smart cities

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For Private circulation only. News collected and compiled by Urban Management Cell (UMC), CCBP,JnNURM, Kerala-IMG Thiruvananthapuram
(A UMC, Kerala Publication)
No 4. April 2015 Monthly News Letter
Special Issue On
SMART CITIES
The Urban News

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Cities around the globe are undertaking ‘smart’ initiatives that result in better
services for citizens, a more attractive city for visitors and businesses, a better place
to work, and greater cost savings. Smart cities are urban settlements that exploit
technology to offer more structured and more hospitable living conditions for
residents.ICT forms the important back bone of the cities and the main tool to
address common problems like sanitation, congestion, waste of energy. The
government plans to build 100 smart cities across India and made an allocation of
Rs 7060 cr in 2014-15 budget. For this the initiatives from the government level
alone is not sufficient: Smart city cannot have only a few hours of water supply a
day, or electricity that goes off for several hours, or streets littered with garbage. A
very important feature of all smart cities is good citizen access to information.
Whether it is regarding city specific data or the measures being taken by municipal
bodies or information relating to various service providers such as transport and
similar information relevant for potential investors has to be conveniently available.
This could be through multiple channels - internet, mobile apps, radio, TV, printing
media, etc. WE, the people of India, shall support the Smart City initiatives of the
Government whole heartedly. The general appearance of the city has to be pleasing
and clean. Using an average figure of 1 million people in each of the 100 smart
cities, the High Power Expert Committee on Investment Estimates in urban
infrastructure has assessed investment requirements for the services covered comes
to Rs.7 lakh crore over 20 years. This translates into an annual requirement of
Rs.35, 000 crore. Though it is the most costly dream, it is a much awaited dream for
every Indian. Each of the Smart cities can also address the issues such as dowry
death, poverty, health, education domestic violence, gender inequality, crime to
women, debt bondage, cyber crimes and environment in addition to infrastructure.
Considering the importance of this concept, this issue of Urban News is meditating
on SMART CITY vision. To achieve the results, it’s important for cities to think
big, but start small. Think big initially with a holistic, citywide evaluation of the
opportunity and the engagement of all the stakeholders. Then, with a vision for the
future of the city, small projects with quick payback can be initiated. The savings
from these projects, along with the positive publicity of citizen engagement, will
provide momentum for future projects. But smart city initiatives do not remain in
the planning stages. Speed is a requirement to implement. By far, the biggest
inhibitor for cities is funding, as officials are challenged to find the appropriate
financial resources for both short- and long-term projects. Tackle it effectively and
ready to meet the internal organizational challenges, such as the lack of cross-
departmental coordination and alignment. In addition, many cities need a
committed champion to lead the effort across departments.
‘The city is not a concrete jungle, it is a human zoo’
Desmond Morris. The Human Zoo
Editorial
UMC
KERALA

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Smart Cities - Emerging Urban Realities
Dr N Vijayakumar
Team Leader, UMC Kerala
Men came to the city to live, but
they stayed there to live the good life. The
Smart City aims at providing ‘maximum
advanced good life’ to its inhabitants.
India’s efforts to create 100 new smart cities
are still in the early stages. One of the first
details to emerge so far is that the 100 cities
will be picked through a competition. One of
the deciding factors will be how much the
cities have done to support the initiatives,
including make in India, which is designed
to turn India into a major manufacturing
hub, and Swacch Bharat , which encourages
cities to clean up. Other factors could
include the quality of their infrastructure, the
level of city services that are citizen-
focused, and overall quality of life. While
some smart cities are being developed now,
other details on the initiative have been
scarce so far. It’s anticipated that some of
the 100 smart cities will be existing cities
that get infrastructure upgrades, while others
will be built from scratch. Smart cities are
those where the quality of governance is
enhanced with the integration of
applications and data centres through the use
of IT and communications. Smart
governance is a process of reform in the way
government works, and shares information
with the public to deliver services.
Government departments will examine
excellence in smart services, and will find
ways to offer efficient services to the public.
Complaints and suggestions cannot be
ignored and must be dealt in a timely and
professional manner. The citizens, residents
and everyone involved are benefited and it is
a win-win situation for everyone. Central
and state governments could implement new
energy laws, compliance structures, training
programmes and offer incentives for
efficiency projects. Thus the smart city
project is meant to create sustainable, livable
tech - cities in a country where the
population is swelling rapidly. India’s
population is forecast to reach 843 million
by 2050 – more than double what it is today.
In the mid 19th century, no country was
predominantly urban. By 1900, England was
in urban category and by 1950; quarter of
the world’s population lived in towns and
cities. By now, 1/2 of the world’s population
is staying in urban centers. The urbanisation
in developed countries is spread over many
centuries, accelerating in the late 19th and
20th century. In developing countries, it is
compressed in the last 30 years -by 1950,
1/5 of the population was living in cities; by
1975, 1/3 of the population was living in
cities and by 2008, it is 1/2 of the
population. As a result of rapid Urbanisation
especially in metropolitan areas, beyond the
cities’ carrying capacity, and putting
tremendous pressure on infrastructure and
services. In an urbanizing world, cities will
determine the economic future of countries.
But cities will also face the challenge of
urbanization of poverty. Globalizing
economies will accentuate increasing
competition between cities. The

