In the first round of the Smart Cities Mission challenge in January 2016, 20 cities qualified. According to a statement from the ministry of urban development, it is intended to develop 26,735 acres as smart cities with investment of 50,802 crore over five years. The second round has begun and 54 revised smart city proposals (SCPs) are expected by June 2016. It is time, then, to look at key factors to create winning smart proposals.

The right approachLearning from international experiences : The SCPs should review the best practices worldwide and identify cutting edge solutions for local problems. These should be customised to meet local requirements. For instance, more than 500 cities across the world run public bike sharing systems. Hanzhou Public Bicycle in Hanzhou (China), Velib in Paris (France) and Citibike in New York (the US) are among the successful models. These examples demonstrate a seamless automated ticketing system, integration of bicycle docking stations with public transport systems, uniform coverage of the city, and viable business models to attract private investors and operators.

Another example is how cities are using internet of things (IoT) and setting up operations centres such as the CISCO IoT model in Barcelona, and the Songdo and IBM centres in Singapore and Rio de Janeiro, respectively. These interventions have helped cities better manage their operations and generate business intelligence for connected communities through urban data analytics.

Taking a business case approach : The SCPs must be looked at as business plans. Government grants should be used as seed money in order to catalyse developments. In the longer term, returns should be generated to take up new smart city projects across the city. Essentially, every proposal should be financially viable. Innovative mechanisms of financing such as charging premium on extra floor area ratio (FAR), developing realty projects, leveraging infrastructure bonds and enhancing tax revenues need to be explored. Greater emphasis is required to develop suitable projects and revenue streams that are attractive to investors and banks, and also cross-subsidise less commercially viable projects.

For instance, Indore proposed to leverage nearly ₹3,500 crore from the private sector to implement its proposal which highlighted a premium on additional FAR and proceeds from real estate development as major sources of revenues. Over the project lifecycle, the proposal anticipates generating surplus revenues that could be deployed for new projects across the city in future.

Innovation and collaborationInnovation in problem-solving : In order to transform an area into a world class facility, India requires greater financial resources and access to technological innovations. Decision-makers need to innovate on solutions which are incremental in nature and build on existing resources. For example, inspired by Lee Kuan Yew’s vision, Singapore has been transforming itself into an intelligent metropolis to foster an economically vibrant, livable and healthy environment for its residents. In this direction, Singapore implemented Singapore ONE as a collaborative initiative over decades for universal access to broadband. This now acts as the backbone of a thriving online business.

Ideally, the innovations should lead to a reduction in the cost of service delivery and generate more savings. For instance, Bhubaneswar proposed to develop a multi-modal hub around the railway station on a transit-oriented development principle. Jaipur proposed night markets for tourists to increase their duration of stay from 2.8 days to 3.5 days and in turn increase the contribution of the tourism sector in the city’s GDP from 13.6 per cent to 15 cent. In terms of implementation, the special purpose vehicle (SPV) should be delegated autonomy to ring-fence funds, functions and functionaries to develop and manage the smart city projects.

Collaborations with the private sector : Smart cities need to go beyond convention and explore collaborations with the private sector. Global collaborations should aim to attract investments and technologies. Local collaborations should aim at creating local buy-ins and sponsorships to improve the business environment. A market-research exercise should be carried out during the proposal preparation stage, too.

For instance, the Pune Municipal Corporation entered into memorandums of associations with the National Association of Software and Services Companies (Nasscom), Centre for Development of Advanced Technologies (C-DAC), Microsoft and CISCO Systems for developing ICT solutions; with the Cities Development Initiative for Asia (CDIA) and World Resources Institute (WRI) for project structuring and development, with KPIT Technologies for intelligent transportation system (ITS) and electric buses, and so on.

Participation mattersCitizen participation and endorsement : A successful proposal should be well communicated, discussed, and debated. The proposed solutions must represent the aspirations of citizens and stakeholder groups. A well thought through citizen engagement strategy customised to local requirements is a must. The key is to engage with the widest range of citizens in a sustained manner. The Pune Municipal Corporation carried out an extensive citizen consultation process with nearly 50 per cent of Pune’s households spread over nine phases. The consultation followed the 5S principle of speed, scale, structure, solution and social audit.

A strong partnership between Local, State and Union Government : In the Indian ecosystem, several decisions have to be made at various levels of government based on jurisdiction. Good relationships and understanding between various government departments will increase the credibility of the proposals and ultimately help fast-track project implementation. The Bhopal Municipal Corporation forged a strong partnership with the State government to utilise government land for area-based development. A transit-oriented development guideline was also endorsed by the State government to support land-use transport integration. Further, the Centre organised handholding events such as Ideas Camps and Innovation Fridays.

The Smart Cities Mission has empowered cities to take the lead and demonstrate their ability to attract investments in the urban development sector. It is time for cities to innovate different avenues that could transform cities and generate more economic opportunities.

The writer is MD and CEO of YES Bank

Related Topics
comment COMMENT NOW