Smart City race kicks off with 20 cities

By: | Updated: February 9, 2016 11:09 AM

Each city will get R1,000 crore altogether from the Centre and the state, over a period of five years.

Smart city projectThe Smart Cities Challenge is a competition designed to develop smart proposals to improve the lives of city dwellers.

Seven months after the process for identifying Smart Cities started, the government announced the first list of 20 cities that will get funded this year. The cities are located in 11 states and the Union Territory of Delhi. While four state capitals—Chennai, Jaipur, Bhubaneswar and Bhopal—are in the list there are no names from Uttar Pradesh, Bihar and West Bengal. Missing from the list is Varanasi that the Japanese government has evinced interest in and Chandigarh, Puducherry and Nagpur, where the French are willing to help out.

The Smart Cities Challenge is a competition designed to develop smart proposals to improve the lives of city dwellers. For this, the ministry of urban development selected Bloomberg Philanthropies to be its knowledge partner. It is estimated that by 2030, 40% of India’s population will live in urban areas and contribute 75% of the country’s GDP. The 20 identified cities have provided plans to mobilise resources worth R50,802 crore over the next five years under the public private partnership (PPP) model. Ten of the 20 cities plan to mobilise R8,521 crore under PPP. This redevelopment will happen over 26,735 acres of land.

How have the 20 cities been identified?

The Smart Cities Mission was rolled out in June 2015. In the first stage, state governments had to short-list potential Smart Cities based on criteria specified by the Union ministry of urban development. The 100 Smart Cities have been divided equitably across states. It gives equal weightage to the state’s urban population and the number of towns in the state/Union Territory. Uttar Pradesh had to nominate 13 cities, Tamil Nadu (12), Maharashtra (10), Madhya Pradesh (7), Gujarat, Karnataka (6 each), Rajasthan, West Bengal (4 each), Andhra Pradesh, Bihar, Punjab (3 each), Telangana, Haryana, Chattisgarh and Odisha (2 each). All other states and Union Territories have one city each.

Each potential Smart City was asked to prepare a proposal assisted by a consultant and a hand-holding external agency that includes the likes of the World Bank, the Asian Development Bank, the Japan International Cooperation Agency and the Department for International Development (the UK) among others. Each of the 100 cities (only 98 were named finally since Uttar Pradesh and Jammu & Kashmir could not finalise a city each in time) submitted its proposal by end-December. This was done based on feedback from citizens. Each proposal had two parts—an area development plan and a pan-city initiative based on the particular needs of each city. Initial work will happen on the identified area within each city where smart solutions will be rolled out.

A panel of experts examined these proposals to identify the first 20 cities that will get funding starting this year. Next year, another 40 cities will be selected, while the rest will come in the third year. The selection was based on a series of parameters, including city vision and strategy, cost effectiveness, credibility of implementation and innovation. Bhubaneswar topped with a score of 78.83% followed by Pune (77.42%) and Jaipur (73.83%).

What happens now that the cities have been identified?

The selected cities now need to set up special purpose vehicles (SPVs) to obtain funds from the Centre and the state. Each SPV will plan, appraise, approve, implement, manage, operate, monitor and evaluate the respective project. The SPV will be headed by a full-time CEO and have nominees of the Centre and the state on its board.

Much of the initiative is based on improved ICT services. Most cities have focused on better infrastructure relating to smoother traffic movement, continuous and metered power and water supply. According to a Deloitte report, the PM’s vision of building smart cities will entail and investment of $150 billion over the next five years. Of that, 80% will have to come from the private sector.

States not featuring in the first list can re-work the proposal for their top city for submission by April 15. All cities have identified both area-based development and pan-city development projects based on discussions with citizens. In the area-based development, the focus will be on retrofitting, redevelopment and greenfield development of areas.

Who spends how much and what facilities can one expect?

While the details of all the cities are not out, Bhubaneswar has rolled out a R4,450 crore plan. NDMC has a R1,897 crore plan while Belagavi in Karnataka (R1,685 crore) and Jaipur (R1,667 crore) too have specified the investment planned. Most cities in their area-development plan have focussed on improving transport links, continuous metered water and electricity services apart from building sewerage systems. Much of the facilities will be linked to the internet so that residents can gauge the success of the plans. The NDMC in Delhi also plans to pedestrianise some parts of Lutyen’s Delhi.

How will the Smart Cities be funded?

Each of the 20 cities that have been selected will get R200 crore in the first year followed by R100 crore each over the next three years from the Centre. States will contribute an equivalent amount. The cities will need to involve the private sector in PPP plans, too. This could be done by raising user charges to meet the expense incurred. In the future, there could be municipal bonds as well.

Who will be the big gainers when India builds Smart Cities?

It all depends on how cities go ahead in implementing their plans. The hope is that planned development in one area will encourage other areas in the city to seek similar plans. The success of one city will prod other cities to replicate such plans. These are early days, but since much of the development will be driven by ICT, there is immense scope for IT companies.

What are the contentious issues here?

While there will be objections over the cities selected, the fact is that every city had to compete to get selected. So, there are no biases here. The issue is whether the right areas have been selected by the cities. Considering that most cities have problems with housing (elimination of slums), traffic planning, electricity and water supply, not all issues are expected to be tacked in the first flush. But, now that an effort has started, the cities need to ensure that they deliver on the promise.

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