We have tendered out 3,800 projects worth Rs 1,380 billion
Real Estate

We have tendered out 3,800 projects worth Rs 1,380 billion

Kunal Kumar, Joint Secretary & Mission Director (Smart Cities Mission), 
Ministry of Housing and Urban Affairs, Government of India

The Smart Cities Mission (SCM) is proving to be a gamechanger in Indian urban transformation. “This is a unique mission, working to rejuvenate the mind, body and soul of Indian cities!” affirms Kunal Kumar, Joint Secretary & Mission Director (Smart Cities Mission), Ministry of Housing and Urban Affairs, Government of India. He goes on to add that it is arguably the largest and most complex urbanisation initiative on the planet, catalysing investments of Rs 2 trillion for the development of 100 smart cities.Kumar shares more about the achievements of the mission and the opportunities ahead, in conversation with SHRIYAL SETHUMADHAVAN. 

You have been closely involved with the SCM since inception. In terms of targets and achievements, how would you rate it at present?
Completed projects are already contributing to improvement in quality of life in cities withsmart solutions integrating infrastructure and services. The SCM is transforming the country into a digitally empowered society and 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. Cities are developing the capacity to think strategically about urban development. The mission is creating an environment to leverage the power of communities and bottom-up planning and technology to enable the creation of connected, liveable, energy-efficient, adaptive and resilient cities. It involves three key elements: Upscaling economic opportunities and efficiencies through innovation and entrepreneurship; evidence-based policy and decision-making and governance focused around data; and capacity building of all stakeholders.

Of the 5,000 projectsthat 100 cities had proposed, we have tendered out 3,800 projects worth Rs 1,380 billion; grounded 3,000 projects worth Rs 940 billion; and competed 1,000 projects worth over Rs160 billion. This is only one aspect of what the mission has achieved. Remaining projects are expected to be tendered out by March 2020.

The mission has promoted numerousinnovative and first-in-India projects. Some examples are:

Integrated command and control centres (ICCCs): Theseare being built in all the 100 mission cities. Twenty such centres are already operational. ICCCs function as a single source of information and point of resolution for all civic functions. They contribute tomaking cities safer and liveable through efficient management of urban services and better governance and decision-making.

Addressing the needs of citizens through innovative solutions: Some examples aree-toilets that are self-cleaning and unmanned in Faridabad;DigiThane, an online platform to connect residents with government;mobilepublic toilets for women by converting old city buses in Pune;Oxy Reading Zone Raipur, a public library in a green zone with Wi-Fi connectivity;the Integrated Traffic and Mobility Administration Centre in Surat;smart classrooms in NDMC schools;and bio-methanation plants for sustainable waste treatment; to name a few.

Promoting a culture of entrepreneurship across the 100 cities:SURATiiLAB provides a platform for innovation, research, start-up incubation, trade facilitation andskill development. B-Nest Foundation in Bhopal is supporting start-ups in several different sectors and over 30 start-ups from sectors including waste management, home automation, agri-tech, IOT, autonomous vehicles, healthcare, digital marketing, drone surveillance and fin-tech are operating out of the facility. 

The mission intended to catalyse investments of around $30 billion into the 100 smart cities in a period of five years. Where do we stand in terms of achieving this target?
SCM was launched on June25, 2015. Thereafter, 100 cities were selected in five rounds. Although it has been four years since the launch, the effective ‘Mission Age’ is only two years and eight months. This is based on the fact that each city gets 60 months to complete implementation—all 100 cities get 6,000 city-months. So far, a total of 3,394 city months have been utilised from the total of 6,000.

Thus, with the Mission Age as above, the performance of SCM (as on August22, 2019) is as follows:
Tendered: 67 per cent of total projects
WO issued: 45 per cent of total projects
Completed: 8 per cent of total projects

The cities are expected to complete their projects as per the following schedule:

As mentioned, more than 5,000 projects for over Rs 2 trillion are at various stages of implementation. The increase in the pace of implementation can be seen in the graphs below.

