28 February 2020

Cover Story

Smart Cities

Transforming our surroundings and making them better, safer, greener and more efficient

The good news about the Smart Cities Mission, part of Prime Minister Narendra Modi's ambitious Digital India initiative, is that the first list of 20 cities selected for the construction of Smart Cities has been released by the Union Urban Development Ministry, the nodal agency for the implementation of the Mission. The bad news is that Bihar Chief Minister Nitish Kumar has attributed political motives on the part of the Modi government for the non-inclusion of any city either from Bihar or from Uttar Pradesh in this first list of 20 cities. However, Union Urban Development Minister Venkaiah Naidu has refuted the criticism and confirmed that there was no political consideration or interference in the selection of the 20 Smart Cities.

 

Venkaiah Naidu clarified that the shortlisting was done by three different panels of experts from the proposals received from state governments in respect of a total number of 97 cities. Elaborating further, he said the criteria for selection were the feasibility of the proposal, cost-effectiveness, result-orientation, citizen participation, strategic plan, vision and goals, among other things. The final selection was made on the basis of competition, the real victory of which was the strengthening of the bottom-up approach. The minister further said that the bottom-up approach, which is the key planning principle under the Smart Cities Mission, enables leveraging of strengths and opportunities of each city for comprehensive enhancement of the built environment, local economy as well as quality of life of citizens.

 

In the first batch of the 20 cities that will be developed into Smart Cities with an envisaged investment of Rs.50,802 crore during the next five years, Bhubaneswar has emerged on top. Meanwhile, the other cities that have made it into the list are Delhi, Jaipur, Surat, Pune, Kochi, Ahmedabad, Jabalpur, Visakhapatnam, Solapur, Davanagere, Indore, Coimbatore, Kakinada, Belagavi, Udaipur, Guwahati, Chennai, Ludhiana and Bhopal.

 

IMPLEMENTATION OF MISSION

Minister Venkaiah Naidu asked the concerned State Governments to launch their respective projects latest by June 25, 2016, the date on which the announcement of the Mission would complete a year. The 20 cities have proposed a total expenditure of Rs.48,000 crore over the next four years. The Central Government will provide each city an assistance of Rs.500 crore, with the State Government having to pitch in a contribution of the same amount on its part. A Special Purpose Vehicle (SPV) is to be set up for each city to implement the projects. Each SPV will be headed by a Chief Executive Officer, and it will also have nominees of the Central Government, State Government and Urban Local Bodies (ULB) on its board. A list of 40 cities will be released next year and another list of 38 the year after that. Out of these, 24 will be state capitals, 24 business and industrial centres, 18 culture and tourism hubs, while five will be port cities and the remaining three will be education and healthcare hubs.

 

Meanwhile, a study report prepared jointly by the World Economic Forum and PricewaterhouseCoopers (PwC) foresees the private sector playing a  pivotal role in the development of Smart Cities as India’s urban growth has not seen a commensurate rise in infrastructure and municipal services. As such, the Smart Cities scheme will not only contribute towards meeting the massive demands for urbanization, but it will also open up huge business opportunities for the private sector as the entire scheme is projected to require a total investment to the tune of around $1.5 trillion.

 

FUNDING WOES

A major point of concern to be factored in while implementing the Smart Cities Mission is Public Private Partnership (PPP). While the seed money would be from the Union and State Governments, much of the funds for financing the Mission would have to come from private companies in India and abroad. The government outlay for the Mission is a token amount of $7.1 billion (Rs.48,000 crore), whereas a report by the multinational professional services firm Deloitte pegs the estimated investment of the Mission at over $150 billion (roughly Rs.10,15,520 crore) over the next few years, with  nearly $120 billion (roughly Rs.8,12,415 crore) expected to come from the private sector. The question of availability of funds of such a magnitude for the gargantuan Mission is indeed a matter of concern for both the Central and State Governments.

 

In addition to the substantial investments that the overseas companies are expected to make, major challenges remain with regard to the development of Smart Cities project management, government decision-making and policy and regulatory framework, according to Deloitte India Senior Director P N Sudarshan. Private companies have reasons to believe that it is not easy doing business in India, having to deal with the Union and State Governments besides local municipal government agencies. Mr Sudarshan has also spoken about how several cities have made incremental investments in smart solutions, and how the challenge lies in replicating these investments on a large scale.

 

During the next 10-15 years, he feels Smart Cities will emerge as the key technology, industry and social hubs in the country. He expects to see service providers leading consortiums in the development of Smart Cities since smart solutions are heavily dependent on ICT. However, Venkaiah Naidu has been upbeat about investments by the industry at home and abroad. He said that both national and international investors are looking for opportunities in the backdrop of the recent financial crisis and that people are searching for safe investments. He said Smart Cities offered the safest investment because land is going to be there, structures are going to be there, and therefore, the returns are assured.

