Smart Cities: Action On Ground Begins Now, Says Secretary Rajiv Gauba

Rajiv Gauba, secretary in the Union Ministry of Urban Development tells BW Businessworld’s Editor-in-Chief Anurag Batra that the years 2017 and 2018 would see a lot of action on ground in the realm of smart cities. He says that the first few months of the Smart Cities Mission had been consumed by essential basic activities, but that a very large number of projects in the cities were now ready to take off. He, however, feels that the limited revenues and limited capacity of cities around the country are a big challenge.
Excerpts:

The Ministry of Urban Development has been in the news for two years for trying to implement the vision of the Prime Minister through various missions like Smart Cities, Swachh Bharat, AMRUT and many more. What are its priorities among them?
Talking of priorities, there is a huge infrastructure deficit in our cities and now we have started focusing immensely on the urban sector. Urban development has been our agenda, wherein many new missions were launched two years back, like Smart Cities, AMRUT and Swachh Bharat. The focus of the Union Ministry of Urban Development is on bridging this infrastructure deficit. There are critical sectors like water supply, sewerage network and green spaces, as we are on the cusp of a major demographic transition.

Our level of urbanisation is very low compared to other developed countries or even Emerging countries like Brazil or China. But now we are urbanising rapidly.

We have to not only wipe out the deficit in infrastructure, but also cater for better urban infrastructure for another 375 million people, who will be added soon in the days ahead.

We are working on these reforms so that the cities become more liveable and are able to do it on their own. We have to steer them away from depending on grants from the Central and State governments.

How has the progress of the Smart Cities Mission been across the country?
We will be completing two years in June this year, so actually its one year and eight months and the progress of the Smart Cities Mission across all the States has been extremely good. I think expectations of people are very huge and that people expect that there will be a brand new township springing up, which is not the Smart Cities Mission.

One of the most distinguishing features of the Smart Cities Mission is that the implementation mechanism is entirely new. Special Purpose Vehicles (SPVs) have to be set up along with municipal corporations, which are separate companies focusing on the Smart Cities Mission. The whole idea behind the SPVs was to have professional management in the cities, so decision making is faster in terms of development and better infrastructure.

The first task after announcing the mission was selection of cities, which again was a new and challenging thing. The first set of cities were announced in January 2016, just a year ago. All of them have established SPVs now and appointed full-time CEOs, CIOs, CFOs.

Secondly, they have capitalised grants from both the State and Central governments for this project and thirdly, have prepared project reports. Whatever vision of the city came out through citizen involvement as well as from experts, was translated into actual projects and reports.

The first one year or so was consumed by these essential basic activities. I can tell you that a very large number of projects in this cities are ready to take off.

The action on ground will now begin. Large projects like smart roads, smart lighting, command and control centres, solar rooftops plants WiFi spots, and some iconic projects like river front development in Ahmedabad, is being replicated in many cities. The years 2017 and 2018 will really see a lot of action on the ground.

Technology plays a very important role in the new missions of the urban sector? How does your ministry make sure that technology becomes an important ingredient for future cities?
Everybody has understood that one of the most important things in development of infrastructure is technology, which would improve the delivery of services for various works like certificates, construction of permits or surveillance cameras for improved security, especially at dark spots and for monitoring municipal workers.

We are exposing the civic bodies to best practices across the world and setting up things like Smart exchanges so that they all don’t have to learn from the beginning and learn from each other.

How crucial is the role of civic bodies in these missions?
Urban local bodies are at the centre of the point on what things need to be implemented. They represent local people who have been an important part of this mission by their views.

Smart Cities, in which cities were preparing their vision or plan, or we can say, they were identifying their key priorities, had to engage citizens in every manner through conventional methods, as well as social media. Civic bodies have played an important role in doing this. There were a large number of people who gave their inputs.

In Swachh Bharat, we expanded the number of cities to 500 cities in Swachh Sarvekshan, Citizen feedback was made very important in the evaluation process. The coordination between citizen and urban local bodies is very close and an immense amount of pressure was generated from citizens on their elected representatives and mayors, as well as officials to do well.

How has the AMRUT mission been going so far?
AMRUT mission in some senses is the most important mission across the Ministry of Urban Development, because it is focused on two critical sectors, water supply and sewerage network. In order to fast track implementation, we have sanctioned the plan for these 500 cities for the entire mission period. We have left the actual project sanction entirely to the States.

We have left the actual project sanctions entirely to the states so that they do not have to come for the projects here and lot of flexibility have been provided to the states in technology, in funds across cities so that the projects can move faster.

One of the key focal points especially in smart cities and AMRUT, is involvement of the private sector in terms of PPP and the model is being experimented in a big and scalable way. How would you assess its success?
The PPP model has been tried already in various cities and with varying degrees of success. We have tried to promote this on a much larger scale, both in smart cities and AMRUT, brought the cities together many times, brought cities face to face with the private sector, propagated best practices and tried to identify the problems that had led to PPP models not working in some cities. Which made many people both in the private sector and government, a little wary of some things.

We have tried to convince the States and normal local bodies that if you rely on implementation dependence solely on government money then your total envelope will be very limited. If we have to catch up and for large projects, you have to get the private sector. But the private sector will come in only if there is guarantee of payments. And also by encouraging the urban local bodies to go for credit ratings and municipal bonds because when you go to the market for bonds, then they have to be linked for security of payment and repayments.

Coming back to affordable housing, Prime Minister Modi has, in his last three speeches, talked of affordable housing and how he wants to make sure that everyone, especially the poor have a roof over their heads. What is the Ministry of Urban Development doing to make sure the targets for affordable housing are met?
The Prime Minister’s Awaas Yojana is implemented by the Housing and Urban Poverty Alleviation Ministry. A number of new initiatives are being announced in the Budget to give a boost to the programme. We are telling the States and the urban local bodies to go in for transit-oriented development so there can be more construction in the cities. We are helping the cities and State government identify pockets of government land being underutilised and go for redevelopment where the total built-up area is much more than is currently available and the financing is generated through sale of commercial spaces, which is not dependent on the Budget.

What are the challenges or the roadblocks you see at this point and how do you plan to deal with them?
One of the challenges is the limited revenues of cities in the country and their limited capacity. So, we are focusing, therefore, upon incentivising the key reforms. So that the cities are in a better position to deliver services to citizens and generate more revenues. I mentioned to you the exercise of credit rating, it is being taken at a massive scale. For the first time a country is going in for credit rating. Even if they do not raise bonds, we can see where the weaknesses are, their accounting, revenue generation or in their governance structure. It will also open up to public scrutiny.

Also we are encouraging them to adopt innovative methods of financing - bonds is one and other is value capture financing. And we will ask them to make it mandatory for all projections so that both urban local bodies and the State government can work in a more systematic manner. Then we are asking them to focus on issuing a construction permit being issued through a single window integrated system, so that the ease of doing business improves. And for creating their municipal cadres and adopting more flexible planning norms.