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Mumbai: Peak-hour traffic snarls that take hours to clear. No space for vehicles to park. Pot holed roads that are periodically dug up, covered, dug up and covered again, with little or no coordination between local civic bodies and utilities that provide water, power and electricity.

Routine power outages and water shortages. Rudimentary sanitation. Rising pollution.

Those descriptions could apply to any big city in India, where demand for basic civic services has rapidly outpaced supply under the onslaught of ceaseless urbanization. By 2025, 69 metropolitan cities (each with a population of 1 million or more) will be home to 78% of India’s urban population, according to a study by McKinsey and Co.

The fact that cities are bursting at the seams is not lost on Prime Minister Narendra Modi’s government, which, on 29 April, signed off on a plan to create 100 “smart cities" and the rolling out of a new five-year urban development mission for 500 cities. The combined cost: 1 trillion.

Every one of India’s 29 states will get to develop one smart city, minister for urban development M. Venkaiah Naidu said on 7 May. Each city will get 100 crore every year for five years, once selected.

Naidu defined a smart city as one “...having the provision of basic infrastructure to give a decent quality of life to its citizens, a clean and sustainable environment and application of smart solutions, keeping citizens at the centre".

The 100 cities are to be selected through a competition in which cities will be graded on parameters, including revenue, expenditure, availability of infrastructure to support transport and solid waste management. The process of selection and development of smart cities will begin once the guidelines are sent to the states, Naidu said in Parliament.

To be sure, the project won’t be completed in a hurry (see here Implementation key to smart cities, say experts). Nevertheless, the concept of a smart city is already gaining traction in Asia’s third largest economy, with the states taking the initiative.

For instance, citizens of Bengaluru, also known as the Silicon Valley of India, can already walk into Mantri Mall in the Malleswaram neighbourhood, sit down at a kiosk and file a police complaint, regardless of where in the city a crime was committed.

The “smart" kiosk, which was put up in the mall five months ago by the state government and city police, has a touchscreen and virtual keyboard and uses high-definition video and audio to allow for an interactive live session with a designated police officer who sits in the traffic management centre—the technology centre of the Bengaluru traffic police.

A complainant can then sign, scan and print the document, and also review the complaint with an expert to ensure that the first information report (FIR) contains no errors.

The pilot project having proved successful, the Bengaluru city police now plan to install 100 more such smart kiosks in the city, according to Aamer Azeemi, managing director of Cisco Consulting Services. It was Cisco Systems Inc. that provided the technology and guidance for the project.

“The idea of this kiosk was inspired from the smart city of Barcelona, where we worked with the government to set up kiosks to bring government services to citizens—be it printing a signed copy of a birth certificate or any other such service," said Azeemi.

Cities in the race

Likewise, the Andhra Pradesh (AP) government has plans to develop 14 smart cities covering 13 districts of the state. These include Visakhapatnam, Vijayawada, Tirupati, Eluru, Guntur and Nellore. Cisco is helping the state digitize education and healthcare in the port city of Visakhapatnam.

The Maharashtra government, on its part, wants to showcase the Bandra-Kurla Complex (BKC) in Mumbai, India’s financial capital, as the “first brownfield (existing) smart city in India". Bids were opened on 3 December, and their scrutiny “is under process", according to the Mumbai Metropolitan Regional Development Authority, which set up BKC.

Both brownfield and greenfield (new) cities can be made smart with help from technology companies such as Microsoft Corp., International Business Machines Corp. (IBM), Cisco, Intel Corp., Dell Inc., Schneider Electric SE and Siemens Ltd.

The Surat Municipal Corporation (SMC) in Gujarat is partnering with Microsoft to transform Surat, the hub of India’s diamond trade, into a smart city.

Surat is the fourth fastest growing city in the world, with a population of 5 million and a business hub that processes 80% of the world’s diamonds and meets 40% of India’s demand for textiles, according to Milind Torawane, Surat’s municipal commissioner.

SMC is working with Microsoft and its partners to develop solutions for water management and urban planning (building plan approvals). Surat has already implemented several e-governance and citizen-centric solutions developed on Microsoft technologies, including those for property tax and revenue collections and material management.

Microsoft has also created a city dashboard that provides a customized view of key performance indicators for the city.

The Gujarat International Finance Tec-City, a government of Gujarat project that is developing India’s first global financial hub in partnership with Infrastructure Leasing and Financial Services Ltd, already has utilities like a district cooling system and automated waste collection system as part of the first phase of development.

Smart cities are also coming up from scratch in and around metros such as Palava in Mumbai and the Delhi-Mumbai Industrial Corridor (DMIC).

DMIC plans to develop seven greenfield smart cities in six states with backward integration to the dedicated freight corridor. These are Dholera in Gujarat, Dighi port city and Shendra in Maharashtra, the Pithampur-Dhar-Mhow belt in Madhya Pradesh, Khushkhera-Bhiwadi in Rajasthan, Manesar-Bamal in Haryana and Dadri-Noida in Uttar Pradesh.

Cisco is preparing an information and communications technology (ICT) master plan for four of the smart cities—Dholera, Shendra, Manesar and Khushkhera-Bhiwadi—and IBM is developing one for Dighi.

These plans involve the use of ICT to deliver to businesses and citizens services such as monitoring energy consumption, traffic visualization, improved water management and enhanced public safety.

Other examples include that of Schneider Electric India, which announced a partnership on 17 April with Essel Infraprojects Ltd (EIL) to develop smart city projects in India.