When you were municipal commissioner of Pune, several innovative concepts and ideas were incorporated in the city’s SCM vision. Any innovative concepts you would like to share for cities to adopt?
Pune is among the first 20 ‘lighthouse cities’ selected in Round 1 of the Smart City Challenge. As the municipal commissioner, I have led the implementation of many innovative projects in the city. Pune is one of the first cities to build the ICCC and link all public services through this centre. Dilapidated and limited use sites have been transformed into areas of activecitizen participation through several placemaking projects. Other innovative projects include public bike sharing, public Wi-Fi hotspots,an integrated traffic management system (ITMS), street redesign and LED lighting, solar rooftop installations and ‘Ti’ restrooms exclusively for women by renovating old city buses. Pune Idea Factory Foundation (PIFF), a subsidiary of Pune smart city, is boosting the start-up ecosystem and driving the innovation agenda.Hackathons in partnership with NITI Aayog and the City of Austin, Texas, have been conducted on issues in urban governance,urban mobility, citizen safety and security, health, solid waste management and digital connectivity. As a result, 72 start-ups were funded between 2014 and 2016with capital of$435 million. PIFF raised over $250 million in 2016, considered a‘winter year’ for the start-up ecosystem.
Other smart cities have also implemented similar innovative projects adapting the concepts to their own context.The mission is also engaged in preparing and disseminating knowledge publications to document success stories so that smaller cities can emulate the success achieved by lighthouse cities like Pune.

In your current role, you are responsible for the nationwide implementation of the SCM. What are the challenges you face?
I firmly believe cities need to be built around communities and that we must use technology as a means, not an end—in a way that helps create inclusion and support bottom-up innovation. My focus is on empowering cities to achieve sustainable economic growth so that they become more liveable and safe, with clean air, adequate infrastructure, reliable utilities, and opportunities for learning and employment. Indeed, there are some challenges that come in the way of achieving that growth. Key areas I have been focusing on while leading the mission are:

  • Improving local governance and financial sustainability: Local governments with the capacity to make timely and effective decisions for planning and management and generatingenough internal revenue can work better to renew infrastructure and have credit-worthiness to access capital markets for funds. 
  • Appropriate planning based on evidence based decision-making: It leads to sustainable landuse and transport patterns. Cities need modern planning frameworks, adaptable master plans and zoning regulations to make the best use of availableland, and allow cities to grow in accordance with changing needs. Enormous amount of data is available that can beleveraged to make better decisions.
  • Adequate transport and infrastructure: Urban transport planning needs to be more holistic with the focus on meeting the needs of the large numbers of people who need to reach their homes and work quickly and safely rather than on moving vehicles. Similarly, other infrastructure to support urban services, such as water and power supply, sewerage, air, water, and surface mobility, is either inadequate or dilapidated or bothin most cities. This needs to be addressed in an integrated manner.
  • Enhancing the quality of services delivery: Services like water and power supply and supporting infrastructureneed to be improved with our people’s improved technical capacity. Quality of services needs to be of a standard that can make a definitive contribution to the economic development we are aiming for. 
  • Better preparedness to address climate change: The threat of climate change has put the existence of the human race at risk. 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.

We have launched several initiatives as mentioned earlier that directly or indirectly address these challenges with innovative solutions.

It’s well-known that most municipal corporations in India have a limited source of income or fund generation. What could be the most viable means of raising funds for the cities?
Bonds are a viable option and have been used extensively in the US and Europe. Total bonds issuance in Indiabetween 1998 and 2010 was Rs 15 billion, including taxable and tax-free bonds and pooled financing issues. In July 2015, SEBI notified a new regulatory framework to issue municipal bonds in India and credit ratings were done for over 400 cities. Since 2017, eight cities have come forward to raise bonds worth Rs 34billion. This includes Pune Municipal Corporation, whowas the first to issue municipal bonds worth Rs 2 billion; Greater Hyderabad Municipal Corporation, who issued bonds worth Rs 2 billion; Indore,with Rs 1.40 billion; Amaravati, whoraised a whopping Rs 20 billion; Bhopal Municipal Corporation with Rs 1.75 billion;and Ahmedabad Municipal Corporation with Rs 2 billion. As per industry estimates, municipalities are likely to raise Rs 150 billion overall by 2023, of which Rs 60 billion is likely to be raised through municipal bonds within the next three years.

