smart cities

1 For Private circulation only. News collected and compiled by Urban Management Cell (UMC), CCBP,JnNURM, Kerala-IMG Thiruvananthapuram

(A UMC, Kerala Publication)

No 4. April 2015 Monthly News Letter

Special Issue On

SMART CITIES

The Urban News


Cities around the globe are undertaking ‘smart’ initiatives that result in better services for citizens, a more attractive city for visitors and businesses, a better place to work, and greater cost savings. Smart cities are urban settlements that exploit technology to offer more structured and more hospitable living conditions for residents.ICT forms the important back bone of the cities and the main tool to address common problems like sanitation, congestion, waste of energy. The government plans to build 100 smart cities across India and made an allocation of Rs 7060 cr in 2014-15 budget. For this the initiatives from the government level alone is not sufficient: Smart city cannot have only a few hours of water supply a day, or electricity that goes off for several hours, or streets littered with garbage. A very important feature of all smart cities is good citizen access to information. Whether it is regarding city specific data or the measures being taken by municipal bodies or information relating to various service providers such as transport and similar information relevant for potential investors has to be conveniently available. This could be through multiple channels - internet, mobile apps, radio, TV, printing media, etc. WE, the people of India, shall support the Smart City initiatives of the Government whole heartedly. The general appearance of the city has to be pleasing and clean. Using an average figure of 1 million people in each of the 100 smart cities, the High Power Expert Committee on Investment Estimates in urban infrastructure has assessed investment requirements for the services covered comes to Rs.7 lakh crore over 20 years. This translates into an annual requirement of Rs.35, 000 crore. Though it is the most costly dream, it is a much awaited dream for every Indian. Each of the Smart cities can also address the issues such as dowry death, poverty, health, education domestic violence, gender inequality, crime to women, debt bondage, cyber crimes and environment in addition to infrastructure. Considering the importance of this concept, this issue of Urban News is meditating on SMART CITY vision. To achieve the results, it’s important for cities to think big, but start small. Think big initially with a holistic, citywide evaluation of the opportunity and the engagement of all the stakeholders. Then, with a vision for the future of the city, small projects with quick payback can be initiated. The savings from these projects, along with the positive publicity of citizen engagement, will provide momentum for future projects. But smart city initiatives do not remain in the planning stages. Speed is a requirement to implement. By far, the biggest inhibitor for cities is funding, as officials are challenged to find the appropriate financial resources for both short- and long-term projects. Tackle it effectively and ready to meet the internal organizational challenges, such as the lack of cross-departmental coordination and alignment. In addition, many cities need a committed champion to lead the effort across departments.

‘The city is not a concrete jungle, it is a human zoo’ Desmond Morris. The Human Zoo

Editorial

UMC

KERALA


Smart Cities - Emerging Urban Realities Dr N Vijayakumar

Team Leader, UMC Kerala

Men came to the city to live, but they stayed there to live the good life. The Smart City aims at providing ‘maximum advanced good life’ to its inhabitants.

India’s efforts to create 100 new smart cities are still in the early stages. One of the first details to emerge so far is that the 100 cities will be picked through a competition. One of the deciding factors will be how much the cities have done to support the initiatives, including make in India, which is designed to turn India into a major manufacturing hub, and Swacch Bharat , which encourages cities to clean up. Other factors could include the quality of their infrastructure, the level of city services that are citizen-focused, and overall quality of life. While some smart cities are being developed now, other details on the initiative have been scarce so far. It’s anticipated that some of the 100 smart cities will be existing cities that get infrastructure upgrades, while others will be built from scratch. Smart cities are those where the quality of governance is enhanced with the integration of applications and data centres through the use of IT and communications. Smart governance is a process of reform in the way government works, and shares information with the public to deliver services. Government departments will examine excellence in smart services, and will find

ways to offer efficient services to the public. Complaints and suggestions cannot be ignored and must be dealt in a timely and professional manner. The citizens, residents and everyone involved are benefited and it is a win-win situation for everyone. Central and state governments could implement new energy laws, compliance structures, training programmes and offer incentives for efficiency projects. Thus the smart city project is meant to create sustainable, livable tech - cities in a country where the population is swelling rapidly. India’s population is forecast to reach 843 million by 2050 – more than double what it is today.

In the mid 19th century, no country was predominantly urban. By 1900, England was in urban category and by 1950; quarter of the world’s population lived in towns and cities. By now, 1/2 of the world’s population is staying in urban centers. The urbanisation in developed countries is spread over many centuries, accelerating in the late 19th and 20th century. In developing countries, it is compressed in the last 30 years -by 1950, 1/5 of the population was living in cities; by 1975, 1/3 of the population was living in cities and by 2008, it is 1/2 of the population. As a result of rapid Urbanisation especially in metropolitan areas, beyond the cities’ carrying capacity, and putting tremendous pressure on infrastructure and services. In an urbanizing world, cities will determine the economic future of countries. But cities will also face the challenge of urbanization of poverty. Globalizing economies will accentuate increasing competition between cities. The


demographic and economic pressures will heighten concerns of equity, environment,

quality of life and sustainability. Each city is unique. Therefore both the problems and

solutions should be identified locally.