Transition point

There are pressing reasons why a country like India needs smart cities.

Cities are the engines of economic growth. While the urban population is currently around 31% of the total population in India, it accounts for over 60% of the gross domestic product (GDP). The urban population is projected to grow to 50% by 2050.

According to a 10 October draft concept note on the smart city scheme by the Indian government, the global experience is that urbanization up to 30% of the population is relatively slow, but the pace accelerates thereafter till it reaches about 60-65%.

India is at a point of transition where the pace of urbanization will speed up.

A typical smart city would take advantage of ICT and data analytics to improve the management of traffic, solid waste, energy, water and citizen services.

While smart transportation can reduce traffic congestion and air pollution with the help of parking meters and sensors, enhancing surveillance systems can reduce the crime rate and create a smart public safety system.

A smart city’s power distribution infrastructure would be built on smart grid technologies and integrated with power demand patterns and grid supply variations.

Utility companies typically send workers to collect data by reading meters, looking for broken equipment and measuring voltage. The concept of a smart grid involves the use of computer-based remote control and automation to gather such information about the behaviour of suppliers and consumers, which, in turn, improves efficiency and reliability, reduces cost and makes the production and distribution of electricity sustainable.

“For cities to be able to deliver true value, they need to be able to provide their inhabitants with the highest standard of living while ensuring sustained protection of the environment. Only cities which are able to reach this equilibrium will be capable of meeting today’s challenges and can look forward to a more sustainable future," said Sunil Mathur, managing director and chief executive of Siemens, which is working with the Indian government to install smart grid solutions “in multiple cities in India".

Similarly, while a smart city’s law enforcement agencies would be equipped with technology solutions such as surveillance, global positioning system (GPS) and vehicle telematics, a smart city’s police, traffic, hospitals and fire departments would work in a coordinated, integrated fashion for effective response in case of an emergency.

Consider Palava, another example of a greenfield smart city, for which the Lodha Group has a franchisee agreement with the Maharashtra State Electricity Distribution Co. Ltd for 24-hour electricity supply and solar panels powering street lights.

It also has a tie-up with General Electric Co. (GE) for 100% water recycling and automated water metering and billing, ensuring transparency and zero water loss.

The Lodha Group has also set up the Palava City Management Association with citizens as members to deal with day-to-day issues, as well as a 311 grievance helpline number and 911 emergency helpline number for citizens, apart from a mobile app.

Palava’s smart technology also extends to 500 surveillance cameras that capture real-time data and, in future, will support face recognition for entry and have panic alarms every 200 metres. A smart card given to all Palava citizens will allow cashless transactions at retail centres, access to bus service, public Wi-Fi within Palava’s premises, building and commercial points of entry, and information access from the Palava experience centre. It has partnered with IBM for the project.

Key pillars

Prashant Pradhan, director of the Smarter Planet Solutions unit at IBM India/South Asia, says “while the paths to become smarter may vary significantly for greenfield and brownfield cities, a consistent execution framework applies to both".

He added that smarter cities are built on the three pillars of “planning and operations, infrastructure and people".

“In a smart city, not only is each of these pillars infused with intelligence, but more importantly they work in an interconnected, integrated fashion to enable optimized decision-making and utilize resources efficiently," Pradhan said, adding, “a set of core foundational capabilities—namely data and analytics, systems of citizen engagement and sharing of investments, resources and expertise—will help India realize its vision."

And, most of all, smart cities would require high-speed Internet connections, or broadband.For instance, BKC’s project, christened Smart BKC 1.0, envisages 100% high-speed municipal Wi-Fi connectivity, 3,000 smart parking slots, 841 solar-powered street lights, CCTVs and analytics of the data they provide, and citizen apps.

But where will the Indian government get the money to finance these 100 smart cities?

Industry experts are unwilling to put a cost to the development of a smart city. Much will depend on the size of the city, its population, the amount of services needed and the time involved to implement the project, they say.

According to a May 2011 report on urban infrastructure by a high-powered expert panel that was set up by the ministry of urban development, India would have to invest 39.2 trillion over 20 years (between 2012 and 2031 at 2009-10 prices) in public works.

In an April 2010 report, McKinsey Global Institute estimated that India would require $1.2 trillion between 2010 and 2030 “just in urban infrastructure".

Of course, the state governments will be required to pitch in, and so will the private companies that are expected to sign public-private partnerships, or PPPs, with governments to develop the infrastructure.

“Significant investments will be required in urban transport infrastructure in the years to come. Public budgets will not be able to meet the needs fully," said O.P. Agarwal, executive director of the Punj Lloyd Institute of Infrastructure Management at the Indian School of Business (ISB) in Hyderabad.

“Therefore, alternative sources of financing will be needed. Towards this end, it should be recognized that the beneficiaries of urban transport systems, especially public transport systems, go beyond its users. Therefore, they should also contribute to the investments."

In a paper that appeared in the April-June 2015 issue of ISB Insights, Agarwal noted that lessons can be learnt from other parts of the world—such as imposing a transport tax like French cities do; levying a gasoline tax (also known as gas tax) like the state and federal governments do in the US; implementing the concept of land value capture (example: property owners close to a newly-constructed metro system see a rise in value of real estate, and some part of the increased value could be ploughed back to finance the related investment); and additional vehicle registration fee—like in Singapore.

“Financial resources will not be a constraint to building urban India if there is a willingness to look at innovative ways of financing it as well as adopting policies that discourage sprawl," Agarwal concluded.

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