While issuance of bonds is a welcome move, cities will have to diversify the sources of financing. Many have identified projects on PPP model and several projects worth Rs 230 billion have been tendered out, of which work orders have been issued for projects worth Rs 125 billion, with over Rs 30 billion completed. 
Cities also need to look into ways to use existing powers and structures more efficiently. They can increase internal sources of funds through increasing property tax, advertisement tax and user charges for delivering urban services. Value capture financing tools also need to be considered while planning redevelopment and expansion of urban areas.

You recently spoke of plans to launch the Smart Cities Data Challenge for cities….
With the deployment of IoT devices, sensors and other methods to ‘sense’ the city, thesources and size of the data generated in a city are increasing every day. DataSmart Cities are those that havesuccessfully imbibed a culture of data awareness and usage in their functioning. The envisaged outcomeof becoming ‘datasmart’ is to bring greater efficiency, accountability and transparency in city governancedecisions while fostering civic engagement, co-creation and innovation in problem-solving. 
The DataSmart Cities strategy lays down the tenets of a Data Maturity Assessment Framework (DMAF) to be implemented through self-assessment. Detailed guidelines have been finalised by MoHUA. The objective is to encourage cities and assess their readiness against the three foundational pillars of People-Platform-Process, while combining the dual objective of robust processes and intended outcomes. The Smart Cities Mission Directorate intends to initially implement the DataSmart Cities strategy for the existing 100 smart cities, which will become lighthouses for all other cities and towns across the country that aspire to emulate a paradigm of data-driven governance. The goal of DMAF is to enable a healthy competitive spirit, which will further drive cities to empower themselves with relevant and necessary technical and functional guidance with the basis of peer learning, to help all cities become datasmart.
The first cycle of DMAF, which was launched on May 6, 2019, has been successfully completed and we shall release therankings for this cycle of assessment.As it is the first time a data readiness assessment has been done, which involved a lot of pre-preparation, the first cycle is intended for cities to attain a basic certification level. As DMAF is not a one-time activity, cities should look forward to improving their data-related capabilities to achieve the required certification levels and be more ‘data ready’.

In what proportions are the various verticals under the SCM represented in proposed projects?
The smart city proposals have been prepared after a lot of consultation with stakeholders, including citizen groups. Therefore, all sectors have appropriate representation commensurate with the priorities of citizens. Maximum value of projects has been proposed inarea development, followed by urban transport, water supply, housing and IT connectivity and digitisation, in that order. The graph below depicts the cost-wise breakup of proposed projects by sectors.

Are there any weaknesses or challenges faced by city officials in project execution and management? 
Traditionally, project execution and management have been a challenge in Indian cities owing to lack of technical and administrative capacities of ULBs. Thus, to ensure operational independence, autonomyand greater speedin decision-making and execution, the SCM has constituted an SPV in every smart city, with a full-time CEO and a board, with the responsibility to plan, execute and finance projects. The mission provides for specific powers vested with the local bodies, urban development departments/municipal administration/local development departments to be delegated to the CEO and SPV Board. Matters that require the approval of the state government are delegated to the state-level High Powered Steering Committee (HPSC) for smart cities. A programme of this scale and complexity requires a multidisciplinary team and effective coordination with multiple stakeholders to plan and execute projects within the defined timeframe. Thus, SPVs need technical, administrative and financial support from ULBs and state government agencies. The mission directorate is constantly engaging with the city SPVs, state governments and ULBs to provide timely advice and support to smoothen out project execution and management.

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