The Indian Urban Challenge: India has second largest Urban System in the world. Indian cities contribute 55-60% of GDP. However, 1% households without tap water in premises and several cities have only 2 – 4 hours of supply, around 43% households without sanitation lines, 23% live in abject poverty, 40 million people live in slums and around 30% households live in single room tenements .This reveals that Urban Infrastructure in India is severely stressed. Municipalities and Corporations in disarray: Demographic shift to urban areas unlikely to slow down and the cost of inadequate infrastructure is enormous. Municipalities and Corporations in India are constrained by archaic rules and procedures. They are unable to meet rising demand for services and are unable to raise resources. The Reasons for poor services include population pressure, absence of long term planning, governance issues, inadequate cost recovery and precarious financial position of ULBs, poor operation and maintenance of population pressure, improper maintenance of assets, inadequate capacities and adamant mind-set up against change. Dimensions of Urban Poverty: Economic dimension - lack of resources, food security; Physical dimension - lack of adequate shelter and places of business: Ecological dimension- lack of sanitation and water; Social dimension - lack of education, health care etc , leading to enhanced vulnerability of women, children and the old and Political dimension: lack of choice or voice. Emerging Urban Realities Smart cities is the catchphrase as Prime Minister, Sri Narendra Modi's government lays the groundwork for his ambitious program

aimed at setting up 100 such urban settlements nationwide. Sri Modi's vision for advanced cities that benefit from the latest technology has finally begun to take shape with the Ministry of Urban Development identifying almost all the locations where they will be built as well as existing cities that are to be remodelled on these lines.This done, the ministry has asked the 22 states where the programme will be implemented to send detailed project reports so a final blueprint can be outlined. ‘Smart cities incorporate some key concepts that almost any modern city is bound to have – in Korea, China or Singapore. The smart Cities must have a design or a blue print. ‘They usually have house populations of 1 million or more. While planning the smart city, care is taken to ensure that all drainage systems, water, electricity and gas utilities, and waste management systems are put in place right at the outset. The master plan clearly identifies industrial, residential, commercial, educational, entertainment, and recreation and shopping areas. All these are designed in such a way that no residence or place of work is more than five minutes away from a mass transport system (bus, metro or train). Thus, the need for private transport gets minimized, in turn allowing for a better environment. Typically, since cities also promise security and stability, expect lots of surveillance equipment to be in place right from the beginning. Also expect Information and Communications Technology (ICT) to play a big role in administration. Unlike sprawling cities of the previous centuries, modern cities have compact buildings, thus offering better management of drainage and utilities. And since, no city can be appealing without good schools and hospitals, care is taken to ensure that such social infrastructure is in place before the factories and workplaces come up. Once the workplaces are ready, workers move in with their families, and the usual hum of a well-


ordered city begins to remind everyone that this is a vibrant, livable city. Yet, it must be remembered that smart cities are not only about constructing eco-friendly buildings. They are highly conceptual in nature, working on ways to make a city which actually changes the quality of life and even the day-to-day cost of living there. Good cities also require good administration. That is why India decided to build the best of its cities under the shelter of Article 243-Q of the Indian constitution which provides for independent (non-political) administration of cities identified as ‘industrial cities.’ The goals of smart cities also include a collective city vision and action plan aimed at improving urban governance and management, local economic development, and systematic and sustained reductions in urban poverty.

Smart City Philosophy: In an urbanizing world, cities will determine the economic future of countries. But cities will also face the challenge of urbanization of poverty and other evils. Globalizing economies will accentuate competition between cities. Smart city technologies can have a dramatic impact on the prosperity of a region. The demographic and economic pressures will heighten concerns of equity, environment, quality of life and sustainability.

Fig: Elements of Smart City

Hence a city must find the best way in relation to its local circumstances to promote its economy and compete, give citizens a sustainable quality of life, give due share of economy and life to the poor. Smart city philosophy is that maximum comfortable and qualitative life by providing best governance. Its mission is to promote virtue and happiness. The purpose of governance is to provide men a general saturated welfare. The smart city is thus originating from the imperfections of an ordinary city. The smart city is a master of itself; its character is sustainability and durability. Every individual ought to have some occupation in the city, the one in which his natural capacity is best adapted. The ideal smart city forms a complete unity, supported by workers, stakeholders, politicians, businessmen, educationalists, doctors, lawyers, engineers, students and persons from all walks of life. It is the instrument of a new civilization and a moral culture. It must have definite workable plans for higher education, health, sanitation, cleaning, business, religious, family, environmental pollution, disaster, water content, energy, governance, welfare, administrative, implementation, monitoring, town planning, zoning, road net work, and service. It is a perfect city embodying the principles of welfare for all, motivated by social justice and social accountability. It is barred from all utopian ideas and extreme rationalistic features. It is based on insight, co-operation, freedom and friendship. Smart cities recognize that while there are common issues, each city has its own characteristics and that it is for civic leaders and citizens to determine their city’s own future. Smart City supports local assessments and solutions, and provides ways and means in which these can be considered from a wider perspective. And places great emphasis on the lead being taken by the city itself, with the urban poor and local business leaders actively engaged within a wider

Smart

City

Smart educatio

n

Smart Energy

Smart IT communications

Smart Buildings

Smart Health

Water, waste

water and sanitation

Smart Environ

ment

Smart Governa

nce


participatory process – in short, local ownership of the process is vital. Formulating a Smart City Plan (Conversion of Cities to Smart Cities): Step 1.City Assessment - Opportunities, Strengths, Risks, Weakness, Unmet demand/gap and vision. Step 2 Future perspectives - Direction of change and expectation, Economic Vision, Infrastructure vision, Service Vision. Step 3 Strategies for development - Options and strategies, Link with reform agenda, Criteria for prioritization. Step 4 City Investment Plan - Estimate level of investment, financing options. Measures to increase their effectiveness and efficiency: The Smart Plans are preoccupied with the visualization of an end state picture of the town. A Smart City Plan should however constitute a program for a step by step implementation. Not a once for all exercise. Periodical reviews as the step by step implementation proceeds will enable taking stock of the dynamically changing situation, and making adjustments to suit changing needs and requirements. Responsibility areas of a Smart City Infrastructure, built environment, economic

development, energy, health and human services, payments, public safety and security,telecommunications, transportation, waste management, water and wastewater, the enablers, citizen engagement, computing resources, connectivity, data management, finance and procurement, instrumentation and control, inter operability, policy and leadership, security and privacy. Fortunately, there are thousands of smart city projects and pilots underway around the world. A step by step approach is required: Back logs of centuries of unplanned development of the cities cannot be wiped out in a single plan. A step by step approach is required for this purpose. This would be easy if short term objectives are understood as a step towards the long term goals. Improving Urban Governance and Management: Participatory decision-making and management: Greater participation by citizens in local elections, change of ULB mindset from regulatory to developmental, micro-planning, social accountability, effective use of RTI.

