India’s Urban Ambitions

Smart Cities Mission | AMRUT

Introduction

The Government of India has an ambitious ‘Smart Cities’ Mission to improve the quality of life, attract people and investment and set in motion a virtuous cycle of growth and development in India’s cities and urban areas. As per the 2011 census, India’s urban population was only 31% of the total but accounted for 63% of the Gross Domestic Product (GDP) of the country. By 2030, the urban population will be 40% of the total and will account for 75% of the nation’s GDP. With this view, the Government has decided to streamline development of physical, institutional, social and economic infrastructure in the cities and urban areas under the umbrella ‘smart cities’ mission.

What is a Smart City?
In the simplest of terms, ‘smart’ in this context means ‘getting more for less’. Smart Cities tap a range of approaches - digital and information technologies, urban planning best practices, public-private partnerships, and policy change - to focus on the most pressing needs and on the greatest opportunities to improve living conditions. The development of ‘smart’ cities, therefore, needs to focus on streamlining physical, institutional, social and economic infrastructure to make development impacts felt across all four aspects. With this in view, the Smart Cities Mission seeks to improve core infrastructure of the cities, provide a decent quality of life, maintain a clean and sustainable environment and incorporate advanced technological solutions wherever possible.

100 cities across the country have been selected for the Smart Cities Mission in four batches. Smart City Proposals from each of these cities’ Municipal Boards, were evaluated on the criteria of:

Evaluation Criteria	Key Aspects
Credibility of Implementation	Operational Effectiveness of Public Entities Traffic Congestion Status Administrative Efficiency Water & Sewerage Situation
City Vision & Strategy	Needs, aspirations & wishes of citizens Quality of Living ICT Main economic activity, sustainability & inclusiveness
Proposal Impact	Citizen Consultation & Quantification of Outcomes Indicators & Targets, Goals & Objectives Primary Economic Base & Employment Inclusiveness
Cost Effectiveness	Implementation Plan Financing Plan Financial Sustainability Financial Assumptions Frugal Engineering/Citizen Innovation/Crowd-sourced IT applications
Implementation Plan	Convergence of Initiatives Alternative Technology/Urban Planning Strategies acceptable to the city Smart Components (Resource Efficiency) Existing Infrastructure Usage Contracts for Hardware & Services Generic Technology Specifications
Innovation & Scalability	Best Practices in Consultation with Citizens Environmental Impacts Smart Solutions Scalable within city or to other cities
Process Followed	Co-creation (ideas/strategies/implememtation mechanism/financial solution) in consultation with citizens, vulnerable sections, ward committees, area sabhas and important citizen groups Social Media/Community/Mobile Governance Contrary Voices accommodation

The first batch includes a list of 20 ‘Lighthouse Smart Cities’ (table below), which are strategically important for their respective regions – economically, politically or geographically, and will spearhead the smart cities initiative.

City	State/UT	Tier	Resident Population
Ahmedabad	Gujarat	2	5577940
Chennai	Tamil Nadu	1	4646732
Surat	Gujarat	2	4467797
Pune	Maharashtra	2	3124458
Jaipur	Rajasthan	2	3046163
Indore	Madhya Pradesh	2	1964086
Bhopal	Madhya Pradesh	2	1798218
Vishakhapatnam	Andhra Pradesh	3	1728128
Bhubaneswar	Odisha	2	1618879
Ludhiana	Punjab	3	1618879
Jabalpur	Madhya Pradesh	3	1055525
Coimbatore	Tamil Nadu	2	1050721
Guwahati	Assam	2	957352
Solapur	Maharashtra	3	951558
Kochi	Kerala	2	602046
Belagavi	Karnataka	3	488157
Udaipur	Rajasthan	3	451100
Davanagere	Karnataka	3	434971
Kakinada	Andhra Pradesh	3	312538
NDMC (Delhi)	Delhi	1	257803

 

Atal Mission for Rejuvenation and Urban Transformation

Complementing the Smart Cities Mission is another Government of India initiative, the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), which is intended to provide water supply, sewerage and urban transportation to every household in 500 urban zones. These zones should meet the following criteria:

• Population of 100,000 or above.
• Capital cities/towns of states/Union Territories (UTs) not covered under 100 Smart Cities Mission.
• All cities/towns classified as heritage by Ministry of Urban Development (MoUD).
• Stem of main rivers (population 75-100,000).
• Cities from Hill states, islands and tourist destinations (not more than 1 from each state).

