Essel Infraprojects has suggested an overarching special purpose vehicle (SPV) to develop smart cities through a public-private-partnership model.

Kamal Maheshwari, President, Business Strategy, Planning and Business Development at Essar Infraprojects, said: “PPP is a very recognised approach. The smart city mission document also recommends it. We are saying the SPV can look at all aspects of project implementation including having a financial partner.

“This way, the Central and State governments’ contribution of ₹500 crore each plus the private partner’s contribution turns into ₹2,000 crore equity in the SPV, in turn enabling the entire project to raise another ₹8,000 crore.”

Such funding is required for smart city infrastructure building, he pointed out.

“We have got a very good response from most of the cities. They haven’t raised resources of this kind before, so they are quite keen to know about it,” he added.

Projects in hand Essel Infra is helping 43 cities to come up with smart city proposals, of which it is working very closely with five.

Owing to MoU clauses, Maheshwari did not name the cities. Of the 98 that were shortlisted for the second stage, 88 have appointed consultants to prepare a proposal.

The top 20 cities will be chosen by December and the first round of funds of ₹200 crore will be released by the Centre in the first year, followed by ₹100 crore each over the next three years.

Essel Infra is also pitching its integrated utility management company to the cities. “In many developed companies, there is some integration between power, water, broadband, waste management and others. Efficiency increases when it is done in an integrated manner,” said Maheshwari.

Cost-effective “The cost of such utilities will be 40 per cent lesser than what it is today,” he added.

However, while the cities do see some benefits, according to Maheshwari, regulatory hurdles remain at the State level.

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