From funding to tech support: Foreign partners to play key role
The Indian Express, By: ENS Economic Bureau | New Delhi | December 9, 2017
As the government prepares to announce names of the next set of 10 cities for funding under the Smart Cities Mission by January-end, the initiative has received a fresh boost with Germany entering into an agreement to partner in developing an integrated sustainable transport system for three cities — Bhubaneswar, Coimbatore and Kochi. On Friday, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) signed an agreement with the Ministry of Housing and Urban Affairs for the improvement of basic conditions of public transport in the three cities, expected to be completed by mid-2020.
Germany had announced its support for these three Indian ‘smart cities’ in March, 2016 and had already committed and initiated different coordinated actions to develop these urban centres. A statement issued by the German Embassy in India said that Germany participates in the development of the ferry connections in Kochi with 85 million euros. The agreement was signed in the presence of Union Minister of State with Independent Charge for Housing and Urban Affairs Hardeep Singh Puri and German Ambassador Martin Ney. In a statement issued earlier this month, the German Embassy had said that Germany has provided loans amounting to Rs 2,300 crore to the Tamil Nadu Urban Development Fund and these are being used to finance sustainable urban development projects, including projects in Coimbatore.
“Sustainable urban development is a focus of the bilateral cooperation between Germany and India. During the cabinet consultations in May 2017 in the presence of Prime Minister Modi and Chancellor Angela Merkel, both sides agreed to the development of this cooperation with a focus on urban transport system. Between 2017 and 2022, Germany will provide a total of 1 billion euros for urban development measures in India,” said the statement issued on Friday.
It is learnt that the ministry has received proposals from 15 cities for the fifth and final round of the mission. Some of the cities that have sent their proposals include Itanagar (Arunachal Pradesh), Biharsharif (Bihar), Amravati (Maharashtra), Erode and Dindigal (Tamil Nadu), and seven cities from Uttar Pradesh – Moradabad, Meerut, Saharanpur, Bareilly, Rampur, Rae Bareli and Ghaziabad. Silvasa (Dadra and Nagar Haveli), Kavarati (Lakshdweep) and Diu (Daman and Diu) also sent their proposals. Even though the assistance from the Centre for development of these cities will amount to Rs 500 crore, the assistance from various countries comes as a major boost to the government’s initiative as they will not only provide funding but also introduce technological support.
While the country’s urban infrastructure and services sector has been thrown wide open for private investment, the mission has seen interest from several foreign governments and bilateral and multilateral agencies that have shown their eagerness to have a share of the pie.
The countries that have offered to share technical know-how for the mission include France, which has evinced interest in Nagpur and Puducherry, United States, which is interested in Ajmer, Vizag and Allahabad. While Spain’s Barcelona Regional Agency has expressed interest in exchanging technology with Delhi, China, Sweden and Singapore too have expressed interest and volunteered help.
The list of organisations and multilateral agencies that have offered technical assistance include the World Bank, the UK government-owned Department for International Development, Asian Development Bank, German government’s KfW development bank, Japan International Cooperation Agency, the US Trade and Development Agency, United Nations Industrial Development Organisation and United Nations Human Settlements Programme. Some of the international lending agencies have also offered financial assistance through loans.
The union government’s Smart Cities initiative involves efficient provision of infrastructure and services, urban mobility and governance, mainly through use of digital technology. Only 20 per cent of the total funding for the mission is expected to come from central and state governments, with each putting in Rs 48,000 crore. The state and local body’s share of funding is to be generated either through its own resources or through loans from domestic or external sources.
The government has stated that the private sector will be allowed to get returns on investment by levying user charges on people for providing improved services. Further, private sector companies and financial institutions can also be equity partners in the Special Purpose Vehicle formed to create the smart cities, provided the state government and local body are majority stakeholders.
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