It’s been close to two years since the first 20 cities were selected under the much talked-about Smart Cities Mission (SCM) of the Government of India, but progress under the mission has been slow.
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Let us just look at the top five cities. Selected in January 2016, these cities – Bhubaneswar, Pune, Jaipur, Surat and Kochi – are supposed to complete the proposed projects under the SCM by 2021-22. But most of these cities appear to be lagging behind schedule, both in terms of the number of projects completed as well as the works under progress. Surat leads, with works worth over Rs 2000 cr in progress. Kochi lags the most, having started only two projects worth Rs 20 cr so far.
Amounts spent so far
Of the top five, Bhubaneswar and Kochi have not completed any projects so far. Pune has completed four out of 34 projects, Jaipur seven out of 47, and Surat seven out of 52.
|Completed Smart City projects
If we look at the total spending on these completed projects, Jaipur has spent only Rs 18 cr, i.e., 0.8% of its total outlay for smart city projects. Pune has spent Rs 174 cr, which comes to six percent of its total outlay. And Surat has spent Rs 67 cr, which comes to 2.5% of its outlay.
While Bhubaneswar has the highest outlay of around Rs 4500 cr, it ranges from Rs 2000-3000 cr for the other four cities.
Surat leads among the top cities in terms of the number of ongoing projects. In addition to the completed projects, the SPV has issued work orders worth over Rs 2000 cr for 32 projects. These include projects for affordable housing, water supply and recycling, and integrated traffic control system.
In each city, the projects are implemented by Special Purpose Vehicles or SPVs, using funds from the centre, state governments and the municipality, along with PPP funds, municipal bonds etc. Most SPVs have received funds of about Rs 400 cr so far.
M Nagarajan, CEO of the Surat SPV, says that fewer projects have been completed because most projects are long-term. “The duration varies for different projects. For example, the affordable housing projects that are ongoing, would take longer to complete,” he says.
If we take Surat’s ongoing projects into consideration, they account for another 75% of its total outlay. Surat has also managed to get more private participation in their projects, with about 40% of the project funds expected to come from Public Private Partnerships (PPP).
Ongoing projects are, however, fewer in Pune and Jaipur. The Pune SPV, named the Pune Smart City Development Corporation Ltd. (PSCDCL), currently has ongoing projects worth Rs 280 cr, amounting to 9.5% of total outlay. Rajendra Jagtap, CEO of PSCDCL, says that another project worth Rs 350 cr had to be re-tendered due to technical issues. Dismissing allegations of delay, Jagtap explains that many projects require detailed feasibility studies beforehand, as they are entirely new.
PSCDCL has just completed the feasibility study for a Rs 1000-cr transport hub project by the global consultancies Deloitte and Atkins. “Such feasibility studies are needed because we don’t have an existing template on how to implement these projects and what the cost would be. We have to look at both global and local parameters – the right technology should be selected among many, it should be cost-effective and also work in local conditions here,” says Jagtap.
Jaipur has ongoing projects worth about Rs 600 cr, which is 28% of its total outlay. Anil Singhal, one of the Directors of Jaipur Smart City Limited (JSCL), the Jaipur SPV, says, “Multiple government agencies are involved in the projects and they have to be convinced, which takes time.” Another four projects – worth 16% of total outlay – have been put on hold for now. This includes three projects for repurposing heritage structures, that have been stalled because of ownership disputes with the royal family.
Currently the funding for Jaipur will come entirely from government sources. “We may issue municipal bonds in the future. For this, the municipality should have revenue-generating projects, which we currently do not have,” says Singhal.
Bhubaneswar SPV officers have not commented on the extent of ongoing projects.
Kochi has initiated projects worth lesser than Rs 20 cr, which is less than one percent of its total outlay.
Ever-changing or part-time CEOs
SPVs have autonomy in planning, approving, implementing and evaluating the projects. Directors of these bodies should include nominees from centre, state and municipality. The Pune SPV, for example, is notable for the high number of elected representatives at the city level – its directors include the city’s mayor, the Chairman of the Standing Committee of Pune corporation, leaders of the house and opposition and two councillors. However, many other SPVs are dominated by state-level officials, and have low representation from municipality.
According to the Smart City Mission guidelines, every SPV should be headed by a full-time CEO. But most of these bodies have been bogged down by CEOs who are transferred often or hold multiple offices. For example, Vineel Krishna, CEO of the Bhubaneswar SPV is also the Managing Director of the Odisha Mining Corporation and Director of the state’s Sports and Youth Services Department.
A P M Mohammed Hanish, CEO of the Kochi SPV, is also Managing Director of Kochi Metro Rail Ltd (KMRL), and Chairman and Managing Director of the state Civil Supplies Corporation (Supplyco). Similarly, CEO of the Jaipur body, Ravi Jain also holds the post of the city’s Commissioner.
CEO transfers are so common that many have served for less than six months. Jagtap is the fourth CEO to be appointed at Pune SPV. Jaipur has had three different CEOs, after which Ravi Jain was given additional charge. Kochi got a CEO at all after a long wait, and Hanish is its second CEO.
The composition of the Kochi SPV has also been pointed out as a major reason for slow implementation of projects. The SPV directors are mostly top state government officials located in Trivandrum; the state’s Chief Secretary is the SPV Chairman. Each stationed in a different city, saddled with additional responsibilities, and transferred often, the directors have had very few meetings so far.
Given all these constraints, it remains to be seen if the top five cities will indeed meet their deadline of 2022.