Towards a hundred smart cities

By: Anshuman Magazine, CMD, CBRE South Asia

Track2Realty: Ever since the new government’s announcement of its intent to build a hundred smart cities in India, the nation has been abuzz with definitions of, fund allocations for, and city identification of such development. With good reason too, since the implementation of such ambitions would ultimately result in national wealth creation—to help our cities become sustainable and livable urban centers of growth.

Turning to the key steps needed to create one, a careful study of sustainable cities around the globe—from Copenhagen, Curitiba and Cape Town to San Francisco, Sydney and Singapore—would reveal the following points that are common to all:

i.          Smart governance at the municipal level

ii.        Holistic urban planning approach for economic, social and environmental sustainability

iii.       Smart policies being more effective in early development stages over investment quantum

iv.        Citizen involvement

v.         Smart technology

vi.        Integrating green initiatives with human development focus

vii.      Addressing challenges of informal urban settlements

Although a specific timeline and implementation process plan are yet to be publicized, the national vision identifies creating these one hundred cities as ‘satellite towns of larger cities’ and through the modernization of ‘existing mid-sized cities’.

The government has so far announced just a few of these cities—Ponneri in Tamil Nadu, Krishnapatnam in Andhra Pradesh, Tumkur in Karnataka (all three in the Chennai–Bengaluru Industrial Corridor region), Varanasi in Uttar Pradesh, the Greenfield Gujarat International Finance Tec-city (GIFT), and Guwahati in Assam—apart from other ‘industrial smart cities in seven states of India’ (presumably along the Amritsar–Kolkata Industrial Corridor region).

The Ministry of Urban Development (MoUD), Government of India, is expected to come out with a document soon to announce the names of existing cities (mostly those with an urban population ranging between 1–4 million, and a city each from the seven sisters in the north east) that it plans to convert into ‘smarter versions’.

Cities with an approved Master Plan, or those with a minimum 5,000 acres of available land for economic and housing needs are likely to be considered by the ministry. Now it remains to be seen whether these key steps (mentioned earlier) for creating a smart city will be adhered to by the MoUD in India.

In terms of funding, the center has allocated Rs. 7,060 crore for initiating smart city development for the current fiscal. Meanwhile, options such as infrastructure bonds, public–private partnerships, and the municipal bond market are also being considered for funding avenues. The opportunity of private sector participation is being considered too, along with a Special Purpose Vehicle to execute the project. A first concept note prepared by the MoUD has estimated the project development cost over 20 years to be around Rs. 6.86 lakh crore, of which it proposes to earn Rs. 39,000 crore from a slew of ‘Green’ taxes.

To encourage the development of smart cities, moreover, the requirement of the built-up area and capital conditions for Foreign Direct Investment has also been reduced from 50,000 sq. m. to 20,000 sq. m. and from US$ 10 million to US$ 5 million, respectively, according to Budget 2014–2015 announcements in July 2014.

The government for its part may deliver on the infrastructure front, but in the final count it is the city—complete with metropolitan administrative agencies and citizen bodies—that needs to initiate as well as sustain such SMART development. Whether it is the use of smart mass transit systems and green construction technology, the extent of water usage and energy consumption, the city’s air quality, its carbon footprint, or quality of life—citizens like us have to engage with municipal authorities to make our cities green, economically and ecologically sustainable, and livable.