COVID-19 lockdown: Smart city projects worth Rs 1 lakh crore halted

May 4, 2020 1:45 PM

Smart city projects worth close to Rs 1 lakh crore have come to a halt due to the lockdown, rendering tens of thousands of workers jobless and causing large-scale damage of building materials, which could significantly escalate project costs.

Even before the lockdown, most projects under the government’s flagship Smart City Mission were running behind schedule.

By Nivedita Mukherjee

Smart city projects worth close to Rs 1 lakh crore have come to a halt due to the lockdown, rendering tens of thousands of workers jobless and causing large-scale damage of building materials, which could significantly escalate project costs, according to official sources.

Even before the lockdown, most projects under the government’s flagship Smart City Mission were running behind schedule, with the 2019-20 deadline for completing as many as 5,151 projects worth over Rs 2 lakh crore having been widely missed. The sources cited above said 2023-end now seems to be the earliest date for completing the mission, and any more deferment in easing/lifting the lockdown could further delay projects.

An official said, “We aren’t sure how many contractors and how many labourers will come back (after the lockdown is lifted). Projects related to roads and rain preparedness need to be prioritised now because they have to happen before the monsoon sets in.”

As per the original plan, the Smart City Mission, launched in June 2015, was to transform 100 cities, including 19 state capitals and 44 tourism-oriented cities, over five years – between 2015-16 and 2019-20.

These projects required a total investment of Rs 2,05,018 crore, to be precise. The mission is being operated as a centrally-sponsored scheme, with the Centre contributing Rs 48,000 crore over five years and the states making almost a matching outlay. Of the remaining project costs, Rs 42,000 was to be financed through convergence, that is other schemes of the Centre and state governments like Swatch Bharat which is implemented in these cities, Rs 41,000 leveraged by public-private partnerships, close to Rs 10,000 crore by loans, Rs 2,600 crore from urban local bodies’ own resources and about Rs 16,000 crore by other means, including borrowings from multilateral institutions.

According to sources from the Ministry of Urban Development, only 1,582 projects costing Rs. 26,550 crore, (just 13% of the total projects) have been completed so far. While projects worth Rs 41,000 crore are in tendering or early stages, Rs 96,370 were under implementation, when the lockdown hit them.

As of March 31, 2020, the Centre disbursed Rs 19,552 crore of its total share of Rs 48,000 crore and work orders worth Rs 1,22,835 crore were issued. Among the projects running behind schedule are smart roads where 151 projects worth Rs 2,353 crore have been completed while 296 projects worth over Rs 12,825 crore are under implementation. In the area of smart solar projects, 41 projects with a cost of Rs 216 crore have been completed while 40 others with cost of Rs 708 crore are being implemented.

As for smart wastewater projects, 36 have been completed at a cost of Rs 1,380 crore while 104 with Rs 10,986 crore are being implemented. In the area of public-private partnership, 88 projects worth Rs 3,675 crore have been completed while 102 projects with cost of Rs 12,331 crore are under implementation.

Even before the lockdown, several projects had been plagued by lack of substantial progress. Officials attribute this to varying capacities of different state governments in undertaking the Smart City projects. While Ahmedabad, Agra, Surat, Indore and Kanpur are the top five cities to have executed most of the projects, he projects are running behind schedule in West Bengal, Meghalaya, Andaman & Nicobar Islands, Lakshadweep and Arunachal Pradesh.

According to Kunal Kumar, mission director and joint director, Ministry of Housing and Urban Affairs, as all 100 smart cities were selected in four rounds conducted successively over 3 years from January 2016 to June 2018, they have five years for fulfilling the smart targets from the time of selection. “As all cities complete five years by 2023, all the 5,151 projects would be brought to fruition,” assures Kumar.

Becoming smart cities is a work in progress,” explains Kumar, who has been associated with the mission since 2015. “Cities have to form their special purpose vehicles, sketch the projects in detail and then bid them out. This kind of preparatory work takes 12-18 months. Then there are projects which had not been undertaken in the urban domain before, like Integrated Command and Control Centres (ICCCs), designing of complete streets with walkability and cycle tracks and use of mobile applications for a lot of things.

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