Funding a huge challenge for smart cities’ development, says Deloitte

Meeting huge funding requirement and acquiring land to create new smart cities will be a major challenge for the Central and State Governments as well as local administration, according to a senior executive with global consultancy services provider Deloitte Touche Tohmatsu.

Arindam Guha, Senior Director, Deloitte Touche Tohmatsu (India), who specialises in areas of industrialisation and creation of smart cities, said that by December, the Central Government’s move to develop 100 smart cities will get further crystallised from concept to taking the initiative further with participation of States.

Speaking to BusinessLine , Guha said the Government has decided to deploy about ₹6,00,000 crore for development of smart cities, which is by no means a small amount, but the funding requirement for the smart cities is expected to be pretty huge, requiring not just Central and State Government and local body funding, but a big role to play by the private sector as well, through public private partnership projects.

The Centre is looking at a funding mechanism similar to that of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). That augurs well, but needs a tightly knit approach in terms of funding various aspects of developing the smart cities, he said.

“If you look at the opportunity and the investments required, we would be better off first focussing on existing cities and brownfield development while working on Greenfield cities. The development of an existing city into smarter cities could be achieved faster and at a much lower investment outlay,” he said. Referring to the Delhi Mumbai Industrial Corridor and Chennai-Visakhapatnam corridor, he said these would provide the first new smart cities in the country as they are starting from the beginning.

Typically, each smart city would have population ranging from about 4 lakh and be about 40-50 km from, say, a manufacturing hub or any other industrial centre. The concept of smart city is pretty wide which has a mix of industrial development, close to an urban area with high quality governance that facilitates ease of doing business.

Various other elements that fit into such cities include IT-enabled mechanism for transactions, energy efficient network, water and solid waste management facilities and quality public transport network.

There is a larger plan in developing industrial corridors such as Chennai to Vizag. It would be later extended from Vizag to Kolkata and possibly beyond borders, he said.

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