Interview with Kunal Kumar

“The pace of implementation of the mission has increased significantly in the past one year”

Over the course of the past two and a half years, the Smart Cities Mission (SCM) has gained momentum. New projects have been sanctioned, technology penetration has increased and the role of the private sector has evolved. In an interview with Indian Infrastructure, Kunal Kumar, Joint Secretary and Mission Director, Smart Cities, Ministry of Housing and Urban Affairs (MoHUA), shares his views on the progress made under the SCM and the road ahead…

How do you assess the progress made under the SCM in the past year? What are the targets and timelines?

The mission covers 100 cities that have proposed 5,000 projects worth Rs 2 trillion. As of September 20, 2019, over 3,700 projects worth more than Rs 1.42 trillion have been tendered, work orders for 3,100 projects (Rs 1 trillion) have been issued and 1,100 projects (Rs 200 billion) have been completed. Mission cities have successfully expedited work on key projects – integrated command and control centres (ICCCs) are being developed in 73 cities and are currently operational in 24 cities; smart road projects in 84 cities (completed in 32 cities); smart solar projects in 62 cities (completed in 24 cities); smart water projects in 71 cities (completed in 28 cities); smart wastewater projects in 61 cities (completed in 14 cities) and public-private partnership (PPP) projects in 66 cities (completed in 28 cities).

The pace of implementation of the mission has increased significantly in the past one year in terms of physical progress.

The perception regarding the age of the SCM being 4.1 years at present also needs to be corrected. While the mission was launched on June 25, 2015, 100 cities were selected in five rounds spread over two and a half years from January 2016 to June 2018. Given that every city gets 60 months to complete its projects, the total mission duration for 100 cities is 6,000 “city-months”, of which the cities have spent only 3,360 city-months working on their projects so far. This is only 56 per cent or 2.8 years and not 4.1 years.

Taking the mission age of 2.8 years (instead of 5 years), performance under the SCM (till August 2019) – 67 per cent of the total projects have been tendered; work orders issued for 45 per cent; and 8 per cent of the total projects have been completed.

The SCM is proving to be a game changer. Not only is it directly improving citizens’ lives, it is also contributing to transforming the country into a digitally empowered society and a knowledge economy. It is setting a template for future development, establishing new institutions and concepts and developing institutional and professional capacity to make Indian cities cater to citizens’ needs in the best possible way. The mission is building capacity for cities to think strategically about urban development.

The mission has promoted key enablers for the performance of a smart city: smart governance, improved urban finance, capacity building and technology-driven innovation. The SCM leverages information and communications technology (ICT)-based technologies and digitalisation to make governance citizen friendly and cost-effective; bring about accountability and transparency; provide online services; form e-groups to listen to people and obtain feedback; and use online monitoring of programmes and activities with the aid of online tools.

The SCM addresses barriers in data-driven governance through “DataSmart Cities”, an evolving policy framework on data for smart cities, that aims to be a catalyst for the entire ecosystem comprising people, processes and technology. Cities such as Pune and Surat have started publishing data sets through city data portals. The SCM intends to unlock civic data for all 100 cities. Making urban local bodies (ULBs) financially self-sufficient is very important for sustainable development. The MoHUA started credit rating of cities, and this has been completed in 465 cities. The ministry has incentivised ULBs through a cash incentive of Rs 130 million for every Rs 1 billion of municipal bonds issued, equivalent to a 2 per cent interest subvention. So far, eight cities have raised Rs 34 billion through municipal bonds.

There are a number of other initiatives that will impact the way we design, construct and manage our cities in the future such as sustainable financing, the Smart Cities Fellowship and Internship Programme, the open data policy, the Indian Urban Data Exchange, the National Urban Innovation Hub, and the Data Maturity Assessment Framework, to name a few.

Which cities have fared better than others in terms of urban infrastructure creation?

It is always difficult to single out cities in terms of performance. They are all doing their best within the limits of geography, capacity and resources that they have to deal with. Depending on their strengths as well as priorities, different cities excel in different areas. Some cities have more challenges than others. For some cities, their size and geographic location also affect their capacity to implement projects. Smaller and remotely located cities like Guwahati and others in the north-eastern region find it difficult to get reputed companies to come and bid for projects.

The MoHUA introduced the India Smart Cities Awards Contest (ISAC) to evaluate and encourage excellence in cities. The following cities won awards in last year’s ISAC, and this could perhaps give you some idea, though not conclusively, of which cities are doing better: Pune, the New Delhi Municipal Council, Visakhapatnam, Jabalpur, Bhopal, Jaipur, Coimbatore, Ahmedabad and Surat. This year’s ISAC results will be announced soon.

