• News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
  • Editorial Calendar 19-20
BW Businessworld

Will ‘Smart Cities Mission’ Defy The Doomsayers?

While some cities are attracting investor’s interest, others smaller cities are struggling to raise funds

Photo Credit : Venkaiah Naidu: Minister for Urban Development

It’s been A YEAR since the launch of ‘Smart Cities Mission’ but the slow implementation of the project in many states and mounting infrastructural challenges are raising doubts over the timely completion of the projects. It was launched as an initiative to select 98 smart city projects that could be developed over the five years as the model for other cities to follow.

In the last one year, only cities like Bhubaneswar, Pune, Jaipur have made a good progress and are on the right track to implement their proposed plan. “If some smart cities are developed, there will be competition among others, municipalities will increase their revenue and things will improve,” said Minister of Urban Development Venkaiah Naidu, while reviewing the progress of the smart cities.

However, the delay in the project is causing unease among the investors and key stakeholders. In cities like Bhopal, Guwahati, Chennai, Coimbatore, Solapur, there is no sign of ground level implementation and the city administration is pushing deadlines for various reasons. Rest of the cities are still struggling with infrastructure challenges, bureaucratic and procedural hurdles, and lack of funds and investors.

“While some cities have made a remarkable progress, others are lagging behind. We have already conveyed a strong message to them to start working on the implementation process. We will be now taking state wise review,” said a senior official from the MoUD.

Infrastructure Challenges
Experts claim that in transforming the ‘smart city’ from a concept into a reality, many cities have ignored pivotal components like solid waste management, sewerage and water and electricity. Lack of basic infrastructure is posing a huge threat for the project.

Cities like Chennai, Coimbatore, Solapur, Indore, Visakhpatnam are facing a huge shortage of water. That is the reason work on the project are hitting roadblocks. Also cities, which are prone to disaster, like Guwahati, Chennai, Kakinada, and Visakhapatnam infrastructure challenges are greater than earlier conceived. In Ludhiana, Guwahati, Kakinada, there are no footpath and the roads are highly congested and narrow, making the dream of implementing smart mobility tough for the local bodies. In Davangere, where only 10 per cent of population has access to Internet and IT infrastructure is dismal, the tech based future of the city seems distant dream. Poor waste management, drainage and sewerage are another problem for the cities like Jabalpur, Chennai, Kochi and Delhi.

In Kochi, less than 5 per cent of the houses have a proper sewage disposal system and 70 per cent of the septic water goes directly to canals, contaminating the water and posing serious health risks.

In Delhi, at least 45 per cent of the total area has no sewerage facility. According to an affidavit by the Delhi Jal Board, almost 60 per cent of untreated sewage gets dumped into Yamuna and that amounts for more than 500 million gallons per day.

The Special Purpose Vehicles (SPV) was supposed to run by a full-time CEO with board members, including representatives of the central government, state governments and municipality. One of the main reasons for creating SPVs was to “ensure operational independence and autonomy in decision making and mission implementation”. However, the structure of SPVs seems to place tremendous power back in the hands of state and central governments, which is raising concern among local bodies that feel it undermines the authority of locally elected representatives and allows both central and state governments to interfere with decision-making for execution of the projects.

That is the case in most of the cities in Maharashtra, where state and municipality are controlled by different political parties, causing unnecessary delay. Both Pune and Solapur are witnessing stalling of projects and unnecessary delays. In Tamil Nadu, the lack of coordination between the various agencies is already causing substantial damage to the project of Davangere and Bhopal. Delhi is another classical case of project caught in bureaucratic hurdles among the centre, the state and the local bodies.

Funding Challenge
Another big challenge is to make the city self-sustainable. While some cities are attracting investor’s interest, others smaller cities like Jaipur, Udaipur, Guwahati are finding it challenging to raise funds. “This project is tougher than what we had thought. Fund is becoming a problem. We are now discussing how to collect this amount. The centre has directed us to generate the rest through the (public-private partnership (PPP) mode,” said Guwahati development minister Himanta Biswa Sarma.

Smaller cities claim that raising money via PPP route is proving difficult as investors are interested in cities which are already developed or where basic infrastructure is intact. So Bhubaneswar, Pune, Delhi or Mumbai are attracting most investment, while Solapur, Guwahati and Davengere are lagging behind.

“Smart Cities prove the rising need of involvement of partnerships between private firms and municipalities to make the concept more sustainable and resilient. The revenue from each project will serve as funding mechanism, and the return on investment will include the user charges and advertisement fees,” A. Shankar, head of operations- Strategic Consulting, JLL India said.

[email protected]