Special Economic Zones Smitha VS

(ACMA, Municipal Finance Specialist, UMC)

SEZs play a key role in rapid economic development of a country. It plays a key role in the constitution of Smart Cities. In order to overcome the shortcomings experienced on account of the multiplicity of controls and clearances , absence of world-class infrastructure, and an unstable fiscal regime and with a view to attract larger

foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April 1, 2000. The prime objective was to enhance foreign investment and provide an internationally competitive and hassle free environment for exports. The idea was to promote exports from the country and realising the need that level


playing field must be made available to the domestic enterprises and manufacturers to be competitive globally.

SEZ is a geographical area with economic laws that is more liberal than a country's typical economic laws. It covers a broad range: Free Trade Zones (FTZ), Export Processing Zones (India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965.), Free Zones (FZ), Industrial Estates (IE), Free Ports etc. Goal is a structure that allows maximum foreign direct investment by foreign investors. The Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 which received Presidential assent on the 23rd of June, 2005. This policy intended to make SEZs an engine for economic growth supported by quality infrastructure complemented by an attractive fiscal package, both at the Centre and the State level, with the minimum possible regulations. A geographical area with economic laws that is more liberal than a country's typical economic laws. Certain localities which offer tax and other incentives to their resident businesses. Although India’s SEZs are relatively new, they now form a significant part of its appeal as both a sourcing and manufacturing destination. Historical perspective: 1979-80: China embarked on SEZ experiment - Shenzhen built as largest SEZ: 327 sq km - Brazil, India, Iran, Jordan, Kazakhstan, Pakistan, Philippines, Poland, Korea, Russia and Ukraine have replicated the experiment. Indian SEZs: Objectives: Three Es and two Is: Increase export, Increase employment, Increase economic activity, Increase investment, Increase infrastructure

Setting up a SEZ: Any private/public/joint sector or state government or its agencies can set up an SEZ, including a foreign agency. The developers can apply to the Indian Board of Approval to establish a SEZ where one currently doesn’t exist. Companies, co-operative societies, individuals and partnership firms are all able to file an application, and simply need to fill out the Form-A that is available on the Department of Commerce’s website. The information you have to fill out on the form ranges from basic details, such as the name, address and personal information of the applicant, to more specific details of the proposal, such as the type of land it will be set up on and its means of financing. The amount of land that your proposal requires will determine what type of SEZ it will be. The different types are: Multi Sector SEZ (requiring a minimum of 1000 hectares of land); Sector Specific SEZ (requiring a minimum of 100 hectares); Free Trade and Warehousing Zone (FTWZ) (requiring a minimum of 40 hectares); IT/ITES/handicrafts/bio-technology/non-conventional energy/gems and jewellery SEZ (requiring a minimum of 10 hectares).The proposal will firstly be considered by the State Governments before it receives formal backing from the Board of Approval. The advantages of setting up a sourcing or manufacturing platform within a SEZ are numerous and include: Duty free domestic procurement of goods for the development and maintenance of your company; 100% income tax exemption on export income for first five years, 50% for five years following; Exemption from Minimum Alternate Tax, Central Sales Tax, Service Tax, State Sales Tax, and a number of other taxes usually levied by local governments; External commercial borrowing allowed up to US $500 million a year without restriction; Permission to manufacture products directly, as long as the goods you are producing fall within a sector which allows 100% Foreign Direct


Investment (FDI) . In all SEZs the statutory functions are controlled by the government. Government also controls the operation and maintenance function in the seven central government controlled SEZs. The rest of the operations and maintenance are privatised.

Business units that set up establishments in an SEZ would be entitled for a package of incentives and a simplified operating environment. Besides, no license is required for imports, including second hand machineries. Inter-unit sales are permitted as per the SEZ policy. A buyer procuring from another unit pays in foreign exchange. Role of State governments: State governments will have a very important role in the establishment of SEZs. Representative of the state government, who is a member of the inter-ministerial committee on private SEZ, is consulted while considering the proposal. Before recommending any proposals to the ministry of commerce and industry the states must satisfy themselves that they are in a position to supply basic inputs like water, electricity, etc. The performances of the SEZ units are monitored by a unit approval committee consisting of development commissioner, custom and representative of state government on an annual basis. (Developer: a person/State Gov approved by GoI to set up a SEZ. Co-Developer: a person/State Gov

approved by GoI to do infra/authorized operations, SEZ Unit: a unit approved by Unit App Comm to engage in manufacturing/services within SEZ, DTA : domestic tariff area: all of India except SEZ area} Labour Laws Normal labour laws are applicable to SEZs, which are enforced by the respective state governments. The state governments have been requested to simplify the procedures/returns and for introduction of a single window clearance mechanism by delegating appropriate powers to development commissioners of SEZs. SEZs located in India: There are many functional SEZs located such as at Santa Cruz (Maharashtra), Cochin (Kerala), Kandla and Surat (Gujarat), Indore (Madhya Pradesh), Chennai (Tamil Nadu), Visakhapatnam (Andhra Pradesh), Falta (West Bengal) and Noida (Uttar Pradesh) in India. In addition there are 18 at Positra (Gujarat), Navi Mumbai and Kopata (Maharashtra), Nanguneri (Tamil Nadu), Kulpi and Salt Lake (West Bengal), Paradeep and Gopalpur (Orissa), Bhadohi, Kanpur, Moradabad and Greater Noida (UP),Vishakhapatnam and Kakinada (AndhraPradesh), Vallarpadam/Puthuvypeen (Kerala), Hassan (Karnataka), Jaipur and Jodhpur ( Rajasthan) etc. Points of Criticism (a)Diversion of prime agricultural land, (b)Massive human displacement, (c)Poor compensation, (d)Accentuation of regional imbalances, (e)Real estate projects, (f)Displacement of agricultural labour.