 

NO DELAYS PLEASE

What if States delayed implementation of projects?

Taking a tough stance over the delay of project approvals at the state level, Naidu said the new parameters set by his Ministry had created a “perform or perish” situation where municipal councils could not afford to miss this opportunity of recasting the country’s urban landscape. The Urban Development Ministry will impose fines on states that violated the timeline of 60 days for finalizing the projects.

 

 

CARRYING RURAL INDIA ALONG

Another constraint in the implementation of the Smart Cities Mission is the stagnation of the agrarian economy of the rural areas of the country. About 68 per cent of the country's population lives in rural areas. Their agrarian economy is susceptible to fluctuations in the monsoon rainfall and lacks a strong underpinning of governmental support as agriculture is a State Government policy and different State Governments with different political hues have their own agricultural policies that are anything but uniform. Resultantly, agriculture is far from being a lucrative occupation for people in the rural areas who lag behind their urban counterparts in economic stability and progress. Unless the rural population of the country is carried along by the Central Government with state support and encouragement in pursuing agriculture as a profitable vocation, it would be that much more difficult for it to make a success of the Digital India scheme and, consequently, the Smart Cities Mission.

 

Smart Cities could become a successful proposition and a thriving reality only when the coexistence of villages and small towns in the rural areas is a viable alternative for the people. Seized of this ground reality, while implementing the Smart Cities Mission, the Central Government is according due preference and precedence to the development of the rural areas, with a view to ensuring their connectivity to the urban areas. The internet population in India has grown to 190 million in 2014, the third largest after China and the US. According to one estimate, the internet population is expected to grow to 500 million in 2018, with the rural population alone accounting for 210 million. With more and more of the rural populace coming under the reach of the Digital India Scheme, the success of the Smart Cities Mission would become a brighter probability. The most striking feature of the Mission is a paradigm shift in urban development since it envisages participation of the citizens in city vision and smart city plans, execution of the plans by local bodies and agencies without interference from the Union Urban Development Ministry.

 

While launching the Smart Cities Mission,
Prime Minister Modi had said that in India for the first time a challenge was being floated wherein citizens of urban India would be able to contribute towards the formulation of development visions of their cities. The competitive mechanism that the Mission offered would end the top-down approach, and lead to people-centric urban development. He added that these urban development schemes were not prepared by the Government alone, but involved the biggest consultation exercise ever undertaken by the Union Government, involving all stakeholders and examining global best practices. Lamenting the state of affairs prevailing in urban areas, he felt if the Smart Cities Mission had been introduced 25-30 years ago, it would have led to good results today. He said it was better late than never, and schemes that had a clear vision and were people-centric were the need of the hour. He sought replication of the best practices from across the country and highlighted Hyderabad’s tax collection system, Karnataka’s efforts towards solid waste management, and Chhattisgarh’s work to eliminate open defecation.

 

GROWTH ENGINES

The Smart Cities Mission aims at enhancing the overall living conditions of the people in the urban areas inhabited by about 32 per cent of the country's total population, in keeping with the changing times and rapidly improved international standards. It aims to make this possible by promoting infrastructural development, economic growth, local governance and the facilities and amenities available such as robust information technology connectivity, e-governance, communications, uninterrupted supply of water and electricity, smooth traffic conditions, safety of the people, solid waste management, etc, without having to rip apart the overgrown cities and rebuilding them all over again. Part of Prime Minister Modi's ‘Digital India’ vision, the Smart Cities Mission was ushered in with a view to developing 100 Smart Cities across the country, with funding from the Central Government, private-public partnership and the active participation of the governments of the States of the respective Smart Cities identified for the purpose over a five-year period.

 

The move offers a smart option to take the country closer to an advanced level of development of cities. It aims at urban renewal and retrofitting and seeks to provide smart solutions. The Digital India program envisages the emergence of India as a leading global power capable of providing digital services in the education, health and banking sectors. With 75per cent of GDP in the next 15 years expected to flow from them, Smart Cities are expected to become growth engines.

 

BHUBANESWAR LEADS THE WAY

Bhubaneswar, which tops the list of 20 selected cities, had chosen 985 acres very close to the railway station and suggested complete retrofitting of the area. Jagan Shah, Director, National Institute of Urban Affairs, which is helping the government with the guidelines of the Smart Cities Mission, said as a cross-section of a city it reflects a strong example that can be replicated in other cities. Sanjay Dutt, Managing Director, India, Cushman & Wakefield, a property consultancy firm, emphasized that the Smart Cities project will aim to provide world-class infrastructure in Indian cities at a time when the Central Government is pushing for urban renewal in India. He believes that developing the projects in the shortlisted cities, which comprise a mix of cities from all regions of India having high economic and industrial potential, will ensure quality infrastructure, technology-enabled services, and sustainable public transport. Furthermore, affordable housing, which is already a priority for the government, will receive a further boost through the project, he added. He further said that incentivizing infrastructure development will lead to higher private participation in the formation of Smart Cities. Under such a scenario, the private sector, especially the infrastructure and real estate sector, will witness ample opportunities through investing in specific cities.