The focus of AMRUT will be primarily on improving service delivery, resource mobilization, capacity building and bringing about greater transparency in municipal functioning of the selected urban zones. Many of the projects undertaken will have synergies and/or similarities with the Smart Cities Mission projects.

Development of Core Infrastructure

The development of core infrastructure will focus on the following aspects:

a.    Adequate Water Supply
b.    Adequate Electricity Supply
c.    Sanitation (Solid Waste Management)
d.    Efficient Urban Mobility & Public Transport
e.    Affordable Housing
f.    Robust IT Connectivity & Digitization
g.    Good Governance (e-Governance & Citizen Participation)
h.    Sustainable Environment
i.    Safety and Security of Citizens (especially women, children and elderly)
j.    Health & Education

These developments will focus on Area-based projects (like converting slums to planned areas, more intensive infrastructure services, central zone developments, co-creation of new layouts), Greenfield developments (in the outskirts of the city) and Pan-City Technology-driven Smart Solutions (for e-Governance, Waste Management, Water Management, Energy Management, Urban Mobility and others). In other words, the strategy of the Smart City Mission can be summarized with the following aspects:

a.    City Improvement (retrofitting)
b.    City Renewal (redevelopment)
c.    City Extension (greenfield development)
d.    Pan City Smart Solutions

The end-goal is to improve livability (by improving quality of living, infrastructure and services, creating new employment opportunities and enhancing incomes) and generating inclusiveness in the urban area.

Sample projects covered under the Smart City mission include:

i.    Mixed land usage for compatible activities, which require flexibility in land usage laws and building by-laws.
ii.    Inclusive housing development, focusing on the economically disadvantaged sections.
iii.    Developing walkable localities to decrease congestion, air pollution and resource depletion and improve local economy, promote interactions and ensure security.
iv.    Preserving and developing open spaces like parks, playgrounds and recreational spaces to contribute to improved quality of life, reduce urban heat island effects and promote ecological balance.
v.    Promoting variety of transport options like transit-oriented development, public transport and last-mile para-transport.
vi.    Citizen-friendly and cost-effective governance (online services) to promote accountability and transparency.
vii.    City Identity development based on its main economic activity and cultural aspects like local cuisine, arts & craft, sports facilities etc.
viii.    Smart solutions incorporating technology in infrastructure and services, developing resilience to natural disasters and cost-efficient usage of resources.

Financing and Execution for Smart Cities

The Government, for now, plans to invest 15 billion USD for Smart Cities (and 7.5 billion for AMRUT), of which 7.2 billion will be invested over the next 5 years. Additional funds are envisaged through Public Private Partnerships (PPPs) with private multinational firms or banks. Also, the private sector will play the role of contractor/consultant for the projects. Power, ICT and integrated townships will see the maximum impact of the transformation, which also calls for focused financial mechanism in these areas.

Financing Plan for Smart Cities Mission

The MoUD has provided guidelines for creation of Special Purpose Vehicles (SPVs) for the purposes of planning, execution, release of funds and operation and monitoring of projects. The State/Union Territory government and Urban Local Body will have a sacrosanct 50:50 partnerships in the SPV. Additionally, a private sector or financial institution can hold a stake in the SPV on the condition that the sum total of the State/UT and Urban Board’s stakes in the SPV Limited Company is always greater than the stake value of the private sector/bank.

Key responsibilities of the SPVs are:

i.    Approving and sanctioning projects
ii.    Complying with requirements of MoUD
iii.     Mobilizing Resources
iv.    Appointing third party Review & Monitoring Agency
v.    Overseeing Capacity Building initiatives
vi.    Facilitating inter-linkages of academic institutions and organizations
vii.    Ensuring timely project completion
viii.    Reviewing Mission activities
ix.    Ensuring Quality Control
x.    Facilitating Joint Ventures/PPPs with private sector
xi.    Supervising contracts, partnership deeds and service delivery agreements
xii.    Collecting user charges and taxes/surcharges as applicable for the projects.