Transport Planning- Tips Girish Kumar M

Urban Infrastructure Specialist, UMC Kerala

Transport planning is an important ingredient to Smart City concept. It is a scientific approach to assess existing traffic

characteristics & transport pattern of a city using Urban Transport Planning System (UTPS) model. It is also used to forecast traffic and transport pattern for short, medium and long term for city. Traffic represents modes of transport moving on the surface such as car, jeep, bus, scooter, Tonga (horse-cart), etc including pedestrian. Public Transport operates on fixed schedule/


route /fare for public such as bus, rail, streamer. Intermediate Public Transport (IPT)/ includes Para transit - auto-rickshaw, cycle rickshaw, tonga, 6-seater, taxi etc. Transport Plan Study-steps: Review of earlier studies / literature, delineate study area/traffic zone/screen lines etc for carrying out primary surveys, conduct primary & secondary surveys (land use, population, economic & travel pattern), analysis of survey data, development of transportation model & its validation, traffic forecast for horizon years, development of alternatives scenarios & its evaluation,recommendations. Study Area: It is a boundary known as external cordon (EC) to restrict primary & secondary surveys limit for efficiency & economy, area within EC is surveyed intensively, outside EC changes in land use pattern are less significant. Traffic Zones: Subdivision of area into traffic zones – (a)External zones-traffic zone outside EC(country), (b)Internal zones-for internal traffic within study area should give accuracy & to allow reliable information on trip generation etc. Transport Planning Study: Identification of traffic surveys, finalisation of primary surveys proforma, identification of survey locations, finalisation of survey duration, conduct of pilot surveys, carrying out actual surveys, finalisation of traffic zones, Homogenous in land use & traffic characteristics, Conform to natural & physical barriers, should not be very large, preferably have geometrical shape for centroid determination , finalization of traffic nodes, coding of proforma, punching of data, analysis of primary & secondary survey data. List of Primary Surveys: House-hold survey, traffic volume count survey, passenger & goods origin-destination survey, road network inventory, IPT/PT user & operator survey. (Definitions: Origin-the location of where trip start,

Destination-location where trip ends, Cordon-imaginary

line which defines boundary of the study area, Desire line-a

straight line connecting zone centroids-representing travel

between zones, Screen line- a line established to divide the

study area for the purpose of checking the accuracy of

survey)

Stages of Transport Planning - (a) Inventories-surveys, zoning, (b) Trip generation (decision to travel), (c) Trip distribution (choice of destination), (d) Model split (mode choice), (e) Traffic assignment (route choice), (f) Plan preparation & evaluation Trip Generation: Estimation of number of trips produced in or attracted to a given zone - identify parameters for developing model and development of model Multiple regression analysis: Y=b0+b1(x1) + -----+bk(xk) (Y=dependent variable trips generated or attracted, X1,

X2= independent variables cause generation of trips b0,

b1=regression coefficients)

Category Analysis: Y=1100+0.095 x1+1.15 x2 Y: no. of trips produced for work purpose in a zone, X1:no. of workers in zone, X2-no. of vehicles in zone Validation of model: sensitivity analysis,-forecasting of trips for horizon year Trip Distribution: selection of trip distribution model Gravity Model: Tij=GiAjFij/Sum for j-I to n (AjFij) (Tij=no. of trips from zone i to zone j;Gi=trips generated in

zone I;Aj=trips attracted to zone j; Fij=Empirical derived

Friction Factor;N=number of traffic zones)

Traffic Assignment: It allocates a given set of trip interchanges to a specific transport network or system. Uses: To estimate volume of traffic on links for any future year or to simulate present conditions. Requires: Complete description of either proposed or existing transport system & matrix of inter-zonal trip movements. Purpose: (a) to assess deficiencies in existing network by assigning future trips to the existing network, (b) to evaluate effects of ltd. improvements (c) to develop construction priorities by assigning trips,(d) to test alternative transportation system (e)


to provide design hour volumes & turning movements. Methods: 1.All or nothing assignments, 2. Diversion curve assignments, 3. Capacity restraint assignments. Model Split: Defined as proportionate division of the total person trips between different modes of travel - Expressed as fraction, ratio, % of total trips - Assumptions are based on measure of competitiveness on following: Characteristics of journey, person & transportation system. Sum up: Basic of transportation planning, Steps in transport planning process in brief ,Identification of surveys for State Road Transport (SRT) ,How to conduct surveys and its analysis, Four stages of transport planning with its uses- Trip generation, Trip distribution-Modal Spilt: Traffic assignment, Relevance of Transport

Planning - Extremely relevant/useful for STU officials/town planners etc in assessing existing travel pattern of city commuters and to forecast traffic demand to prepare structure/master plan, etc using Scientific Technique, Transport Planning: application - A. Comprehensive T&T study, B. Limited Transportation study, Bus/Rail improvement study,-traffic demand forecasting,-routing/scheduling/terminal improvement - model split (optimum fleet),- Fare policy-Road improvement or traffic management/parking schemes-To prepare a transport plan for a city for horizon years (short/long term) based on scientific techniques -To assess bottlenecks in the existing transport system-To relieve city traffic congestion & provide better transport services for public.

Public Private Partnership (PPP) Dr N Vijaya Kumar and Smitha VS

Public Private Partnership (PPP) Project means a project based on a contract or concession agreement, between a Government or a statutory entity on the one side and a Private Sector Company on the other-side, for investing in construction and maintenance of infrastructure asset and / or delivering an infrastructure service. Stage One: Establish policy & legislative framework, Initiate central PPP policy unit to guide implementation, Develop deal structures, Get transactions right & develop public sector comparator model, Begin to build marketplace, Apply early lessons from transport to other sectors. Stage two: Establish dedicated PPP units in agencies, Begin developing new hybrid deliveries models, Leverage new sources of funds from capital markets, Use PPPs to drive service innovation, PPP market gains depth –use is expanded to multiple.

