The govt must have a clear plan to make them economically viable for those who want to invest
The metamorphosis of cities across the world in the last few decades and the steady migration of population from rural to urban areas is causing governments and urban planners to design smart cities. According to the UN Habitat report, by 2050, more than 75% of world’s population will be living in cities. It is important to make these cities more liveable, inclusive and caring for its dwellers.
India’s pace of urbanisation has led to migration in volumes that its cities may not be able to sustain. Census 2011 estimates that 31% of the population lives in cities and contributes over 63% to the GDP. By 2030, urban population is could shoot up to over 40% of the total and its contribution to the GDP will reach 75%!
The Smart Cities Mission (SCM), the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and the Housing for All scheme were launched by the government as it realised the need for sustainable cities if inclusive development was to be guaranteed.
The SCM and AMRUT would see building of 100 smart cities and the rejuvenation of 500 cities having a population of over 1 lakh. Together, they have been sanctioned R98,000 crore, to be spent over the next five years.
A smart city provides adequate water and assured electricity supply, sanitation (including solid waste management), extensive public transport network, affordable housing, health and education, digital governance and security. While existing cities can be retrofitted—slums could be converted into affordable housing—the government is also looking at green-field development near cities.
Even though prime minister Narendra Modi had outlined such a vision when he was the chief minister of Gujarat, via the Gujarat International Finance Tec-City (GIFT), creation of a smart city requires a high degree of diligence and is, indeed, a painstaking process. Only in the last couple of years has GIFT started attracting corporate interest and construction activity has picked up. This indicates the need for expediting processes if the government is to see its aim become a reality.
There are a number of challenges for the smart city development. First, the Return on Investment (RoI) is a still big question mark for investors who have economic return in their minds.
Second, in the smart cities, there should be no tolerance for the unregulated emission of pollutants. There has to be speedy and efficient evacuation of waste. This requires significant sections of the urban population changing their mindsets as well as careful balancing with industrial growth.
Lastly, modern cities must have world-class facilities, as per global standards of urban amenities.
Given how the possibility of varying political disposition at the Centre and in some of the states where smart cities are proposed to be set up, close cooperation between the Centre and the states must be guaranteed. The central government hopes to ensure smooth functioning through Special Purpose Vehicles (SPV), to be supervised by the states. Further funding would be made contingent upon their performance as well as fund utilisation. There is also the need to detail how the smart cities would be built, their focus areas, public-private partnerships potential and funding, amongst other things. A proper road map eludes the creation of smart cities, rejuvenation of 500 existing cities being too distant on the radar. It is imperative to progress fast on various counts.
Although the government has mentioned that it would look at borrowing from multilateral agencies as well as utilise any surplus funds at the central and state level, it needs to draw up a foolproof plan on the financial viability. A critical factor in the development of smart cities would be technology. Hence, creation of a tech-savvy work force for operations as well as maintenance would be essential.
Barcelona has developed low-carbon solutions, Hong Kong has one of the best digital governance ranking, Berlin is hoping to create virtual power plans from electric vehicles and has been ranked amongst the top smart cities in the world. However, some experts might argue that most of these cities do not even have half the population of Delhi and Mumbai—barring Hong Kong—which is why the challenges are more. These cities can take a cue from Tokyo that has a population of over 13 million and is also sitting on Pacific Ring of Fire, vulnerable to natural disasters. The city has slowly climbed the ranks of smart cities through its innovative solutions. The creation of even a few smart cities in the next half a decade can change the urban landscape of the country. But, the question remains whether the government can really take the bull by its horns and focus on speedy execution. Unfortunately, the past experience of India’s tardy project implementation continues to be disturb investors at home and abroad. A lot rests on the current government to bite the bullet and change the perception.
The author is director-general, Infrastructure Industry and Logistics Federation of India (ILFI)