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demographic and economic pressures will
heighten concerns of equity, environment,
quality of life and sustainability. Each city is
unique. Therefore both the problems and
solutions should be identified locally.
The Indian Urban Challenge: India has
second largest Urban System in the world.
Indian cities contribute 55-60% of GDP.
However, 1% households without tap water
in premises and several cities have only 2 –
4 hours of supply, around 43% households
without sanitation lines, 23% live in abject
poverty, 40 million people live in slums and
around 30% households live in single room
tenements .This reveals that Urban
Infrastructure in India is severely stressed.
Municipalities and Corporations in
disarray: Demographic shift to urban areas
unlikely to slow down and the cost of
inadequate infrastructure is enormous.
Municipalities and Corporations in India are
constrained by archaic rules and procedures.
They are unable to meet rising demand for
services and are unable to raise resources.
The Reasons for poor services include
population pressure, absence of long term
planning, governance issues, inadequate cost
recovery and precarious financial position of
ULBs, poor operation and maintenance of
population pressure, improper maintenance
of assets, inadequate capacities and adamant
mind-set up against change.
Dimensions of Urban Poverty: Economic
dimension - lack of resources, food security;
Physical dimension - lack of adequate
shelter and places of business: Ecological
dimension- lack of sanitation and water;
Social dimension - lack of education, health
care etc , leading to enhanced vulnerability
of women, children and the old and Political
dimension: lack of choice or voice.
Emerging Urban Realities Smart cities is
the catchphrase as Prime Minister,
Sri Narendra Modi's government lays the
groundwork for his ambitious program
aimed at setting up 100 such urban
settlements nationwide. Sri Modi's vision for
advanced cities that benefit from the latest
technology has finally begun to take shape
with the Ministry of Urban Development
identifying almost all the locations where
they will be built as well as existing cities
that are to be remodelled on these lines.This
done, the ministry has asked the 22 states
where the programme will be implemented
to send detailed project reports so a final
blueprint can be outlined. ‘Smart cities
incorporate some key concepts that almost
any modern city is bound to have – in
Korea, China or Singapore. The smart Cities
must have a design or a blue print. ‘They
usually have house populations of 1 million
or more. While planning the smart city, care
is taken to ensure that all drainage systems,
water, electricity and gas utilities, and waste
management systems are put in place right
at the outset. The master plan clearly
identifies industrial, residential, commercial,
educational, entertainment, and recreation
and shopping areas. All these are designed
in such a way that no residence or place of
work is more than five minutes away from a
mass transport system (bus, metro or train).
Thus, the need for private transport gets
minimized, in turn allowing for a better
environment. Typically, since cities also
promise security and stability, expect lots of
surveillance equipment to be in place right
from the beginning. Also expect Information
and Communications Technology (ICT) to
play a big role in administration. Unlike
sprawling cities of the previous centuries,
modern cities have compact buildings, thus
offering better management of drainage and
utilities. And since, no city can be appealing
without good schools and hospitals, care is
taken to ensure that such social
infrastructure is in place before the factories
and workplaces come up. Once the
workplaces are ready, workers move in with
their families, and the usual hum of a well-