Stage three: Refine new innovative models, More creative, flexible approaches applied to roles of public & private sector, Use of more sophisticated risk models, Greater focus on total lifecycle of project, Sophisticated infrastructure market with pensions funds & private equity funds, Underutilized assets leveraged into financial assets, Organizational & skill set changes in government implemented to support greater role of PPPs. Requirements and Expectations: PPPs can follow a variety of structures and contractual formats. However, all PPPs incorporate three key characteristics (a) a contractual agreement defining the roles and responsibilities of the parties (b) sensible risk-sharing among the public and the private sector partners, and (c) financial rewards to the private party commensurate with the achievement of pre-specified outputs.


Stakeholders’ Interests in PPPs

Key Benefit of Public/Private Partnership: Global Experience shows that the most cost effective provision of good quality bus services is achieved from a public private partnership where: (a)the public sector retains responsibility for planning, management and regulation of public service provision, (b) the private sector takes responsibility for public service supply. Public Sector Responsibility: Political commitment to the project, adequate project development – for Bankable Projects, provide information required to take informed decision, reduce risks and uncertainty, level of project development depends on the intrinsic strength and viability of the project, environmental, social, financial, legal aspects, risk identification and mitigation, Administrative framework and readiness, State Support - through land acquisition, grant, regulatory approvals, Establishing the policy, setting the legal and regulatory framework, tendering the contract, managing the contract, recognition to partner, provision for re-evaluation after

certain period of time, well defined exit routes and effect of termination.But above all - a Fourth ‘P’ - People – is most critical for PPP success - Government must ensure the commercial viability, structure the project to include and ‘ensure’ all possible revenue streams, VGF ,explore annuity based options in social infrastructure projects - Private Must see the “Welfare” mandate of the Government - Continue working despite the dispute – Just like family. True Essence of Partnership – Value the Project as equivalent to “Family”, Spouses are Partners Children are the Users. Project Development and BPM: Project Development / structuring the project, identification of viable projects, viability study – cost, revenue streams and IRR, identification of risks. Risk Mitigation – Risk allocation matrix, deciding on form of PPP, project development fund, funding the study of feasibility, bid process management, preparing concession agreement. PPP projects should: provide equivalent or better value for money than a pure public

Government

-Maximize Revenue

-Provide universal access to

service

-Ensure affordable basic

service

-Promote fair competition Consumers

Employees

-Ensure fair pricing

-Improve quality and

reliability of service

-Increase accountability and

responsiveness

-Ensure fair treatment of

present employees

-Provide career

opportunities

-Improve productivity,

efficiency, and morale

Stakeholder

Interests

-Ensure stable, transparent

regulatory process

-Enable organizational

restructuring and asset

allocations that favor efficient

operations

Investors


sector project, develop base data to be used for measurement, develop incremental benefits (“good investment”) may accrue from: speedier Implementation (fiscal constraints), total long-term costs (life costs) of the operation, better service (cost & efficiency) and coverage. Risks: (a) Business Risk – cost overrun, operating risks, revenue risks, financial risk – debt service coverage, exchange rate (b) Political Risk – cost rate regulation, expropriation (renationalize, impose sever taxes/regulations) (c)Other Risks :technology and environmental.

Proper Allocation of Risks:

Risks Generally allocated to Public – site risk, inflation risk, variations or changes in service specifications risk, network Risk, voluntary termination risk, compensation on termination, Private Sector Insolvency. Risks Generally allocated to Private – design and construction risk / completion risk, technology risk, latent defect risk, operation and maintenance risk, demand/patronage risk, default risk. Risks Generally shared by both – change in law risk, – uninsurable Benefits – refinancing

Scrutinizing the legal details in a PPP Agreement: change of scope, change in Law, public grievances, price indexation, damages for delay, dispute redressal, political commitment to the project ,administrative framework and readiness, State Support - through land acquisition, grant, regulatory approvals, recognition to partner, well defined exit routes and effect of termination.

GoI JnNURM and UIDSSMT have provisions of funding the project development - Project Development Funds in States like Gujarat, Karnataka, Punjab, Rajasthan, Tamil Nadu, Andhra Pradesh,

and Uttar Pradesh - Urban Development Fund in Kerala - MUIF – Maharashtra Urban Infrastructure Fund - Proposed Project Development Fund for PPP Projects in Maharashtra Government’s Initiatives for supporting PPP in Infrastructure Development:While encouraging PPPs, five constraints have been identified : (a)Weakness in enabling policy and regulatory framework in most of the infrastructure sectors continues to be a constraint (b)The market presently does not have adequate instruments and capacity to meet the long-term equity and debt financing needed by infrastructure projects (c) Lack of capacity in public institutions and officials to manage the PPP process(d) Lack of shelf of credible, bankable infrastructure projects, which could be offered for financing to the private sector (e) Lack of capacity in the private sector to fully meet the challenge of investing in a very large number of projects (f) Weakness in enabling policy and regulatory framework. Centre and States are formulating PPP Policies and regulatory frameworks. Progressively more sectors have been opened to private and foreign investment - Levy of user charges is being promoted, Regulatory institutions are being set up and strengthened, Fiscal incentives are given to infrastructure projects, Standardised contractual documents including the Model Concession Agreement are being notified . Approval mechanism for PPPs in the Central sector has been streamlined through setting up of PPP Appraisal Committee (PPPAC) - Permitting FDI up to 100% on the automatic route in several infrastructure sectors- Adequate instruments and capacity to meet the long-term equity and debt financing, Setting up of India Infrastructure Finance


Company , Launching of a new Scheme to meet Viability Gap Funding (VGF) of PPP projects- Setting up of infrastructure funds are also being encouraged - Multilateral agencies such as ADB have been permitted to raise Rupee bonds and carry out currency swaps to provide long term debt to PPP projects - Merchant Bankers and multilateral agencies are also being encouraged to provide credit enhancement services for raising cheaper money from market, External Commercial Borrowings(ECB) norms have been eased and the overall limit have been raised. Indian Financial Institutions are also being encouraged to develop an appetite for financing instruments such as take-out finance. Lack of capacity in public institutions and officials State Governments are being provided with technical assistance in the form of in-house PPP and MIS experts from ADB to manage the process for project development. This assistance would include provision of a panel of select law firms to provide legal support: Various Capacity Building programs are being organized by DEA, GoI , Preparation of a manual on PPPs to guide the users and undertake training programmes for public officials; A panel of Transaction Advisers has also been shortlisted. Some States like Maharashtra, Madhya Pradesh, Karnataka have formed their own panel of Transaction Advisors, in addition to GoI panel.

