The Ministry of Urban Development (MoUD) launched one of its flagship missions, the Smart Cities Mission, in July 2015. The mission’s aim is to improve the quality of life in Indian cities by applying smart solutions to provide core infrastructure services. As envisioned under the mission, the core infrastructure elements in a smart city include adequate water supply, solid waste management, sewage and septage management, stormwater drainage development, energy efficiency, affordable housing, etc. Thus, the focus of the mission is sustainable and inclusive development of the country’s urban centres.
The MoUD has adopted a challenge or competition method to select 100 cities under the mission. To date, 90 cities have been selected by the ministry. In Round I, 20 cities were selected, followed by 13 in the Fast Track Round, and 27 in Round II. Recently, in June 2017, the MoUD selected another 30 cities under Round III of the mission.
Together, these 90 cities will implement projects entailing a total investment of about Rs 1,192 billion. While 40 per cent of this investment will flow to Round I, 25 per cent and 47 per cent of the investment will be for the Fast Track Round and Round II cities respectively. Round III will get the maximum investment under the mission, amounting to 48 per cent of the total corpus. As against these investment requirements, the centre has released funds worth Rs 59.62 billion to the cities during financial years 2015-16 and 2016-17 (as on March 16, 2017).
So far, of the 60 cities selected earlier, 55 have incorporated city-level special purpose vehicles for implementing projects. Further, 23 cities have appointed project management consultants for designing, developing, managing and implementing projects under the mission. Requests for proposal for appointing project management consultants have also been floated in another 22 cites.
As of June 2017, 800 projects have been identified by the 60 cities from the earlier rounds. These projects will entail investments worth Rs 340 billion. Of these, while 60 projects worth Rs 10 billion have been completed, work on 115 projects, entailing a total investment of Rs 45 billion, have commenced. Meanwhile, detailed projects reports are being prepared for 440 projects worth Rs 185 billion, and 185 projects worth Rs 100 billion have been tendered by respective government bodies.
Focus on water supply and sanitation
The mission has laid great emphasis on improving the basic infrastructure for water supply and sanitation, as well as deploying technology-based smart solutions to enhance efficiencies in the provision of these services.
For the 60 cities selected under Rounds I and II and the Fast Track Round, investments to the tune of Rs 32.07 billion have been earmarked for augmenting water supply services. At the same time, sewage and solid waste management projects have been allocated funds worth Rs 23.57 billion and Rs 9 billion respectively. Meanwhile, projects pertaining to stormwater drainage development in these cities are expected to cost Rs 15.1 billion.
Continued importance under Round III
As compared to the previous rounds, the water supply and sanitation sector has received even greater attention in the smart city proposals of the 30 cities selected under Round III. A total of 205 projects worth Rs 73.71 billion pertaining to this sector are on the anvil under this round. In comparison, the previously selected 60 cities have a combined total allotment of only Rs 79.74 billion for this sector.
The focus of the 205 water and sanitation projects in Round III cities will be on creating water and sewage treatment infrastructure, laying water supply and sewerage networks, improving solid waste collection and transportation services, developing waste treatment plants, reusing treated sewage/solid waste, and monitoring networks and vehicles.
In terms of both number and investment, a majority of the projects – 166 projects involving a total investment of Rs 53.76 billion – will be area-based development projects. On the other hand, the remaining 39 projects involving an investment of Rs 19.95 billion will be implemented on a pan-city basis.
While most of the proposed projects focus on the development of core infrastructure, considerable emphasis has also been placed on deploying information and communication technology (ICT) solutions for the provision of these infrastructure services. Of the total projects, 156 projects in these 30 cities are focused solely on the creation of core infrastructure for the water and sanitation sector. These projects will receive the bulk of the total investments amounting to Rs 61.27 billion (or about 83 per cent of the total). At the same time, there are 39 projects which have elements of both infrastructure creation and ICT solution deployment. These projects will entail an investment of Rs 11.67 billion, or about 16 per cent of the total investment. The remaining investment of Rs 770 million (only about 1 per cent of the total) will be made for the implementation of 10 projects focused solely on ICT solutions, such as geographic information system-based monitoring and radio frequency identification tagging of network infrastructure and assets.
With regard to project scope, the maximum investment (43 per cent) will flow to water supply projects. This is followed by sewage, solid waste and stormwater drainage projects, which will receive 23 per cent, 15 per cent and 9 per cent of the envisaged investment respectively. Significant emphasis has also been laid on projects involving the treatment and reuse of treated sewage/solid waste, and deploying IT solutions and monitoring assets and networks. Together, these projects will entail an investment of Rs 7.54 billion.
Of the 30 cities selected, the maximum investment in the water and sanitation sectors will be made in Aizawl, Srinagar, Aligarh, Gangtok and Jhansi. Together, these five cities will present investment opportunities worth Rs 32.53 billion, or 44 per cent of the total investment flowing to the 30 cities. In terms of number of projects, 17 projects have been proposed for Jammu alone, followed by 12 each for Aizwal, Srinagar and Jhansi.
The Smart Cities Mission will go a long way in developing core infrastr ucture services in India’s urban centres. The water and sanitation sector has also been given a much-needed thrust under the mission. While the 60 cities previously selected under the mission have also focused on creation of water supply and sanitation infrastructure, projects under Round III of the mission will entail a much higher investment requirement for such projects.
Thus there exist significant opportunities in the water and sanitation sectors under the Smart Cities Mission. Stakeholders such as project developers, equipment providers and pipeline manufacturers are set to benefit from these developments. Going forward, the centre plans to select another 10 cities in the last and final round of the mission. This is expected to give a further push to the development momentum in these sectors.
However, the water and sanitation sector has not received appropriate fund allocations under the mission. According to industry reports, of the total amount sanctioned to cities under the mission, only about 21 per cent of the funds have been allotted to water supply, and sewage and waste management projects. The remaining funds are usually accounted for by road and mass transit projects. Therefore, to ensure the overall development of a smart city, the government needs to ensure equitable distribution and allotment of funds to all the focus areas under the mission.