The Ministry of urban development (MoUD) has published a Concept Note on Smart Cities through a very well defined and articulated framework designating 4 pillars as the foundation of this concept. The vision gets clearly defined through this simplistic yet powerful representation on the outcome that smart cities should aim to achieve as an outcome of this critical Initiative
- Social Infrastructure
- Physical Infrastructure
- Institutional Infrastructure
Given that there is no consistent definition of smart city, and rightly so with demographic and social challenges, it is indeed very creditable for MoUD to have crafted the vision that is apt for the Indian context.
India is on an inflection point of urbanisation with 30 per cent of population contributing to 60 per cent of GDP. The rate of urbanisation tends to be slower till 30 per cent but beyond that it moves at a rapid pace and cities have to become smarter for 2 key reasons—first, key urban centre has to be enabled for propelling growth and hence greater wealth creation for the economy; and second, providing “citizens a socially and environmentally sustainable quality of life in these urban centres”.
What is admirable is that the Government of India (GOI) has also defined the criteria for selection of these cities along the lines of population (4 million plus/1 to 4 million/ 0.5 to 1 million) for union territories, state capitals, tourist and religious importance, and so on. This creates the first and most important step towards a policy intervention that is neutral and fair to all constituents of the country.
Certain conditions laid down are also in the right direction where the chosen cities have to necessarily provide or work towards providing master plans, digital spatial maps (this infuses technology adoption), communication model for citizens, utility infrastructure plan, data platforms, transparency through data sharing and status. With the basics in place and end state in mind, the government has made it possible for states to start thinking through on how to take it to the next step with partnership for all stakeholders.
The note provides some insights to the challenges and options of how to manage it and also gives a view on some of the global cities that have implemented smart concepts may be one at a time and still evolving, achieved success and embarked on next phase. It may be noted that some global cities started with social infrastructure while others took up physical infrastructure as a stepping stone. This to my mind should be left at the discretion of states which are empowered to make the choice depending on the local compulsions and also the overall vision for the city in consideration.
Projects in Mature Economies
Varied focus areas are defining the notion of smart cities. Imperial college in London has taken the lead for being the home to a “Smart City” research centre and in next few years we would have the concept defined more precisely and take away some ambiguity, thus leading to standardisation and also enabling convergence in terms of long term direction. The ranking are typically under 10 criteria. However, it is a step-by-step approach that makes and has made an ordinary city turn into a ‘Smart City’.
Some examples of various cities are as follows:
- Toronto: An active member of Clinton 40 megacities is working towards low carbon emission level with initiatives like smart commute.
- Vienna: It ranks high in multiple areas like innovation city, regional green city, quality of life and digital governance.
- New York: IBM Analytics Centre is already helping the city in various ways ranging from ways of preventing fires to identifying questionable tax refund claims—this could probably save the city about $100 million over a five-year period.
- Tokyo, Berlin and Hong Kong have embarked on smart suburbs, vehicle-to-grid and agriculture supply chain respectively to make various facets smart.
- Barcelona has embarked on low energy consumption initiatives while Brazil has put a command centre for predicting disruptions in weather, landslide, rainfall and traffic, to make city safer.
- Beijing is working on models to predict particulate matter in air with a modus operandi of not only reducing pollution but also predicting particulate matter 48–72 hours in advance.
The above cases represents various initiatives and strengthens the belief that cities or cluster of cities in India could take specific initiatives that come under the umbrella of a smart city, rather than getting awed by any big-bang approach. These examples also provide us impetus to make it easier for us to get a starting point rather than putting prolonged time and effort in deciding ‘where to start?’
An alternate could be to have a SPV with representations. However, monetary power in our democratic system lies with an elected representative (this case the Mayor) and hence a nominated local body representative in the council cannot affect any monetary allocations. This would require a change in act for enablement at state level and could take significant time. Also, this could lead to non-standardisation from state to state.
Governance: How they do it Globally
Most of the cities that have embarked on smart initiatives have a governance structure that is led by the Mayor of the city. This is a clear demarcation we observe where Mayor Office leads and is responsible for creating the eco system and vision with help of stake holders to develop, implement and monitor the plans towards making their cities smart.
A strong ecosystem is the background and these cities have local councils comprising government, industry, academia, citizens, think-tank groups who help in prioritisation and developing framework. This model has worked well for a reason—Mayor is responsible for the city and political equations are a matrix rather than encompassing in various decision processes. Further, participation of citizens, their views, and culture of thinking of next generation outweigh political compulsions and thus assist in faster decision making.
Indian Imperatives on Governance Structure
India has a peculiar challenge when it comes to city or urban initiatives and the framework often gets into conflict mode for various reasons. India also has a mayor system for administration. However, it overlaps with the bureaucratic and political system that is highly active to propose priority areas. Certain challenges in this context may lead to slower pace in prioritisation, fund allocation (both from centre and state), local administration compulsions among other things—all eventually leading to derailment, delay or escalating cost of project over a period of time.