Financing: Identifying activities, Capital Costs – Bonds, tax exemptions, grants, Revenue Resources, User Charges, Dedicated taxes – fuel surcharge (Government of Kerala has recently introduced this surcharge for constructing houses for the houseless),Value Capture – Impact Tax, Advertisement Rights, Other Project Development Rights associated with the project, Viability Gap Funding.

Lack of shelf of Projects:

For providing financial support for quality project development activities to the States and the Central Ministries a corpus fund titled 'India Infrastructure Project Development Fund' (IIPDF), with initial contribution of Rs. 100 crore has been set up. GoK introduced Urban 20-20 to develop a shelf of Projects. This scheme is meant to give professional and financial support to the Urban Local bodies in Kerala for preparing quality project reports for addressing urban infrastructure gaps. UMC Kerala has compiled about 105 projects from the Municipalities and Corporations of Kerala, which is conceived and prepared by various consultants.

Smart City -Tips

Technologies can have a dramatic impact on the prosperity of a region. That urbanization places tremendous strain on city resources, forcing them to abandon their inefficient

management silos for collaboration driven by real-time data. Characteristics of Smart Cities Smart Governance: Smart Cities will begin with Smart Governance.


Smart governance is a process of reform in the way government works, and shares information with the public to deliver services. This brings government by using technology such as e-services, social media, applications and other platforms. Complaints and suggestions cannot be ignored and must be dealt in a timely and professional manner. It is a win-win situation for everyone. City mayors / municipal commissioners or city development authorities will play a pivotal role in implementing of reforms in the smart cities. Smart Energy: Innovation in Smart Energy to accelerate Smart Cities India operates the 3rd largest transmission and distribution electricity network in the world. But there is a number of challenges including, inadequate access to electricity, supply shortfalls, huge losses, reliability and theft. The evolution towards smart grid will address these issues and transform the existing network into a more efficient, safe and reliable grid that would provide electricity access to all. Implementation of smart meters will allow utility companies to collect and analyse data from every meter, to ensure accurate billing. It is estimated that India will install 130 million smart meters by 2021.Central and state governments could implement new energy laws, compliance structures, training programmes and offer incentives for efficiency projects.

Smart Environment: Sustainable smart urban environment to boost Smart Cities India's installed electricity generation capacity at, 250 GW, is the world's fifth-largest, with power generation from coal, natural gas, hydro, oil, nuclear, solar, wind, bio-gas, etc. India is mainly dependent on coal to produce electricity, which is also the main source of greenhouse gases, causing global warming. Therefore, there is a need to focus on more efficient use of coal or alternate fuels and renewable energy. The potential for renewable energy in India is estimated at 249.18 GW (Source: Novonous

Research), and the installed capacity is 31.69 GW as on 31 July 2014. (Source: Central Electricity Authority)The Ministry of New and Renewable Energy (MNRE) has a target to achieve an installed capacity of 41.40 GW by 2017, which is a US$10.51 billion opportunity. Water / Waste water / Sanitation: The demand for clean water continues to grow for domestic and industrial purposes. It is estimated that around 38 million Indians are affected by waterborne diseases annually. More than 38 billion litres of sewage is generated in India on a daily basis, but only 30 per cent is treated. The untreated sewage discharged into rivers, ponds or lakes, which are the main source of municipal water.Sewerage systems commonly suffer from poor maintenance and negligence, leading to overflows with environmental and health concerns. Municipal authorities are building community toilets, and are working on incentives to build additional sanitation facilities. To overcome water supply, waste water and sanitation issues, cities seek to incorporate the latest technologies, products, solutions, systems, etc., and efforts are on to collate data to diagnose problems, and to prioritize and manage maintenance issues. Solid Waste: Around 60 million tonnes of Municipal Solid Waste (MSW) is generated in India per annum. With rapid urbanization and changing lifestyle and food habits, the amount of municipal solid waste has been increasing. Dumpsites in almost all cities are handling more waste than capacity, and finding new landfills near cities is almost impossible. Most dumpsites lack systems for leachate collection, landfill gas collection or monitoring, etc. This result in ground and surface water contamination from runoff, air pollution caused by fires, toxic gases, and odour, and public health problems due to mosquitoes and other epidemics. There is a focus on solutions to reduce waste and environmental pollution, including to


generate energy, and to free up land that would otherwise be used for landfill. Smart IT and Communications: Smart IT and Communications is the nerve centre for Smart Cities- The governments and residents are starting to recognize the role of technology in meeting objectives and to make cities more efficient. IT and communications technology will be a key component of the investments allocated by the Governments to build smart cities. City administrations are aware of issues like public safety, security, prevention of accidents, terrorism, etc. and to provide swift responses with the help of technologies to monitor, manage and detect critical situations. Smart cities will use IT to improve the quality of life of its citizens by providing citizen services over communication networks. Smart Health: Smart Health is the lifeline for Smart Cities The healthcare sector in India is expected to grow at a CAGR of 15 per cent, to reach USD 90 billion in 2017 from USD 58.2 billion in 2014. The per capita healthcare expenditure will increase from USD 57.9 in 2011 to USD 88.7 by 2015.The availability of only 0.9 hospital beds for every 1,000 patients in India, and only 0.7 physicians per 1,000 people in India. With 360 million policies, India's life insurance sector is the largest in the world. Health care providers in India are expected to spend USD 1.08 billion on IT services and software in 2014, which has increased by 4 percent from the previous year India's health budget was enhanced by 27 percent in FY 2014-15 to