 

 

TOP 10 SMART CITIES IN THE WORLD

When it comes to Smart Cities, many well-known megalopolises from across the globe have demonstrated leadership. Worldblaze.in
a website that aims to provide readers with knowledge about top things all around the globe, prepared a list of the top 10 Smart Cities internationally in 2015. The top 10 Smart Cities in the world as per that list are as follows: Seoul, San Francisco, Hong Kong, Singapore, De Janeiro, London, Stockholm, Chicago, Seattle and Vienna.

 

 

FOREIGN COUNTRIES INTERESTED IN INDIA

Soon after Prime Minister Modi announced in 2014 his vision to set up 100 Smart Cities across India, many countries started to show interest in participating in this ambitious program of accommodating about 814 million urban populations by 2050. Japan signed an MoU with India in 2014 to develop Varanasi into a Smart City by using the experience of Kyoto, the Smart City of Japan. The Nikken-Sekkei Research Institute of Japan has signed in January this year an MoU with IIT-Kharagpur, offering to share its ideas on how to make Indian cities smart and also take back Indian cultural ethos to rejuvenate cities in Japan. Cities in Japan are already smart and have reached a level of saturation and perfection, said Prof Joy Sen, Head of Architecture and Regional Planning Department in IIT-Kharagpur. He also said the Japanese will share their technology, ideas, and knowhow to help in the building of Smart Cities in India.

 

Singapore expressed interest in 2014 to enable India to make a "good decision" in realizing its plan to develop Smart Cities. Meanwhile, Canada has offered to help India in building Smart Cities and achieving its target of housing for all by offering wooden multi-storey housing technology. Germany, which is India's second largest bilateral donor, has announced it would contribute to the Smart Cities Mission and would build Kochi, Bhubaneswar, and Coimbatore as Smart Cities. Germany has already been engaged in various fields related to Smart Cities – such as sustainable urban mobility, water & waste-water management, renewable energies and energy efficiency. India and the US have agreed on formulating action plans for the development of Smart Cities in Allahabad, Ajmer, and Visakhapatnam.

 

Several countries like Sweden, Malaysia, Israel and the UAE have agreed to partner with India for the Mission. The United Kingdom has partnered with the India Government to develop three cities – Pune, Amravati, and Indore. A business delegation from the United Kingdom called on Venkaiah Naidu early this year and advocated setting up hospitals in Indian Smart Cities. Against the backdrop of the joint statement issued by Prime Minister Narendra Modi and his British counterpart, David Cameron, in London in November 2015, agreeing to support opening of 11 India-UK Institutes of Health in India at an envisaged investment of £1 billion, the delegation expressed its interest in investing in healthcare infrastructure that Smart City projects aspire to build.

 

Israel's Tel Aviv has also entered into an agreement to help with urban transformation in the cities of Pune, Nagpur and Nasik to foster innovation and share its technical know-how. France has expressed interest in Nagpur and Puducherry.

 

Spain's Barcelona Regional Agency has expressed interest in exchanging technology with Delhi. Apart from foreign governments, many organizations and multilateral agencies such as the UK government-owned Department for International Development, German government development bank KfW, Japan International Cooperation Agency, the US Trade and Development Agency, United Nations Industrial Development Organization and United Nations Human Settlements Program have also expressed keenness to partner with the Indian government and offered financial assistance by way of loans. Furthermore, Chinese President Xi Jinping is understood to have promised his country’s commitment to invest US$100 billion in India over the next five years in fast trains and Smart Cities.

 

WIN-WIN SITUATION

It is thus evident that over and above the vast scope for development of Smart Cities in India on the lines of the Smart Cities Mission, there is also tremendous interest on the part of several developed nations to cooperate with India by making substantial investments and developing Smart Cities. With the Indian Government committed to the cause of the Mission and keen to open its doors for its fulfillment to Private Public Partnership both from within and outside India, it is a win- win situation for all the stakeholders, especially the people of India, who will be the ultimate beneficiaries of the Mission. As such, India is expected to see a flurry of activities during the next 4-5 years as part of the process of development of Smart Cities, which would hopefully provide a major boost to the Indian economy and pave the way for the development of several more Smart Cities than what has been envisaged until now.

 

NOT JUST SMART CITIES, INDIA ALSO NEEDS SMART VILLAGES

Lately, there have been demands from certain sections that after successfully implementing the ongoing Smart Cities Mission across the country, the Central Government in coordination with the state governments should also consider creating Smart Villages to promote overall economic growth of the country as the progress and development of rural areas is equally important to foster rapid and sustainable advancement of India. Ra