Action Step 1: Create Smart City Councils in each of the 100 cities latest by March 2015
GOI should provide policy framework on guidelines for creation on Smart City Councils along with the charter, responsibilities and working process. This should also state mandatory members like academician, eminent citizen, RWA chairperson, senior citizen, local industry representative, women representative apart from optional members as also defining the minimum and maximum size of the council. There should also be a provision of fee or contract remuneration for each council member and a minimum number of hours per month that should be provided for meetings and individual work. The key factor here is to have the best of brains in relevant areas and also civic and industry representation.
Action Step 2: Smart City Council and Empowering Mayor through policy framework
An approach to ensure smooth prioritisation could be a policy intervention specifically created for smart city projects. The policy note could define that the Smart City Council should be created with representation from various segments of the society with the Chairperson being the Mayor. This would go a long way in creating circumstances that empower the mayor to have decision making authority with less intervention that comes due to other compulsions from various segments. At times they might be correct. However, the decision making process should not be ambiguous.
An alternative could be to have a special purpose vehicle (SPV) with representations from all stakeholders. However, monetary power in our democratic system lies with an elected representative (in this case with the Mayor) and hence a nominated local body representative in the council cannot affect any monetary allocations. This would require a change in act for enablement at state level and this could take significant time. Also, this could lead to non-standardisation from state to state.
Action Step 3: Third party research agency empanelment for research
It is frequently seen that there is a gap between what the citizens want and what the administration feels it right for various reasons. In a smart city concept, more so to make it a success, the source lies with the ‘citizen’ and hence it is critical to assess the top 10 aspirations, needs, challenges of citizens and then prioritise the ‘right smart initiatives’. This goes a long way in participative democracy and also positioning of success in masses, thus enabling more people to take or get impacted by improved services.
Action Step 4: Smart City Command Centre
Any smart city should have a command centre and could play the most critical part in information collation and dissemination. The command centre should also keep the city administration ear to the ground on what kinds of challenges are being observed. The question is obviously about ‘funding’ these command centres that will be managed by people—funding for IT hardware, telephony, software are other capital and operational expenses. We should either have a budget allocation through PPP model for 1–2 years or make it into a nominal profit model (profit goes to managing and maintaining services) with third party providers. GOI could provide a framework for this. However, with the increased density of mobile population a remote call centre service inclusive of local language needs to be at the centre of smart city initiative.
India has a Mayor system for administration. However, it overlaps with the bureaucratic and political system that is highly active to propose priority areas. Certain challenges in this context may lead to slower pace in prioritisation, fund allocation (centre and state), local administration compulsions etc – all eventually leading to derailment, delay or escalating cost of project over a period of time.
Action Step 5: Theme based models for each state or city
Every city may have its own pressing needs on avenues to get smarter—some may prioritise supply chain or transport while others may look at pollution and waste management. The foundation of what theme needs to be taken should come out of third party research and some key initiatives that are proposed by Smart City Council. For example, Varanasi may choose supply chain on Internet for weaver community, information management for people visiting the ghats. Delhi may take a pressing issue of air pollution and waste management aggressively with shrinking landfills or Mumbai and Bangalore may take up technology innovation and incubation centre to promote a structured venture capital hub for India.
The objective is to have a theme-based approach and the city can rally behind with all its might and provide mutual motivation to public and administration. A theme is also beneficial for branding of a city. In case where it is a religious or tourist city, the priority could be on availability of select foreign language support on phone, physical information centres every 5 miles through kiosks and local shops double up as info kiosks—the theme could rally on being ‘a tourist friendly destination’.
Action Step 6: KPI for themes taken up by the city
Measurement is probably the most important aspect to reflect success of a smart city initiative. Each city with its theme needs to define what would be the measure of success. This could be a part of market research and should be focused on ‘consumer of service’, say a tourist, a citizen, a senior citizen and woman. This is a hard part of deciding and guideline should be put to have required talent to be inducted that can define or help define these parameters more so because these will be derived from IT systems at large.
Action Step 7: Think of industry partners who understand scale of task
Guidelines should be developed for empanelled industry members—be it waste management companies, IT hardware, software, service providers, power equipment, application providers and so on. We need awareness that City Mayors are elected representatives and for no fault of theirs, they may not be equipped with the understanding, appreciation of multiple industry players required to stitch together a convergence for smart city initiative. For scale, capability, credibility, local nuance understanding, it is all critical in selecting the right partner. Possibly GOI could assist in putting a consortium of various players or developing a panel and thereon states can have competitive bidding to take it to its logical conclusion.
Government of India should enable a council at national level to monitor progress, assist in case of roadblocks, provide knowledge avenues to local bodies, partner to provide best practices and benchmarks and so on. The apex body would be the hub that could make the entire effort synchronised and also show case internationally what has been achieved from time to time.
