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Modi govt vowed 100 smart cities in 5 yrs. Nine months to deadline, only 30% funds released

A large number of Smart City projects are still under implementation, while full complement of approvals and mobilisation of resources are yet to happen.

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It may be recalled that development of smart cities was considered a key player in the direction of comprehensively developing physical, institutional, social and economic infrastructure of cities, all important in improving the quality of life and attracting people and investments to the city, thereby setting in motion a virtuous cycle of growth and development.

Initially, there was a lot of confusion as to what is meant by a smart city, as the canvas was left wide open with the upfront statement that there is no universally accepted definition of a smart city. The conceptualisation of a smart city varied from city to city depending on the level of development, willingness to change and reform, resources and aspirations of the city residents. So, in the process of identifying the 100 cities to be on the list, a bottom-up approach to urban planning was adopted. It is worth noting that 15.2 million citizens participated in the preparation of plans at various stages, accounting for about 12 percent of the total population of the proposed participating cities.

Based on the learnings from the implementation of the first major urban mission namely the JNNURM, the preparation of smart city proposals has been on a participatory basis. The government did not prescribe any particular model to be adopted by the smart cities. One of the criticisms about the earlier mission was adequately addressed by making it clear that the approach is not one of one-size-fits-all. Each city had to formulate its own concept, vision, mission, and plan which is appropriate to its local context, resources and levels of ambition. Thus, Bhubaneswar prepared a smart city proposal projecting an investment or expenditure of Rs 4,537 crore, with Rs 2,563crore expected to come through PPP. Indore prepared a somewhat ambitious proposal of Rs 9,920 crore, of which Rs 2,004 crore was debt component. Kochi’s proposal provided for a total of Rs 2,075 crore of which Rs 243 crore was to be in the form of PPP. Pune’s total proposal of Rs 3,110 crore included Rs 1,000 crore to come from development rights and Rs 200 crore from the head of user fees.

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The creation of an SPV for implementation was one of the basic requirements of the smart city mission. This was also based on lessons learnt from the earlier mission implementation where it was felt that with the sudden introduction of a large mission programme, the cities which did not have the capacity struggled a lot to manage affairs within the limited capacity they had. In the process, consultants became active. So, it is for the first time that an independent somewhat professional mechanism in the form of an SPV got created for implementation. Though there were some criticisms about the SPVs being not in line with the elected nature of the city councils, it was important that implementation gets localised, capacities are created and local accountability is ensured, all of which the local SPVs were to provide. The proposal was to give complete flexibility to the SPV to implement and manage the smart city project and the state or the ULB as relevant, to undertake measures as detailed in annex 5 of the mission statement. What has been the performance of these SPVs? Have they come into existence fully, have they been made fully functional, have they been successful in enhancing the paid-up capital continuously as per project requirements

Financial innovation is incorporated in the design of capital and investment plans. Thus, while 45 per cent of the total mission funds of Rs 2.05 lakh crore is the central and state share, 21 per cent each is to come from convergence and PPPs, five per cent through debts and loans, 1 percent through own funds and the rest 7 percent from others. But against this total provision, it is a matter of concern that the central share released so far amounts to about Rs 17,300 crore, whereas the states’ share released stands at Rs 9,100 crore only.

Assuming the citizen’s preferences and views have been amply reflected in the structuring of the mission, one can see that the largest share, close to one-fifth of the total resources, about Rs 42,000 crore is to go for area development. Urban mobility comes on top among specific sectors with about Rs 34,000 crore being earmarked for such projects. The traditional urban sectors of water supply, wastewater/sewerage, stormwater drainage and SWM together get only about Rs 30,000 crore, which apparently seems to indicate that considerable work has already been done mainly under the earlier urban renewal mission and people and cities are now focused on broader area development and improvement in urban mobility.

When we look at implementation so far, over 3,700 projects worth Rs 1,36,000 crore have been grounded of which 959 projects are reported completed with a cost of about Rs 15,260 crore. With smart command and control centres coming into existence in as many as 17 cities that use digital technology to integrate different service networks, enabling the city administration with centralised monitoring and decision-making capability is a notable achievement in the direction of smart city management. 60 projects are reported to have been completed in 25 cities under the smart roads component, 27 smart solar projects in 17 cities, 12 smart wastewater projects in 10 cities, 38 smart water projects in 24 cities also have been completed.

