Tying up Loose Ends: Cities report modest progress under SCM

Cities report modest progress under SCM

NITI Aayog has publicly lauded the implementation progress of the Smart Cities Mission (SCM). For the past couple of years, smart cities have been a key focus area of the government. So far, 90 cities have been selected by the Ministry of Housing and Urban Affairs under the SCM, launched in July 2015. In Round I, 20 cities were selected, followed by 13 in the Fast Track Round and 27 in Round II. In June 2017, the central government announced a list of another 30 cities to be developed as smart cities.

A total of 45 cities contested for 40 available smart city slots but only 30 feasible plans were selected. These include Thiruvananthapuram, Naya Raipur, Rajkot, Patna, Srinagar, Dehradun, Jammu, Jhansi, Allahabad, Aligarh and Gangtok. Together, these 90 cities will entail investments worth over Rs 1.92 trillion. As of July 2017, a total of Rs 97 billion had been released by the central government for the mission.

Work in progress

Tracking the progress of the SCM, as of July 19, 2017, 2,313 projects worth Rs 963 billion are in various stages of implementation. Of these, 57 projects worth Rs 9.4 billion have been reported as completed. Meanwhile, work has commenced in 116 projects worth Rs 45 billion and 182 projects valued at Rs 98 billion are under tendering. Further, preparation of detailed project reports (DPRs) has been completed for 439 projects worth Rs 185 billion and DPR preparation is currently under way for 1,519 projects worth Rs 627 billion.

In terms of special purpose vehicles (SPVs) set up, so far, 75 cities have 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.

Progress under key cities

As per a report by the American Chamber of Commerce in India and PricewaterhouseCoopers, substantial progress has been reported across the eight lighthouse cities under Round I. In Pune, works have been completed for setting up a command and control centre to monitor a fleet of 2,000 buses, an adaptive traffic control system and an intelligent transport management system (ITMS) for the the bus system. Projects related to road widening, street lighting and intelligent road management are under implementation. Meanwhile, a number of projects have been put on the block. These include those for the procurement of 100 electric buses, 24×7 water supply, and smart metering. While none of the projects being implemented in Surat have been completed, the city has issued work orders for an integrated command and control centre, the Surat integrated transport-mobility administration centre and water supply management. With regard to Ahmedabad, work has been completed for the bus rapid transit optic fibre cabling project, while the deployment of an ITMS and the setting up of a command and control centre are currently under way. Jabalpur has over 100 projects proposed to be developed as part of its transformation to a smart city. While none of the projects have been completed, work orders have been issued for setting up a command and control centre. Six projects are currently under implementation in the solid waste management segment and tenders have been issued for projects in the safety and security, road, street lighting, smart lighting, and mobility and transport segments. Visakhapatnam has completed the development of a centrally controlled monitoring system for street lighting while a work order has been issued for waste management. Work on most of the projects in Chennai has not taken off, though projects entailing the installation of energy-efficient LED street lighting are under implementation. Ludhiana and Bhopal have reported modest progress in terms of project-related activity. In Bhopal, work orders have been issued for several projects such as ITMS, smart pole and intelligent street lighting, and solid waste and sewerage management and work has been completed under the intelligent transport system, Bhopal Plus, and smart road projects.

Meanwhile, several cities have begun deploying smart technologies to efficiently provide civic services. Cities such as Hyderabad, Surat, Coimbatore, Bengaluru, Mangaluru, Delhi, Mumbai and Chennai have launched initiatives for the deployment of advanced communications systems, ITMS, smart meters, geographic information systems and global positioning systems for solid waste management, mobile-based complaint redressal systems, etc.

At the same time, several new smart cities such as the Gujarat International Finance Tec-City, Naya Raipur and Lavasa are already being developed as model cities through private sector participation. In addition, seven smart cities are under development as part of the Delhi-Mumbai industrial corridor.

As of March 2017, 16 public-private partnership (PPP)-based projects worth Rs 13.27 billion are under implementation and 46 PPP projects worth Rs 42 billion are at various stages of tendering. Efforts are also being made to mobilise funds through innovative financing models. A total of 94 cities have been accorded credit ratings to garner investor interest. Of these, 55 have a rating of BBB and above. Another noteworthy step (taken in February 2017) has been the introduction of the value capture financing (VCF) model. The globally used model is based on the government’s right to claim a part of the increase in asset value resulting from its investments.

There are, however, many issues and concerns that continue to slow down the uptake of projects. These include delays in the clearance and approval of projects, lack of coordination between different stakeholders, poor financial health of urban local bodies, and lack of investment in capacity building.

Going forward, 20 cities will be contesting for the remaining 10 slots under the SCM. These are Itanagar in Arunachal Pradesh; Biharsharif in Bihar; Diu in Daman & Diu; Silvassa in Dadra & Nagar Haveli; Kavaratti in Lakshadweep; Navi Mumbai, Greater Mumbai and Amaravati in Maharashtra; Imphal in Manipur; Shillong in Meghalaya; Dindigul and Erode in Tamil Nadu; Bidhannagar, Durgapur and Haldia in West Bengal; and Meerut, Rai Bareli, Ghaziabad, Saharanpur and Rampur in Uttar Pradesh.

 As the cities selected under the SCM are getting their act 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 the country fairly 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 private sector participation. For this to happen, however, the initial push has to be provided by government entities. Going forward, strong IT-enabled infrastructure and new-age cutting-edge technologies are imperative for the success of the mission.