USD 5.86 billion, with special a focus on improving affordable healthcare for all. Smart Education: Smart Education powering citizens for Smart Cities India is home to roughly 600 million people under the age of 25 years, twice that of the U.S. population. India has around 1.4 million schools and more than 35,000 higher education institutes. Rising incomes, rapid urbanization, increasing awareness about the importance of quality education has resulted in robust growth of this sector. Smart education will change the way the studies happen. Students and teachers will migrate from schoolbooks to e-learning delivered through computers, tablets and mobile devices. Schools must adopt these technologies and upgrade the infrastructure to allow students and schools to stay connected with real time information Smart Buildings: Smart Buildings is the foundation for Smart Cities The government of India needs to develop 110 million housing units to achieve the vision of "housing for all by 2022". Encouraging private sector participation in urban affordable housing could help achieve this vision. More than 2,771 green buildings projects are registered with the Indian Green Building Council (as on August 2014) with a footprint of over 2.23 billion sq ft IGBC) Buildings in India consume around 40 percent of total energy generated, and 20 per cent of water (Centre for Science and Environment)Buildings in India generate 40 percent of the carbon emissions, 30 per cent of solid waste, and 20 per cent of water effluents (Centre for Science and Environment). It is estimated that India can

save around US$ 42 billion every year with efficient management of lighting, heating, air-conditioning, etc. (McKinsey & Company).Smart building technologies

reduce maintenance costs by 10-30 percent, and enhance occupant's comfort, health and safety. (Team UMC)

Cities as Smart Cities

GIFT CITY

The Surat Municipal Corporation (SMC) already announced its partnership with

Microsoft India to transform Surat into a smart city by introducing several citizen


centric services with the help of global software giant. Surat,,as it claimed, is the fourth fastest growing city in the world with a population of 50 lakhs. 80 percent of the world's diamonds are processed in Surat, while 40 percent of India's demand for textiles is met by the city, SMC will work with Microsoft and its partners to bring solutions for water management and urban planning, which include building plan approvals. In coming months, Microsoft will help SMC to roll out these services through its City Next program.It is claimed that

Microsoft's City Next program will make citizen services more responsive besides increasing transparency, efficiency and productivity of departments. Surat has already implemented several e-Governance and citizen oriented solutions developed on Microsoft technologies in the past. These services include Property tax payments, birth and death registration, grievance redressal system, vaccination alert system, application tracking systems, solid waste management system, etc. - Team UMC

SMART CITY-KOCHI

This is a 3000-crore IT township project coming up in Kochi, Kerala. Once the project is completed, it is expected to generate 90,000 jobs. This project was originally proposed in year 2004 during the tenure of Mr. A. K. Antony as chief minister. The construction work of Phase 1 was started on 5 October 2011. The first phase was expected to be completed within 2 years and could generate approximately 3000 jobs.Smart City Kochi is planned as a vibrant new mixed-use community and premium knowledge-based Special Economic Zone (SEZ) that will attract international investment and attract the best talent to the state of Kerala. The master plan creates a campus environment which exemplifies cutting edge technologies, sustainable infrastructure, intelligent building design and support systems to promote the growth of knowledge-based industry companies located in India. Ideally situated with easy access to the Cochin International Airport, and just 20 kilometres from the city centre, Smart City Kochi is well positioned to become an economic

centre for the region and a community of choice for India. Framed and bisected by the Kadamprayer and Edachira Thodu rivers, and containing rolling hillsides and unobstructed views, the three separate land areas making up the site present interesting natural features and amenities that will be enhanced through the planning and development of the site.

The Kochi Smart City concept: Clustering synergistic knowledge-based industries in accessible and well-serviced building facilities allows them to share a highly-educated labour market and operate efficiently. Granted approval by the government as a designated Special Economic Zone (SEZ) township in 2007, Smart City Kochi will be developed primarily as a workplace for knowledge-based companies, yet it will also be a healthy and thriving contemporary community with many supporting uses and amenities for both residents and visitors.


Centred on the notion of technological innovation and sustainability, this will be a model of progressive workplace development, representing the highest international standards, and achieving the triple bottom line of economic, social and environmental sustainability. All buildings will target at minimum LEED Gold certification. Smart City Kochi is a

development of Smart City, a subsidiary brand of Dubai Properties based in Dubai. This site will build on the momentum and successful models from Dubai Internet City, Dubai Media City and Dubai Knowledge Village—it will be linked into a broader global knowledge transfer and network of similarly connected knowledge based communities.

Team UMC

News Tips

PM Narendra Modi reviews progress in Smart City project Prime Minister Narendra Modi reviewed the progress on various urban development programmes including addressing of gaps in core physical infrastructure across 500 cities and steps to operationalize the Smart Cities initiative. Noting that towns and cities are

emerging as key drivers of economic growth, the Prime Minister emphasized that the economic growth model of a city should form an essential part of its Smart City Vision vision. (PTI Mar 18, 2015)

The Centre will be a facilitator with regard to smart cities

Urban Development Minister M Venkaiah Naidu said the Cabinet is likely to clear the government's flagship smart city project soon and it will be rolled out from next month. The cities must qualify themselves by standards, sanitation, revenue, infrastructure etc.The Centre will be a facilitator with regard to smart cities and

government will do the hand holding. As far as housing for all is concerned, Mr Naidu said the Cabinet has approved it earlier but there was a need for comprehensive housing policy for both urban and rural segments. 'Housing for All' scheme targets construction of houses for all by 2022. (6