Get Me Experts has identified 27 industry sectors from the numerous projects selected and companies shortlisted for the Smart Cities Mission. These sectors can be classified as primary, secondary or tertiary, depending on the level of relevance and supporting skills and services needed. The table below captures these sectors.

Primary Sector	Secondary Sector	Tertiary Sector
Culture & Conservation	Capacity Building	Academia
Disaster Management	Commercial Services	Advocacy
Healthcare	Environmental Management	Analytics
Infrastructure	Project Management	Architecture
Power & Heat	Security Management	Communications & Marketing
Public Services	Resource Management	Consultancy
Real Estate	Technology	Financial Services
Urban Mobility		Legal Services
Urban Planning
Urban Services
Waste Management
Water Management

 

Funds allocated thus far for projects in the 20 ‘Lighthouse Smart Cities’ include ongoing projects under respective ministries, as well as freshly allocated under the Smart Cities Mission. The figure below is a cumulative depiction of the funds (in Crores of Indian Rupees) under different industry categories

The Smart Cities Mission will cover the 100 cities and its duration will be five years (FY2015-16 to FY2019-20). Evaluation of the Mission will be done by the Ministry of Urban Development after the five years and the mission may be continued further with the learnings obtained. The challenging projects that are being made as part of the Mission will require an investment of USD 1 trillion over 20 years.

For 7 of the Smart Cities, the Government has also signed partnership agreements with three countries, viz., Germany (3 cities), USA (3 cities), Spain (1 city) and Singapore (1 city).

 

Business Opportunities in the Smart Cities Mission and AMRUT

A KPMG Study has identified several Business Opportunities for Smart Cities and AMRUT Missions in the areas mentioned in the tables below.

Business Opportunities: Smart Cities Mission  (USD 1 trillon at present value terms over 20 years needed)
Smart Governance	Digital India: 83m market
Smart Energy	Energy Storage (USD 10m), PGCI- 26b USD in 5 years, 130m smart meters by 2021
Smart Environment	USD 50b (MoWR)
Smart Transportation	USD 4.13b for 6m electric/hybrid vehicle production (2020), 20b for metro projects (MoUD), Mumbai-Ahmedabad high-speed rail (USD 10.5b)
Smart ICT	Cloud Computing- 4.5b market, Safe City Project - USD 333m (7 cities)
Smart Building	11.5m homes every year, Intelligent Building Management Systems - USD 1.9b market
Smart Health & Education	FDI in insurance increased by 49% from 26%, Indian medical devices market - USD 11b by 2023

Business Opportunities: AMRUT  (USD 15.15 m per city for 500 cities for 5 years)
Allocated Investment	USD 15.15 million per city
Digitization of ULBs	Developing platforms & services
Capacity Building	Specialized Municipal Cadre Training
Water Management	Water treatment plants, Pipelines, Metering, Grid-management solutions, De-siting, Ground-water recharge etc.
Waste Management	Decentralized underground sewerage networks, Sewage treatment plants, Waste Collection + Transport treatment Integration, Septage Cleaning + Transport Treatment, Storm Water Drainage & Reuse
Urban Transport	Ferry vessels, Pathways, Skywalks, NMT, Multi-level smart parking, BRTS
Green Zoning	Landscaping, Creating green infrastructure (parks, ponds, etc.), Vertical greening
Reform Implementation	Implementation, Consulting, Monitoring & Evaluation

 

Case Studies

CHENNAI Smart City Mission (Tier 1 City):  Enhanced Mobility | Smart Urban Infrastructure | Resilience to Physical, Social, Economic Challenges | Universal Hub for Safe & Sustainable Living
Salient Features	Annual pop. growth rate = 7.7% Industrial, Residential, Commercial establishments Well-connected by rail, road and air IT, Medical, Industrial, Warehouse, Logistics - biggest growth drivers 1240 slums Congested roads and pollution increasing (among highest PM levels in India)
Type of Projects	Electricity T&D, Water Supply, Storm water drainage, Pedestrian Pathways, ICT for non-motorized transport,
Industry Sector	Power & Heat (7), Water Management (8), Transportation (20), Waste Management (4), Technology (5), Environmental Management (3)
Example Projects	Power & Heat + Urban Planning: Electrical & ICT Utility Corridor Water Management: 1. Reliable Source Augmentation (desalination plant) for 24 * 7 water supply 2. Storm Water network augmentation Waste Management + Urban Planning: Network Augmentation/Rehabilitation Technology: WiFi Zones & Hotspots

