Smart cities need institutional reforms for pvt participation

WEF-PwC report identifies areas such as land acquisition, dispute resolution, permits, information availability and procurement processes that must be addressed to propel India's global standing

Private sector participation is possible in India’s urban development only with definite reforms at various levels, says a study.

While India’s business environment ranking has improved, much more needs to be done to step up private participation in urban projects, according to a World Economic Forum—PwC report.

Read more from our special coverage on "SMART CITY"

• Madhya Pradesh, Rajasthan set up SPVs for smart cities
• First phase of Keralas smart city project inaugurated

It has identified areas such as land acquisition, dispute resolution, permits, information availability and procurement processes that must be addressed “to propel India’s global standing’’.

The report focuses on the government’s ‘100 Smart Cities’ project, and talks of steps that must be taken after the initial shortlisting of the first 20 cities.

Alice Charles, community lead at WEF, said: “While cities in India plan to embed technology in the delivery of urban infrastructure and services, they should also plan to bridge the demand-supply gap in the provision of core urban services such as water, waste management and sanitation.’’

An approach where equal importance is given to infrastructure, technology and governance is required to improve the quality of life in urban India, she said.

As state and local governments, and newly constituted special-purpose vehicles will need to drive the reforms agenda, collaboration among multiple administrative entities is key to success of the smart city project, the report underlines.

The Union Cabinet had last year cleared an investment of Rs 50,000 crore WEF-PwC for the project over five years. States, with municipal bodies, have to invest a similar amount. As the smart city cost is likely to far exceed the sanctioned amount of funds, private sector participation is necessary for the project to take off in a meaningful way.

The report has recommended institutional reforms, business-environment reforms and sector-specific reforms for the project. Under institutional ones, it talks of a unified command structure across multiple planning and administrative bodies within a city, and devolution of power to local government to determine and collect user charges and taxes, to make local bodies financially independent.

For business-environment reforms, it has laid out a road map for formulating public-private partnerships in projects. It elaborates on how cities elsewhere have adopted measures that reduce risk in such partnerships.

Under sector-specific reforms, it has recommended setting up of independent regulators and empowering them where they already exist, among other steps.

India, it says, needs to develop world-class cities to compete at a global scale. The global urban population has risen to 54 per cent of the total and will rise to over 66 per cent by 2050, and India is a significant contributor, the report highlights. ‘’While the country’s urban population currently totals around 410 million people (32 per cent of the total), it is expected to reach 814 million (50 per cent) by 2050.’’

The goal now should be to plug the demand-supply gap in urban regions.