April 2015) – Team UMC

Each port will construct one smart city

The government is working on an ambitious plan to build one smart city each at the country's 12 major ports (Kandla, Mumbai, JNPT, Marmugao, New Managlore, Cochin, Chennai, Ennore, V O Chidambarnar, Visakhapatnam, Paradip and Kolkata ), at an estimated total investment of Rs 50,000 crore, Union Minister for Road Transport, Highways and Shipping Mr Nitin Gadkari has said. These will be green smart cities. Each city will be built

with an expenditure of about Rs 3,000-4,000 crore .These cities will be built as per international standards and have wide roads, green energy, advanced townships and greenery and have e-governance links, international standard facilities, special economic zones, ship breaking and ship building centres . Port water will be recycled. Port wastes will be turned into bio gas. Vehicles will run on bio fuel. Solar energy and wind power will be generated at


ports. These cities will be pollution-free and very green smart cities.- Team UMC

(ET 22 February 2015)

'Digital India'

Government has set December 2015 deadline to cover cities and towns with population of over 10 Lakhs as well as tourist destinations with Wi-Fi services as

part of Prime Minister's pet project of 'Digital India'. Top 25 cities have to achieve this target by June 2015. (7 February 2015) - Team

UMC

India and Spain are set to partner each other in the railways sector, join with Smart City concept

Spain has the second largest high speed train network in the world after China. Spanish Minister of State for Commerce Jaime Garcia Legaz said.that the 'Smart Cities' project is one of the key areas of expertise and Barcelona is one such example of the 'Smart Cities' project," Union Urban

Development Minister M. Venkaiah Naidu had visited Barcelona last year to learn about the Smart Cities project and the implementation of it by the Spanish Government in association with various industrialists. (2 February 2015) - Team UMC

Parameters for 'Smart Cities' Prime Minister Narendra Modi called for identifying parameters that could be laid down for the 'Smart Cities' initiative, adding that the project should improve the quality of urban governance, thereby lending greater strength to the overall governance processes of the country. Chairing a high-level meeting on the initiative in the national capital, Prime

Minister Modi asked the Ministry of Urban Development to convene a workshop of all central and state urban development authorities at the earliest and asked officials to identify the basics of infrastructure, quality of life, and citizen-centric services that would be essential to cities of the 21st century. (29 December 2014) - Team UMC

Cisco selects its first Smart City

Council Associate Partner (CISCO) has already selected its first smart city. The company says Visakhapatanam is the first that it will work to transform. Visakhapatnam, which did make the list of promising cities, is a port city of 1.7 million. In addition to trade, the city's top industries are agriculture and fishing, and related businesses. Cisco plans to make the

city much more high-tech. It plans to set up a skill development center and a business incubator. It will also improve education and healthcare through technology. Another area of focus for Cisco is to help the city improve its ability to recover from disasters. The city is typically hit by two cyclones each year. Team UMC

A Major Banking Investment Asian Development Bank says it’s committed to supporting India’s vision of

Smart Cities. It calls 2015 a milestone year for international development and says it’s


firmly behind the country’s smart cities efforts. One of its priorities is protecting resources and energy efficiency. It is calling on Indian city leaders to emphasize low carbon development and make smarter use of land and water. Transportation and improving services for the poor are also

areas of focus. Asian Development Bank says new technology will help, but cities also need to do more integrated planning, make more timely investments in their infrastructure and make much better use of their land. Team UMC

The Top 20 Cities

With this mind , analysing factors like household income, expenditure and variables related to standard of living, FIRST Smart Cities Council, along with the support of premier economic research firm Indicus Analytics, has put together a list of the Top 20 Promising Cities, with a population of over a million and excluding the metros, in India. FIRST Smart Cities Council has further explored the infrastructure opportunities in these already promising cities. The cities that made in the list include: Surat (Gujarat), Nagpur

(Maharashtra), Lucknow (Uttar pradesh),Vadodara (Gujarat), Thane (Maharashtra), Jaipur (Rajasthan), Visakhapatnam (Andhra Pradesh), Pimpri Chinchwad (Maharashtra), Indore (Madhya Pradesh), Navi Mumbai (Maharashtra), Kanpur (Uttar Pradesh), Chandigarh (Chandigarh), Kalyan-Dombivli (Maharashtra),Faridabad (Haryana), Gurgaon (Haryana), Ghaziabad (Uttar Pradesh), Bhopal (Madhya Pradesh), Rajkot (Gujarat), Ludhiana (Punjab), and Nashik (Maharashtra) - Team UMC

Make in India

Make in India is an initiative of the GoI, to encourage companies to manufacture their products in India. It was launched by PM Narendra Modi on 25 September 2014. The major objective behind the initiative is to

focus on 25 sectors of the economy for job creation and skill enhancement. The initiative also aims at high quality standards and minimising the impact on the environment.


Smt. R Girija IAS The newly appointed

Project Director, KSUDP and

Nodal Officer, CCBP, Kerala

Responsibility for the views expressed and for the accuracy of statements contained in the contributions rests with the author(s).

Please mail your articles and comments to:[email protected]

CCBP Kerala has signed the MOU with Institute of Management in Government (IMG) for

conducting around 12, 4 day residential training programs on Financial Management to 360

participants from various ULBs in Kerala. The main objective of the training is to equip all

financial staff with adequate training on municipal financial management, knowledge on

accrual based accounts system, to enable ULBs to bring 85% of properties under Tax record,

to enhance tax collection up to 90% , to mobilize financial resources through municipal bonds

and other market instruments ,to train the ULB staff to prepare monthly accounts, MIS reports

and other statements of accounts and analysis of financial statements etc. The target group of

trainees will be the Finance Standing Committee Chairmen, Municipal Secretaries, Revenue

Officers, Finance Officers/Accountant/ Superintendent , Department Heads, etc of the ULBs

in Kerala . The Urban Management Cell (UMC), Kerala will facilitate the training.

(Team UMC)

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