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Load sharing written by B Krishna Mohan, published in Financial Chronicle. July 7, 2014

For the BJP, the urban voter is an article of faith. Not unnatural, because that is where the party’s essential support base comes from. So, when Narendra Modi unveiled his 100 smart cities concept during the course of the election campaign, he was taking off from what was already well discussed in technology organisations: the need to accommodate the aspirations of the newly emerging Indian middle class which was finding itself stifled in the over loaded urban centres, bursting at the seams – with nowhere to go.


Finance minister Arun Jaitley, in the course of his budget speech, said as much. “Migration from rural areas to cities is increasing with the burgeoning neo-middle class aspiring for better living standards,” he said. “There is no way out except to build more cities.”


In any case, urban planners are agreed that existing cities would become unlivable if new ones are not developed. BJP’s 100 smart cities envisage satellite towns of larger cities. In addition, some existing mid-sized cities too would be modernised. That would be the only way to reach the century mark.


To kick-start the process, the finance minister has provided Rs 7,060 crore in the current financial year for the smart cities project. According to Srinivas, principal counselor, CII Green Building Council, planning for smart cities should begin by keeping green concepts in view. The floor area ratio (FAR) should be relaxed and growth should be vertical only to reduce travel, and thereby fuel the demand.


The smart city, true to its name and nomenclature, would use sensors and tracking gadgets for cutting down wastage in usage of power and water resources. “There should be incentives for people taking up green concepts and the smart city should advocate inclusive communities – all strata of the society should live together,” Srinivas said, adding that if the working class is forced to live in far off places, there will be extra burden on the transport network.


According to Somy Thomas, executive director, consultation, valuation and advisory, Cushman and Wakefield, a lot of details have to emerge for the concept, which holds the promise of being sustainable. “Linking everything in the city is the key,” he said citing Lavasa as an example of a smart city. Power, water, sewage will be monitored by city managers.


“The advantage is that smart cities will be able to know the power demand in a particular location and make arrangements to meet them. Same is the case with water and other utilities,” Thomas said. The success hinges on an effective transport system.


Though there will be new development and planning, the existing civic authorities will have to play an enabling role. “The extent varies with Tier II and III cities. Availability and handing over is a problem,” he said, adding that the project is long term in nature and may spur demand for core materials – cement, steel and power and many others.


Thomas believes that from the real estate perspective, smart cities will help in price appreciation of properties. However, projects that remain half-started or incomplete will turn out to be a burden and may end up defeating the purpose of sustainability.


At present, real estate companies are facing the brunt of high interest rates, tight liquidity, large debts and lending curbs.


Smart cities are not merely use of superior technology. It should be self sufficient in terms of food, vegetables and should focus on local employment generation. “Smart city planning should favour green concepts from day one. They will call for a new approach to planning, where vertical growth will be the key,” explains Srinivas of CII-GBC.


In Mumbai, the FAR is 15. In global cities like New York, it is 30, he said, adding that cities with population of about 7.5 lakh will be able to enjoy the full benefits of smart cities.


The current installed generation capacity is about 2.5 lakh mw and the demand for power by 2040 is likely to go up to about 5 lakh mw. The best way to deal with this situation is to reduce demand side economics rather than trying to build up capacities for cost reasons, he said.


In words of V Srikant, chief executive officer of Fractal Analytics, the use of technology will be key.


“You think of plumbing, cable internet and telephone lines when planning a city. One needs to think of data and analytics infrastructure that support a smart city. Whether it is eco-friendly sustainable buildings that conserve energy or traffic management systems that dynamically route traffic using data in real time or law enforcement organisations that predict and prevent crimes – you need a strong data backbone enabled by information collection from sensors and intelligent devices to enable a smart city,” he said. Good point.


Smart cities, by definition, need investments to be made in human and social capital and transport and communication infrastructure for sustainable economic development. Just management of natural resources is paramount – otherwise the cities would not be smart.


Many states are bracing up for the coming concept. Bengal is hoping to have two smart cities in south Bengal and one in the north – Raghunathpur, Sagar and Jaigaon. In the later phases, the Bengal government has plans to develop 10 such cities across the state into smart cities. It has started working on this and a planning survey is to be held shortly. Likewise, Kerala, Telangana, Andhra Pradesh and others too are hopeful of cashing in on the smart cities concept.


To be sure, it is not a new concept. They have been around, at least for about five years. Technology organisations have launched initiatives in this direction. Reports citing a Frost & Sullivan estimate point at the combined market potential of $1.5 trillion globally for the smart city market in segments of energy, transportation, healthcare, building, infrastructure and governance.


To encourage development of smart cities, the government has reduced the requirement of the built up area and capital conditions for FDI from 50,000 sqm to 20,000 sqm and from $10 million to $5 million, respectively, with a three-year post completion lock in.


According to Aslam, principal architect, Aslam Architects and Interior Designers, no fertile land should be used for a smart city, even it is close to a port, rail link or others. There should be a segregation of lung spaces, industrial, manufacturing, administration, common areas and service wings in the city.


“Smart city is about encompassing all. The existing cities should also be kept in focus, ensuring delivery of governance and services to ensure usage of resources on an equitable basis,” he said.


A smart city could take up about 7,000 acres and may need an investment of up to Rs 40,000 crore over a 10 to 15 year period. The focus should be on vertical growth and the location of the smart city should be closest to a port, airport or a rail link.


On the other hand, the role of state governments will be substantial as land and its development is a state subject. State governments should be open to enabling private sector participation. Funds apart, overhauling the urban infrastructure will be a key challenge, points out Aslam.


Recently, the Telangana state industrial infrastructure corporation (TSIIC) in technical cooperation with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) has launched a five-point campaign towards smart cities.


The campaign is aimed at retrofitting existing buildings into green buildings, creating barrier free workspaces and zero-waste buildings. It also stresses on solid waste management, including e-waste management in industrial parks. The government is also working to promote the ‘cycle to work’ concept, increasing the green cover in industrial parks, storm-water management and rainwater harvesting.


About 400 people are already using cycle to reach IT offices. The idea is to build cycling tracks for about 60 km, with TSIIC doing 30 and civic body GHMC doing another 30 km. Two bike stations that rent out bicycles are operational and 50 such bike stations with 10,000 cycles are on the anvil. It already appears to be catching on.


Energy audit of about 500 IT buildings in Hyderabad would be taken up together with the CII-GBC. Changes in electrical appliances, glazing and others could result in about 20 to 30 per cent saving in energy and water usage. The green cover in the industrial parks was 18 per cent and could be increased to 30 per cent by promoting roof top gardens. That, then, would be your ideal smart city.