. According to Pradip Bhattacharya, chairman of the Parliamentary Standing Committee on Home Affairs, cyber security crime will be a major challenge for Smart Cities, making it imperative to replace traditional laws with modern ones focusing on crimes related to digital information.

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