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The mission has definitely resulted in a process of new ventures, which leverage technology to the benefit of larger number of city residents. The Bhopal integrated command and control centre aims to enhance the safety and security of citizens through the implementation of India’s first cloud-based Integrated command and control centre which consists of a cloud data centre for all seven smart cities of the state such as Bhopal, Gwalior, Jabalpur, Indore, Ujjain, Satna, and Sagar. Also, a cloud-based disaster recovery centre for all smart cities of the state and an integrated command and control centre at each of the above cities with city-based controls and analytics forming part of this venture. If this has been able to break silos of city operations as claimed, then this is a positive development.

There is no doubt that expectations will continue to be high even as four years of implementation of the mission are over. Technically, only one more year of the mission is left but a large number of projects are still under implementation; full complement of approvals, and expected full mobilisation of resources, however, are yet to happen. While there cannot be any scope for any outright criticism of the programme at this stage, the fundamental question which needs to be addressed is whether the city becoming is smart, and whether the citizens are deriving fully gaining from the intended outcomes.

So, the two tests to be adequately resolved here would be to gauge the extent the projects and the result achieved have made life smarter for the city residents and enquiring about the sustainability guarantee which is there especially keeping in mind that the required resource availability subsequent to completion of a project, mainly for O&M and for updating technology, often becomes a casualty in our city systems.

When citizen participation was taken up while formulating city-specific smart plans, in many places improvement in mobility emerged as a more prominent requirement that ranked even among some of the basics like water and waste management. That shows how concerned people were about better mobility, reducing congestion and pollution and saving in time. Even after the NUTP 2006 laid down a detailed framework for cities to adopt, even today only a few Indian cities have organised and regulated public transport systems and show definite infusion of funds under different government programmes. However, buses still continue to fall short of requirement, even after taking up metro rail projects in some more cities, and public transportation systems across the country continue to be inadequate in meeting the mobility requirements of a growing urban population.

At a time when the share of public transport in India is exhibiting a declining trend, unless public transport systems are augmented to keep pace with the rapid urbanisation and substantial increase in travel demand, the challenges brought about by increasing use of private motor vehicles—like acute road congestion, rising air pollution and a high level of accident risk — will only intensify. However, it is encouraging to note from a report that the ITMS in the cities of Ahmedabad, Surat, and Visakhapatnam is making travel within the city seamless and more efficient.

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When smart cities launch consultation was held with states in 2015, the importance of innovative financing tools to make urban bodies self-reliant was stressed. How far have we moved since a good number of smart cities’ floating municipal bonds are a matter of concern?

Is there a regular credit rating/upgrading mechanism in position for all cities? Has the practice of capturing some clearly identified source of revenue of a municipal body in an escrow account started? How many state governments have been able to provide security by pledging to meet debt obligations in case of municipal borrowers not being able to meet them? What about having Business Improvement districts in commercial areas where property owners and traders organise themselves to provide public services? What about raising funds through tax increment financing options, a place-based strategy used by urban local bodies to finance local economic development, pooled finance mechanism, accessing the NIIF, PPP routes, etc.

One of the essential stated features of the smart city plans is at least 80 percent buildings should be energy efficient and green buildings. One has not seen any concrete development in this regard. In the overall context of smart cities it has been mentioned that there are likely to be increasing opportunities for the public sector to drive investment in smart technologies in the low carbon and environmental goods and services sector, which could include retrofitting of public sector buildings, smart energy grids and broadband access, electric vehicle charging infrastructure, installation of heat networks, onsite renewable energy generation and involvement in general adaptation/mitigation initiatives.

We may remind ourselves that the smart cities mission requires smart people who actively participate in governance and reforms. Citizen involvement is much more than a ceremonial participation in governance.

The author is Former Secretary, Ministry of Urban Development, Government of India. Views are personal.

This article was first published on Observer Research Foundation (ORF).

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  1. For all smart cities setting up SPV s was made mandatory with a view to operationalise activities based on corporate practice. Looking at the board directors. They are mostly beurucrats, often drawn from members of other smart city spvs nearby. The compulsory external directors are not to be seen in many SPVs. The much avowed people participation is rarely seen. Public perception is that smart cities are an extension of development worksnormally carried by ULB s. In most cases, there is nofulltime CEO, with commissioner acting as the CEO. INEPT CONSULTANTS ARE YET ANOTHER STORY.

  2. Money is the key constraint. The amounts allocated are minuscule in relation to what metros, cities and large towns require. Even today, in terms of political considerations, it is the rural areas that are privileged. 2. To the existing infrastructure deficit, some thought will have to be given to making urban areas better equipped to deal with extreme weather events.

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