At the risk of stating the obvious, one of the most important factors affecting the performance of a city is the special purpose vehicle’s (SPV) capacity to deliver. Implementation of smart city projects is a complex activity and spans the pillars of social, economic, infrastructural and institutional development. SPVs that are led by experienced and committed teams, like any other organisation, are more likely to perform better. Support from the municipality and the state government is also of vital importance. We are working closely with them to see how implementation challenges can be addressed. We are bringing together diverse skill sets from multiple ministries, state governments, multilaterals, bilateral funding institutions, expert organisations, and other ecosystem partners who specialise in sector-specific initiatives to build capacity in local governance.

What are the smart technologies and digital solutions being deployed?

ICT-enabled smart solutions, with an aggregate investment of around Rs 389.14 billion, will provide city-wide benefits.

  • ICCCs: Twenty-four ICCCs are now operational and are helping cities in better urban planning and management. They function as a single source of information and point of resolution of civic functions of the city. ICCCs are using technology for effective monitoring and management of city functions and bringing transparency through information sharing which is a step towards becoming an inclusive city.
  • While rolling out pan-city ICT programmes, initiatives have been taken by cities for ensuring safety and security of citizens, especially women and elderly people. 24×7 monitoring through CCTV cameras across the cities where smart city centres are already operational has resulted in a significant reduction in cases of eve-teasing, chain snatching, bag snatching and vandalism.
  • With solid waste, we are not just removing waste from people’s homes but using innovative ways to ensure that the collected waste does not become a source of pollution somewhere else. Many cities are setting up sewage treatment plants and treated wastewater is being used for augmenting waterfronts, water sports facilities and for other purposes. There are a range of projects taken up under the mission involving e-toilets, sensor-fitted and underground trash bins, waste sorting facilities, suction machines, GPS-enabled waste transportation vehicles, supervisory control and data acquisition systems, smart meters, etc., which are making cities cleaner.

There are several other initiatives under the mission that directly contribute towards realising the full potential of technology interventions and innovation ecosystems in cities such as the DataSmart Cities Strategy: Empowering Cities through Data; the Data Maturity Assessment Framework; the Ease of Living Index 2019: Assessment Framework; the Municipal Performance Index 2019: Assessment Framework; Climate Smart Cities: Assessment Framework; the National Urban Innovation Hub; etc.

What is the total investment requirement for the SCM and what are the new sources of funding being explored?

The 100 cities under the mission have proposed the execution of 5,151 projects worth Rs 2.05 trillion in five years from their respective dates of selection. Financial innovation is built in the design of their capital investment plans. The mission aims to sufficiently empower cities so that they are not dependent on government funding. Its success can be seen in the fact that government funding is only 45 per cent and the rest is raised through other means including international bilateral/multilateral organisations.

Cities are exploring opportunities to generate additional revenues for funding urban infrastructure projects through municipal bonds, PPPs, loans/debt from multilateral agencies, and especially by the implementation of value capture financing tools such as land value tax, fee for changing land use, development charges, transfer of development rights, vacant land tax, tax on incremental financing, town planning schemes, betterment levy, impact fees, land pooling systems, etc.

PPPs are an increasingly popular mechanism for funding smart city projects. Cities are encouraged to enhance their own source revenues through raising municipal bonds, property taxes and advertisements, and take up initiatives such as reduction of non-revenue water.

What has been the experience of private players in the urban infrastructure sector so far? What specific measures are planned to accelerate private participation in the SCM?

If the success of the PPP model in the mission (that accounts for one-fifth of the value of projects) is any indication, private players’ experience must be positive. I am approached by so many private players – from large multinationals to start-ups, NGOs and investors wanting to work with us. There is a sense of optimism and positive energy about the mission that makes our cities attractive to not only industry and private players but to all other sections of society. With a quadruple helix approach, we are working towards creating an ecosystem to break down the traditional silos of government, industry, academia, and civil participants, bringing multidisciplinary viewpoints together in an environment that promotes collaboration and the sharing of ideas. By working together we can create new shared value that benefits all participants in what becomes an innovation ecosystem.