Action Step 8: Smart City Council
GOI should enable a Council at the national level to monitor progress, assist in case of roadblocks, and provide knowledge avenues to local bodies, partner to provide best practices and benchmarks and so on. The apex body could be the hub that could make the entire effort synchronised and also showcase internationally what has been achieved from time to time.
Some Smart Cities
What we can learn from various models and implementation? There are enough case studies available and industry is equipped with information on what could be best for a given city. We should have a consortium where intellectual capital can be brought together to plan detailed approach and framework for the city.
Following are some examples:
- Brazil’s command centre;
- Boston University on Cloud Platform;
- Boston Innovation district;
- Gaziantep, Turkey’s solar roofs for residential and commercial buildings;
- Toronto, Canada’s Smart City initiative towards low emissions through solar power bus shelters;
- Vienna Smart city;
- Tokyo Metropolitan Smart city vision 2020 – 12 key projects;
- Barcelona city in Spain’s action and outcomes; and,
- Hong Kong’s wise city initiative.
The most important question that comes to all our minds and needs consideration is the fiscal viability and funding gap. Each of the cities that embarked on this change had similar challenges and we may hide behind the obvious stating that they are rich economies, it is widely known in the globalised world how these very countries have been recession prone and are cash strapped. Yet, they had the vision to take this up for one and only reason—we have the right to quality life (rich, poor, powerful, chairpersons, politicians, leaders) and our future generations should inherit a world and proudly state that we gave them a better world.
With this philosophy in mind and also facing the realities of the country where one possible psyche overpowers us: Will people pay in a society that predominantly thinks of entitlement as a given? There is enough empirical evidence that citizens are willing to pay for service, irrespective of the social strata. A help centre where application is dispensed may charge `10-50. People will gladly pay this much if they are assured of service and if they are confident that they would not be pushed from one pillar to another. Yes there will be resistance, there might be outliers but those are not enough to derail such an ambitious project that has considerable impact on the country and generations to come.
- Smart City is primarily a state subject and Centre can provide minimal and indirect help at best. At the onset this awareness should be there among all stake holders—it is not the GOI that is responsible for creation of smart city.
- Government would have to put the note clearly stating which all ministries are involved for project funding and how can funding gap be bridged in case of need for various sectors such as road transport, sanitation, welfare, commerce and railways.
- Lay down various Central government schemes from which funding could be leveraged as a common purpose element and hence provide convergence to the initiative.
In absence of above information, we may run the risk of multiple reinventions and also not have a standardised approach irrespective of the initiatives being taken.
Other Factors that Could Assist in Fiscal Viability
The GOI note provides a lot of insight and also thoughts expressed by the Finance Minister. It highlights that in next 10 years, the average cost would be Rs 350 billion per year and hence significant amount of money needs to be mobilised to make 100 smart cities a reality. While the GOI provides the guidelines on models related to PPP and vehicles through which funding can be provided by central, state and other schemes, there is also a positive uplift that can happen as smart city starts taking shape. These need to be worked out on a speculative basis taking cue and guidance from experiences of other cities which have reached some stage of being smart city and have benefitted from that.
- Real estate experts predict that smart cities would be a hot bed of educated work force and hence could become high return cities, thus leading to early investment in states that embark with sincerity on this initiative (collaterally the municipal and state authority will also earn higher revenues).
- Smart city often catapult crowd sourcing economy like buying power from community, micro-grid solar plants on arid land and roofs in cities, villages, mountains and coastal areas. On intellect front it could be patents and inventions through innovation that can generate revenue.
- Simple yet effective small initiative like food waste collection moving to create cheaper fertilisers could propel recycle and also associated culture of organic farming in these cities.
- Ability to garner grants and loans from multi-lateral agencies and honoring low carbon, sustainable and environment friendly credits.
- Select smart cities can become hub of venture investing—some city might invest to become innovation centre, attracting talent and research while state facilitates ‘ideas under one roof’ where venture funds can come and invest in those startups.
- A smart city university or research centre at a premier institution to network with global academia like Imperial College, Advanced Spatial Analysis of UK, Centre for Technology in Government, USA. This could mobilise invention and funds that could benefit the state and the city.
- On planning and fiscal side, we would also have to consider aspects that can cause disruptions. However, they will only augment and not derail the smart city plans
- Airports and helipads may become reality in 10 years for all cities
- Transport corridors assist in development and help in wealth distribution
- Direct transfer of subsidy could help in fiscal gap (people will pay for service delivery)
- Nuclear power augmentation will help in 24×7 clean energy
- Driver less cars in metro may change the dynamics of car pool
- Suburban centres develop more rapidly than core movement to urban city
To conclude, it would be fair to provide a representation with an analogy and why embarking on smart city is possible despite all the challenges being discussed and posed. We have an opportunity to begin another revolution in this century. Yes, we are at an inflection point, and though the target is steep—it is achievable.