Smarter partnerships will create Smart Cities

10-Feb-2016 #Digital India Source: India inc

As many as 300 million people will move into India’s cities over the next two decades and the stage is set for investors to cash in on making these cities smarter to meet the influx.

The Indian government has announced the first set of 20 cities to receive funds as part of its Smart Cities Mission out of a total of 98 to be commissioned over the next few years.

Of the 98 cities and towns that five years down the line will graduate into Smart Cities, 24 are capital cities, another 24 are business and industrial centres, 18 are culture and tourism influenced areas, five are port cities and three are education and health care hubs.

Smart Cities Essentials

  • Adequate water supply
  • Assured electricity supply
  • Sanitation, including solid waste management
  • Efficient urban mobility and public transport
  • Affordable housing, especially for the poor
  • Robust IT connectivity and digitalisation
  • Good governance, especially e-Governance and citizen participation
  • Sustainable environment
  • Safety and security of citizens, particularly women, children and the elderly
  • Health and education

The urban development ministry has highlighted the central role to be played by Special Purpose Vehicles (SPV) as the key administrative bodies for Smart Cities to ensure smooth execution of these projects. Urban Development minister M. Venkaiah Naidu has also spelt out the important role to be played by private investments in this nearly $110-billion opportunity.

Of the 20 shortlisted cities, at least 10 of them have already begun fine-tuning there public-private-partnership options worth nearly $1.3 billion. India’s central government has committed around $15 million per chosen cities every year but the overall cost of a city will vary based on the level of ambition and capacity to execute. This is where public and private sector firms from around the world will come into play.

According to McKinsey, 70-80 per cent of Indian cities are yet to be built and billions of dollars of global capital are available.

But as US Deputy Secretary of Commerce, Bruce Andrews, pointed out during a recent American trade mission to India: “The question is in this global competition for investment whether India will outcompete other markets.

“Our goal is to connect US technology providers with opportunities in infrastructure development tied to Smart Cities, while introducing Indian policymakers, businesses, and urban planners to leading US companies.”

The UK, meanwhile, has already expressed its own interest in the Smart Cities Mission, with the Indian PM and his British counterpart, David Cameron, agreeing to support 11 Indo-UK Institutes of Health in India with an investment of £1 billion in these new cities.

The Indian government wants to get these Smart Cities ready by 2022 to keep up with an exploding urban population. The field is wide open for global investors to make the most of this five-year window.

Smart Cities Essentials

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