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ordered city begins to remind everyone that
this is a vibrant, livable city. Yet, it must be
remembered that smart cities are not only
about constructing eco-friendly buildings.
They are highly conceptual in nature,
working on ways to make a city which
actually changes the quality of life and even
the day-to-day cost of living there. Good
cities also require good administration. That
is why India decided to build the best of its
cities under the shelter of Article 243-Q of
the Indian constitution which provides for
independent (non-political) administration
of cities identified as ‘industrial cities.’ The
goals of smart cities also include a collective
city vision and action plan aimed at
improving urban governance and
management, local economic development,
and systematic and sustained reductions in
urban poverty.
Smart City Philosophy: In an urbanizing
world, cities will determine the economic
future of countries. But cities will also face
the challenge of urbanization of poverty and
other evils. Globalizing economies will
accentuate competition between cities.
Smart city technologies can have a dramatic
impact on the prosperity of a region. The
demographic and economic pressures will
heighten concerns of equity, environment,
quality of life and sustainability.
Fig: Elements of Smart City
Hence a city must find the best way in
relation to its local circumstances to
promote its economy and compete, give
citizens a sustainable quality of life, give
due share of economy and life to the poor.
Smart city philosophy is that maximum
comfortable and qualitative life by providing
best governance. Its mission is to promote
virtue and happiness. The purpose of
governance is to provide men a general
saturated welfare. The smart city is thus
originating from the imperfections of an
ordinary city. The smart city is a master of
itself; its character is sustainability and
durability. Every individual ought to have
some occupation in the city, the one in
which his natural capacity is best adapted.
The ideal smart city forms a complete unity,
supported by workers, stakeholders,
politicians, businessmen, educationalists,
doctors, lawyers, engineers, students and
persons from all walks of life. It is the
instrument of a new civilization and a moral
culture. It must have definite workable plans
for higher education, health, sanitation,
cleaning, business, religious, family,
environmental pollution, disaster, water
content, energy, governance, welfare,
administrative, implementation, monitoring,
town planning, zoning, road net work, and
service. It is a perfect city embodying the
principles of welfare for all, motivated by
social justice and social accountability. It is
barred from all utopian ideas and extreme
rationalistic features. It is based on insight,
co-operation, freedom and friendship. Smart
cities recognize that while there are common
issues, each city has its own characteristics
and that it is for civic leaders and citizens to
determine their city’s own future. Smart
City supports local assessments and
solutions, and provides ways and means in
which these can be considered from a wider
perspective. And places great emphasis on
the lead being taken by the city itself, with
the urban poor and local business leaders
actively engaged within a wider
Smart
City
Smart
educatio
n
Smart
Energy
Smart IT
communi
cations
Smart
Buildings
Smart
Health
Water,
waste
water and
sanitation
Smart
Environ
ment
Smart
Governa
nce

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participatory process – in short, local
ownership of the process is vital.
Formulating a Smart City Plan
(Conversion of Cities to Smart Cities):
Step 1.City Assessment - Opportunities,
Strengths, Risks, Weakness, Unmet
demand/gap and vision.
Step 2 Future perspectives - Direction of
change and expectation, Economic Vision,
Infrastructure vision, Service Vision.
Step 3 Strategies for development -
Options and strategies, Link with reform
agenda, Criteria for prioritization.
Step 4 City Investment Plan - Estimate
level of investment, financing options.
Measures to increase their effectiveness
and efficiency: The Smart Plans are
preoccupied with the visualization of an end
state picture of the town. A Smart City Plan
should however constitute a program for a
step by step implementation. Not a once for
all exercise. Periodical reviews as the step
by step implementation proceeds will enable
taking stock of the dynamically changing
situation, and making adjustments to suit
changing needs and requirements.
Responsibility areas of a Smart City
Infrastructure, built environment, economic
development, energy, health and human
services, payments, public safety and
security,telecommunications, transportation,
waste management, water and wastewater,
the enablers, citizen engagement, computing
resources, connectivity, data management,
finance and procurement, instrumentation
and control, inter operability, policy and
leadership, security and privacy.
Fortunately, there are thousands of smart
city projects and pilots underway around the
world.
A step by step approach is required: Back
logs of centuries of unplanned development
of the cities cannot be wiped out in a single
plan. A step by step approach is required for
this purpose. This would be easy if short
term objectives are understood as a step
towards the long term goals.
Improving Urban Governance and
Management:
Participatory decision-making and
management: Greater participation by
citizens in local elections, change of ULB
mindset from regulatory to developmental,
micro-planning, social accountability,
effective use of RTI.
Special Economic Zones
Smitha VS
(ACMA, Municipal Finance Specialist, UMC)
SEZs play a key role in rapid
economic development of a country. It plays
a key role in the constitution of Smart Cities.
In order to overcome the shortcomings
experienced on account of the multiplicity of
controls and clearances , absence of world-
class infrastructure, and an unstable fiscal
regime and with a view to attract larger
foreign investments in India, the Special
Economic Zones (SEZs) Policy was
announced in April 1, 2000. The prime
objective was to enhance foreign investment
and provide an internationally competitive
and hassle free environment for exports. The
idea was to promote exports from the
country and realising the need that level