Smart city plans submitted by the 100 smart cities envisaged investments of Rs 410 billion from PPP projects. This is 21 per cent of the total proposed investments of Rs 2.05 trillion under the mission. Of the total tendered projects of Rs 1,429.19 billion, PPP projects account for Rs 231.92 billion, which is 16 per cent. The share of PPP projects in total projects under implementation is about 15 per cent. There has been notable success in PPP projects in segments such as affordable housing, stadiums, waste-to-energy (WtE), solar rooftops, public bike sharing, parking management, smart cards, transport hubs, etc. The progress of PPP projects has not been limited to big cities only, but has been successful in smaller towns as well.

What are the key challenges that remain unaddressed? What are some of the strategies needed to overcome these challenges?

The SCM marks a paradigm shift in the thinking on urban development. We are doing things for which we do not have templates or standard procedures chalked out. As a result, we have had to learn on the go, as to how to get things right. I must say that we have done well in overcoming the challenges. We can summarise the challenges faced by us under the mission in three buckets – learning to do things that have not been done before, addressing the complexity, and building the institutional capacity to deliver smart city projects.

There are some challenges that come in the way of achieving sustainable economic growth:

  • Improving local governance and financial sustainability: Local governments with the capacity to make timely and effective planning and management decisions and generate enough internal revenue can work better to renew infrastructure and have creditworthiness to access the capital markets.
  • Appropriate planning based on evidence-based decision making: This leads to sustainable land use and transport patterns. Cities need modern planning frameworks, adaptable master plans and zoning regulations to make the best use of the land available, and allow cities to grow in accordance with changing needs. An enormous amount of data is available that can be leveraged to make better decisions.
  • Enhancing the quality of service delivery: Services like water and power supply and supporting infrastructure need to be improved with our people’s improved technical capacity. The quality of services needs to be of a certain standard.
  • Better preparedness to address climate change: Cities are the prime contributors to the deteriorating urban environment, which is taking a toll on people’s health and productivity and diminishing quality of life. This needs to be reversed by incorporating climate resilience into urban development.

What is the outlook for the urban infrastructure sector for the next one-two years?

Our cities have not only faced years of under-investment in infrastructure but also a flawed approach towards development – project-based planning and physical progress-centric monitoring. This is changing with the success in the implementation of the SCM. Outcome-oriented integrated planning, instead of the earlier project-based approach, will become increasingly visible. Integrated planning will require thinking of the entire city as one unit. Social, environmental and economic outcomes will become a measure of success of any component of development, instead of just physical or financial progress.

More budgetary allocation for urban infrastructure may be seen in the future. We are at an estimated per capita capital spending of $17 as against $116 in China. This is severely deficient when we consider the fact that 70 per cent of our GDP will be generated in cities. However, government funding is expected to go to cities that perform well and deliver the desired outcomes.

About 68 per cent of the country’s urban population will be of working age by 2030. Therefore, our approach to manage urbanisation should be able to covert this challenge into an opportunity, and hence will require the socio-economic infrastructure to tap the potential of its demographic advantage. We need to have equitable and inclusive urban development, which is outcome-based, participatory and data driven.

In my view, the following key areas are likely to see increased attention in the near future:

  • Water security: This is high on the government’s agenda, as evidenced by the launch of the Jal Jeevan Mission. For urban areas and ULBs it will mean that water will need to be conserved, reused and recycled, so that water stress can be minimised. Infrastructure will need to be created for efficient treatment of grey water and supplied for non-drinking purposes, both industrial and agricultural.
  • Ease of living: The areas of focus will include transport infrastructure, sewerage and septage management, scientific solid waste management, piped and metered water supply to make cities more attractive for people to live, work and play. Our smart cities are leading the way with demonstrable projects in areas like WtE, segregated waste collection, efficient street lighting, solar rooftop plants, public bike sharing, green buildings, etc.
  • Housing: The government is on a mission to provide a pucca house to every family by the time the country completes 75 years of Independence. The focus will be to make housing available to all in urban areas through ownership and rental modes and improve lives of people in informal settlements. The year 2019-20 was declared the Construction Technology Year.
  • Economic growth and innovation: Cities are and will continue to remain the engines of economic growth. We need a strong culture of entrepreneurship, so that more jobs and livelihoods are created. Indeed, the mission has started the spade work by launching DataSmart Cities as part of the strategy to solve urban issues through evidence-based decision making. About 50 ICCCs will be operational by end-2019. The SCM is proposing a new scheme to transform 100 cities into innovation zones. The scheme will work in collaboration and coordination with flagship programmes such as the SCM, the Atal Innovation Mission, Startup India, etc., with the objective of embedding and facilitating the use of data-driven planning and decision-making in city governments and enabling uptake of innovation by ULBs through experimentation and pilot projects.

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