As 20 cities gear up for smart makeover, it is a bonanza for real estate: All you need to know

The government on Thursday released the list of 20 cities that have won the smart city challenge, with Bhubaneshwar getting the first rank.

“Today marks a historic landmark in the annals of urban development in our country as we get to know the first batch of smart cities. This announcement marks a paradigm shift in our approach to urban development in the country,” urban development minister Venkaiah Naidu said at the press conference.

“The idea of smart cities has aroused an unprecedented enthusiasm ever since it was first mooted by Prime Minister Narendra Modi in 2014,” Naidu said at the presser.

“Nobody can stop an idea whose time has come. This applies more to the launch of Smart City Mission in our country,” he said.

“These 20 cities will be the first to receive funds, hence kickstarting the process of developing them into ‘smart cities’. The next two years will see the inclusion of 40 and 38 cities more,” Naidu said at a press conference here.

Here’s are all the key facts you need to know about the pet dream of prime minister Narendra Modi:

What is a smart city?

According to the government, some features of smart cities are promoting mixed land use in area based developments; housing and inclusiveness; creating walkable localities; preserving and developing open spaces; promoting a variety of transport options; making governance citizen-friendly and cost effective; giving an identity to the city; and applying smart solutions to infrastructure and services in area-based development. Naidu on Thursday said the smart city mission will help integrate urban planning by addressing the issue of infrastructure, land use planning, transport, urban design and architecture in a holistic manner.

What is the smart cities challenge?

This is an innovative way devised by the government to choose the ideal candidates to transform into smart city. As part of the stage 1, all state governments were asked to short list potential smart city candidates, from which the government selected 98 cities. These candidates were asked to submit a proposal for which they get assistance from a consultant, approved by panel set up by the urban development ministry. This is the stage 2 of the project. The proposals were evaluated by a panel of experts. Probably aimed at preempting all criticisms, the minister on Thursday time and again made it clear that there is no intervention from his ministry in the shortlisting the candidates.

The selection committee has taken into account various parameters such as city vision and strategy, cost effectiveness, credibility of implementation and innovation. Each parameter was assigned a weight. For example, cost effectiveness was accorded 30 percent weight, civilian participation 16 percent, smartness 10 percent and process followed 4 percent.

“Bottom-up approach has been the key planning principle under Smart City Mission,” Naidu said at the press meet Thursday.

Which are the cities that won the challenge?

The 20 cities that won the challenge are: Bhubaneswar (Odisha), Pune (Maharashtra), Jaipur (Rajasthan), Surat (Gujarat), Kochi (Kerala), Ahmedabad (Gujarat), Jabalpur (Madhya Pradesh), Visakhapatnam (Andhra Pradesh), Sholapur (Maharashtra), Davangere (Karnataka), Indore (Madhya Pradesh), New Delhi Municipal Corporation (NDMC, Delhi), Coimbatore (Tamil Nadu), Kakinada (Andhra Pradesh), Belagavi (Karnataka), Udaipur (Rajasthan), Guwahati (Assam), Chennai (Tamil Nadu), Ludhiana (Punjab), and Bhopal (Madhya Pradesh). In terms of population, these 20 cities account for 3.54 crore people.

What next for the 20 cities?

“These 20 cities will be the first to receive funds, hence kickstarting the process of developing them into ‘smart cities’. The next two years will see the inclusion of 40 and 38 cities more,” Naidu said.

The 20 selected cities should now set up special purpose vehicles and start implementation of their proposals, prepare detailed project reports, float tenders etc. According to the minister, a total investment of Rs 50,802 crore has been proposed in the selected smart cities and towns during the five-year period.

All the cities have proposed public-private partnership (PPP) as a major vehicle of resource mobilisation, said the minister. As many as 10 of the 20 cities have proposed to mobilise Rs 8,521 crore under PPP model while others have also indicated this option. A total area of 26,735 acres has been identified by these cities for making them smart through necessary interventions.

According to Arindam Guha, Senior Director, Deloitte in India, there are no winners or losers here.

“The really smart cities will build on the effort already put into developing the Smart City plans and take some of the implementation forward, especially those which do not require significant financial outlays like increasing walkability by improving pavements or are largely supported by private investment like wi-fi facilities in public spaces, beautification of public places through corporate sponsorships or advertisements. At the end of the day, the largest part of the investment which is in basic infrastructure is funded through programmes like Amrut, Safe Cities etc,” he said in a statement.

Lauding the announcement made on Thursday and the initiative as such, Pratap Padode, Founder & Director, Smart Cities Council India, said the move has proved the commitment of the government to the smart cities mission.

“Funds for the winning cities would be made available by the year end which would mean that the winning cities would be undergoing request for proposals (RFP) discussions and will plan tenders in the third quarter of fiscal 2016-17,” he said.

Who will benefit?

Apart from the 3.54 crore population residing in these cities, it is likely to be a bonanza for the slowdown-hit real estate. According to a report in PTI realtors’ body CREDAI has hailed the move. It sees the initiative would provide great opportunity for the real estate development, particularly in the affordable home segment, with improvement in infrastructure of these towns.

“Its a good initiative by the government. Satellite towns around these smart cities will be good opportunity for the real estate development especially affordable housing,” CREDAI President Getamber Anand has said.

“While this initiative will involve large-scale retrofitting as well as redevelopment; these cities could become showcases of urban infrastructure development, encouraging others to follow suit,” said CBRE South Asia Chairman & MD Anshuman Magazine.

The Smart City initiative would be a game changer in raising the standard of infrastructure in the cities in the country, said Shubhranshu Pani, MD – Infrastructure Services, JLL India, a company which has supported Bhubaneshwar and Chennai in their bid for smart city makeover.

What about the cities those missed out?

The 20 cities have been selected after a “rigorous competition”. Rajasthan had proposed total investment of Rs 6,457 crore over the next five years for developing Ajmer, Jaipur, Kota and Udaipur as Smart Cities, while Maharashtra had proposals worth Rs 29,647.45 crore for 10 cities. Only two cities each from these states have made to the list.

However, for those that did not enter the list this time it is not all lost. The 23 states and Union Territories which could not make cut this time get an opportunity to participate in a ‘fast track competition’. Each top ranking city form these left out states can upgrade their smart city proposals and submit them by 15 April, this year for inclusion in the mission.

With inputs from IANS