By announcing 100 smart cities as part of its manifesto and then in the Union Budget, the NDA has staked its claim on the second big idea after its first - the Golden Quadrilateral (GQ). While the GQ project trotted along during the previous NDA regime, it broke into a canter during UPA 1, fell into a slumber by UPA 2, and was finally completed in 2012. Just as the need to connect commercially vibrant cities, which then led to connecting the hinterland through the PMGSY, was an idea with great payback as it fuelled trade, the smart cities project is supported by strong economic reasons.
Today, 70 per cent of our GDP comes from urban areas while the investment for urban development is only 0.70 per cent. Now, according to the McKinsey Global Institute (MGI) report, India´s urban population is projected to increase from 34 crore in 2008 to 59 crore in 2030. With already 53 cities having a population of over 1 million - slated to grow to 68 in 2030 - the need to plan and manage services to take care of a density of 12,000 people per sq km is daunting. Further, according to a High Powered Expert Committee (HPEC) report in 2012, the estimates for urban infrastructure in the eight core services of water supply, sewerage, solid waste management, storm water drains, urban roads, urban transport, street lighting and traffic support infrastructure amount to Rs 39.2 lakh crore over 20 years. In addition, the HPEC has estimated Rs 19.9 lakh crore towards operation and maintenance over the 20-year period.
With such a high demand on financial resources, planning needs to be brought centre-stage. Hence, the concept of smart cities encourages debate and thought with regard to the planning of future cities in India. With a mission of maximum efficiency of resources, technology becomes a natural partner. The most modern and wired smart city under construction, the $35-billion Songdo, being built on 1,500 acre, 64 km south of Seoul, is the largest private real-estate development in the world. Scheduled for completion in 2017, virtually Songdo´s all buildings will be LEED-certified, with computers and sensors placed in every building and along transportation networks to evaluate and adjust energy needs and consumption.
Although the Ministry of Urban Development is yet to give out details of the planned 100 smart cities, seven are being planned under the 1,483 km Delhi-Mumbai Industrial Corridor (DMIC). Some others like Naya Raipur, GIFT city, Kochi City and Palava are also moving in tandem. The sustainability of such planned smart cities is even more important and, therefore, the economic rationale behind the establishment should remain core to the development.
Contracting companies have suffered a huge setback under UPA 2 as they have been choked of funds, either owing to disputes over contracts or delays in execution because of lack of government clearances. This has resulted in the valuation of these companies taking a beating. After the elections, the valuations have improved; however, performances have a long way to go. Jaiprakash Associates has decided to cut debt and been selling assets like cement and hydropower projects and some others like HCC, Gammon and IVRCL have taken the CDR route and restructured debt. The good news is that some companies have actually managed to enhance performance as our last cover story, ¨Top 16 Challengers¨, showed. This month, we bring you our much-awaited ¨Most Admired Companies¨ issue, which serves as a reflection of the faith in companies owing to their ability to offer growth because of their past track record. However, it remains to be seen which companies manage to retain the faith by implementing smart financial engineering and project execution.
Today, 70% of our GDP comes from urban areas while the investment for urban development is only 0.70%.¨Participate in www.SmartCitiesSummit.in and get a firsthand account of the opportunities.
Participate in www.SmartCitiesSummit.in and get a firsthand account of the opportunities.