The Smart Cities Mission, one of the pioneering projects of the central government, was launched in July 2015. So far, the government has selected 60 cities in three rounds. In Round I, 20 cities were selected, followed by 13 in the Fast Track Round, and 27 in Round II. With regard to the mission’s progress on the ground, projects worth Rs 1,321.97 billion were approved between January and December 2016 for the cities selected so far. In Union Budget 2017-18, the government allocated Rs 40 billion for the mission.
Institutional progress
Tracking the progress of the mission, in terms of special purpose vehicles (SPVs) set up, during November 2016-February 15, 2017, 26 cities had incorporated their SPVs. All the cities chosen in the first round have established SPVs and are moving ahead with project execution, as envisaged in their respective smart city plans.
However, some cities such as the New Delhi Municipal Council (NDMC) are facing issues and are believed to be lagging behind the planned project execution schedule. Cities such as Rourkela and Tirupati are in the process of finalising project management consultants.
Project progress
As of January 2017, there are about 731 projects across the 60 cities, entailing an investment of about Rs 463 billion. Of the total investment, over 54 per cent (Rs 250 billion) pertains to works related to core infrastructure creation (under area-based development), while 12 per cent (Rs 54.68 billion) is for
projects involving the setting up of smart solutions. The remaining 34 per cent (Rs 158 billion) is for projects that relate to pan-city and non-core infrastructure creation.
Of the total projects, 24 have been completed, while work on another 49 is in progress. However, work on a significant portion (about 53 per cent) of the planned projects is yet to be initiated. Other projects are at various stages of initiation.
The execution of smart city projects in cities such as Ahmedabad, Surat, Coimbatore, Amritsar, Ludhiana, Nagpur, Kochi, Davangere, Bhopal, Visakhapatnam and Belagavi are progressing at a fair pace.
Considering the sector-wise split of all the projects (as per the Ministry of Urban Development [MoUD]), the maximum investment is expected to be witnessed in the housing sector (Rs 100 billion), followed by urban transport (Rs 72 billion), and area-based development (Rs 68 billion). Energy, water supply, and information technology connectivity are other areas likely to witness significant fund flow.
Round III
Meanwhile, cities that failed to make it to the previous lists and are competing in the third round are making significant headway in terms of preparations to compete in the upcoming round. Cities such as Bengaluru, Ghaziabad, Bilaspur, Thiruvananthapuram and Oulgaret are expected to be selected. Some cities, such as Bareilly, Rajkot, Dahod, Karnal and Muzaffarpur are in the process of citizen engagement and are receiving public comments for finalising their smart city proposals.
While it was earlier stated that the cities selected in the third round will be announced by March 2017, there is no further update from the government.
Conclusion
As the selected cities in the Smart Cities Mission are pulling loose strings together and making headway in the execution of smart city projects, the challenges involved cannot be disregarded. The concept of a smart city is gaining traction in India slowly, and thus the newly set up SPVs are facing teething issues. Financing remains a lacuna, and is expected to be addressed through the issuance of bonds and greater participation from the private sector. For this to happen, however, the initial push has to be provided by government entities.
