At 13, UP set to get lion's share of smart cities

Of the 100 proposed smart cities across states and Union territories, 20 would be selected this financial year, it is learnt. The rest would join the club in two batches of 40 each in the next two years, said a source in the government.

Once the entire smart-city plan is rolled out across the country, Uttar Pradesh will account for the most (13), followed by Tamil Nadu (12), Maharashtra (10), Madhya Pradesh (seven), and Gujarat and Karnataka (six each). Though the timeline hadn't been defined, the entire exercise of making 100 cities 'smart' could take a decade or more, said an expert.

Among those that could be part of the 100 smart city list are Lucknow, Allahabad and Varanasi in UP; Chennai, Coimbatore and Madurai in Tamil Nadu; Ahmedabad, Gandhi Nagar, Surat and Rajkot in Gujarat; Amritsar, Ludhiana and Jalandhar in Punjab; Gurgaon and Faridabad in Haryana; Shimla in Himachal Pradesh; and Haridwar and Roorkee in Uttarakhand.

While the Union Cabinet had cleared central funding of Rs 100 crore per city, per year through a period of five years in April, Prime Minister Narendra Modi is scheduled to announce the finer details of the plan on Thursday. He will also provide the details of the Atal Mission for Rejuvenation and Urban Transformation (AMRUT). A combined funding of Rs 1 lakh crore was cleared for 100 smart cities, as well as for the rejuvenation of 500 others.

Selection of potential smart-city candidates will be based on a two-stage competition called 'city challenge'. While states will first compete to name their cities, the second stage will be about cities making the cut. The evaluation of cities and towns will be based on criteria framed by the Ministry of Urban Development, in consultation with states. The Centre has mandated every state be made a part of the smart-city universe.

The urban population, as well as the number of statutory cities/towns in each state, will guide the selection process. Many other factors, including readiness to become 'smart' and the availability of good mass transport, will also play a role. While the top 20 cities would be chosen for funding this financial year, the rest would be given time to make up for the deficiencies identified, before participating in the next round, a government official said.

Experts pointed out the central funding of Rs 500 crore wasn't sufficient for a smart city. They added ultimately, states and local urban bodies, along with private entities, had to see the project through. The 100 smart cities project was formally announced in the Union Budget in July 2014, with an allocation of Rs 7,016 crore.

After the Cabinet nod on April 29, Gulam Zia, executive director of Knight Frank India, had said the "scope of improvement under the Smart City Mission is ambitiously widespread to include water supply, sanitation, waste management, transportation, housing for poor and power supply, among others". While cities such as Varanasi, Visakhapatnam and Ajmer could benefit from the smart city project, for a city such as Mumbai, where transportation projects such as the Trans Harbour Link or the metro phase-III could cost more than Rs 10,000 crore each, the proposed amount of Rs 500 crore might not suffice for even a fraction of the interest cost of these projects, Zia had said.

Koichiro Koide, India managing director at Japanese conglomerate NEC (formerly Nippon Electric Company) had recently told Business Standard the biggest challenge for the smart-city project was the need for huge investment.

If one has to work on the basic infrastructure, the cost of project goes up at least 10 times, analysts say. That's the gap that has to be plugged by states, urban bodies and companies. But companies would look for return on investment and, therefore, might not come forward if their assessment showed the business wouldn't be rewarding enough, an analyst said.