 

BHUBANESWAR Smart City Mission (Tier 2 City):   Transit-Oriented | Livable | Eco-friendly | Child-friendly | Regional Economic Centre
Salient Features	Rich cultural heritage + strong economic base Hosts top 5 Indian IT Companies: Infosys, Wipro, TCS, Tech Mahindra, MindTree 3rd best city to do business in India (World Bank) One of 4 Planned IT Investment Regions Gateway to Golden Tourist Triangle - Puri, Konark, Chilika Lake Petrochemical & Steel Hubs at Paradeep, Kalinganagar, Dharma & Gopalpur + ports along Odisha coast
Type of Projects	Multimodal Hub Railway + Bus, Urban Mobility (roads, cycle lanes, PBS, E-Rickshaw), Housing for All,  Social Development, Economic Development, Basic Services, Technology For All (wifi, smart metering, digital literacy), Future Proofing (LED Street Lights, Solar Rooftops, Disaster Management Plan), Traffic Management, Parking Management, Bus Service Operators, Common Payment Card, Emergency Response & City Incidence Management, Command Control Centre, Build Basics
Industry Sector	Infrastructure (5), Real Estate (5), Urban Mobility (18), Technology (14), Capacity Building (5), Waste Management (3), Power & Heat (13), Water Management (1), Urban Services (9), Disaster Management (4)
Example	Infrastructure: Multimodal Railway Hub Real Estate: Janpath Government Housing Redevelopment (slums) Technology: City Wifi Project, Child App Transportation: Area-based Traffic Signaling & Control

 

BELAGAVI (BELGAUM) Smart City Mission (Tier 3 City):  Inclusive, Livable, Culturally Vibrant | HEAL- Health, Education, Ancillary Industry & Logistics | Enhanced Transportation | Clean Energy | Safety | Conservation
Salient Features	4th largest & Oldest City in Karnataka (rich history & culture) Business Hub & Education Center
Type of Projects	Neighborhood Governance (multi-utility facilitation centers), Theme-based Heritage Parks & Recreational Spaces, Upgrading Heritage Precincts, Water & Energy Smart Metering, Affordable Housing, Skill Development, Transportation Overhaul, Green City Center, SWM, E-Governance Initiatives
Industry Sector	Architecture (8), Real Estate (8), Infrastructure (9), Technology (10), Waste Management (2), Water Management (5), Urban Services (3), Power & Heat (5)
Example	Power & Heat: Underground UG - LT Cabling, UG - HT Line, Solar Rooftop + Wind Farm Transportation: Improvement of Central Bus Terminus & City Bus Terminus Waste Management: Construction of STP, Uncovered UGD, Improvement/Rehabilitation of sewerage lines Technology: Intelligent Traffic Management System Water Management: 24*7 Water Supply

 

DARJEELING (AMRUT, Hill Station): Better Management of Sewage & Storm Water | Better commutability | Skills & Training
Salient Features	Premium Hill Station in India Connectivity through Himalayan Railway Underground Sewage System covers 40% of the city
Type of Projects	Water Supply, Sewerage, Storm Water Drainage, Urban Transport Development, Green Zones Development, Implementation of Reforms, Capacity Building
Industry Sector	Water Management, Waste Management, Transportation, Urban Planning, Urban Services, Capacity Building
Example	Water Supply: SLB = House Level Coverage of water supply connection, per capita quantum of water supplied and quality of water supplied Storm Water Drainage: SLB = Important parameters like Slope required need to be addressed Sewerage: SLB = Centralized sewerage and septage management system Urban Planning: Extension of Green Zones (parks etc.)

References

1. Smart Cities Mission website of Ministry of Urban Development (MoUD), Government of India. www.smartcities.gov.in.
2. KPMG, India Soars High, Feb 2016. www.kpmg.com/in.

Urbanization Business opportunities Finance smart city Infrastructure Smart city AMRUT Atal mission for Rejuvenation and Urban Transformation