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playing field must be made available to the
domestic enterprises and manufacturers to
be competitive globally.
SEZ is a geographical area with economic
laws that is more liberal than a country's
typical economic laws. It covers a broad
range: Free Trade Zones (FTZ), Export
Processing Zones (India was one of the first
in Asia to recognize the effectiveness of the
Export Processing Zone (EPZ) model in
promoting exports, with Asia's first EPZ set
up in Kandla in 1965.), Free Zones (FZ),
Industrial Estates (IE), Free Ports etc. Goal
is a structure that allows maximum foreign
direct investment by foreign investors. The
Special Economic Zones Act, 2005, was
passed by Parliament in May, 2005 which
received Presidential assent on the 23rd of
June, 2005. This policy intended to make
SEZs an engine for economic growth
supported by quality infrastructure
complemented by an attractive fiscal
package, both at the Centre and the State
level, with the minimum possible
regulations. A geographical area with
economic laws that is more liberal than a
country's typical economic laws. Certain
localities which offer tax and other
incentives to their resident businesses.
Although India’s SEZs are relatively new,
they now form a significant part of its appeal
as both a sourcing and manufacturing
destination.
Historical perspective: 1979-80: China
embarked on SEZ experiment - Shenzhen
built as largest SEZ: 327 sq km - Brazil,
India, Iran, Jordan, Kazakhstan, Pakistan,
Philippines, Poland, Korea, Russia and
Ukraine have replicated the experiment.
Indian SEZs: Objectives: Three Es and
two Is: Increase export, Increase
employment, Increase economic activity,
Increase investment, Increase infrastructure
Setting up a SEZ: Any private/public/joint
sector or state government or its agencies
can set up an SEZ, including a foreign
agency. The developers can apply to the
Indian Board of Approval to establish a SEZ
where one currently doesn’t exist.
Companies, co-operative societies,
individuals and partnership firms are all able
to file an application, and simply need to fill
out the Form-A that is available on the
Department of Commerce’s website. The
information you have to fill out on the form
ranges from basic details, such as the name,
address and personal information of the
applicant, to more specific details of the
proposal, such as the type of land it will be
set up on and its means of financing. The
amount of land that your proposal requires
will determine what type of SEZ it will be.
The different types are: Multi Sector SEZ
(requiring a minimum of 1000 hectares of
land); Sector Specific SEZ (requiring a
minimum of 100 hectares); Free Trade and
Warehousing Zone (FTWZ) (requiring a
minimum of 40 hectares);
IT/ITES/handicrafts/bio-technology/non-
conventional energy/gems and jewellery
SEZ (requiring a minimum of 10
hectares).The proposal will firstly be
considered by the State Governments before
it receives formal backing from the Board of
Approval. The advantages of setting up a
sourcing or manufacturing platform within a
SEZ are numerous and include: Duty free
domestic procurement of goods for the
development and maintenance of your
company; 100% income tax exemption on
export income for first five years, 50% for
five years following; Exemption from
Minimum Alternate Tax, Central Sales Tax,
Service Tax, State Sales Tax, and a number
of other taxes usually levied by local
governments; External commercial
borrowing allowed up to US $500 million a
year without restriction; Permission to
manufacture products directly, as long as the
goods you are producing fall within a sector
which allows 100% Foreign Direct

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Investment (FDI) . In all SEZs the statutory
functions are controlled by the government.
Government also controls the operation and
maintenance function in the seven central
government controlled SEZs. The rest of the
operations and maintenance are privatised.
Business units that set up establishments in
an SEZ would be entitled for a package of
incentives and a simplified operating
environment. Besides, no license is required
for imports, including second hand
machineries. Inter-unit sales are permitted as
per the SEZ policy. A buyer procuring from
another unit pays in foreign exchange.
Role of State governments: State
governments will have a very important role
in the establishment of SEZs. Representative
of the state government, who is a member of
the inter-ministerial committee on private
SEZ, is consulted while considering the
proposal. Before recommending any
proposals to the ministry of commerce and
industry the states must satisfy themselves
that they are in a position to supply basic
inputs like water, electricity, etc. The
performances of the SEZ units are
monitored by a unit approval committee
consisting of development commissioner,
custom and representative of state
government on an annual basis.
(Developer: a person/State Gov approved by GoI to
set up a SEZ. Co-Developer: a person/State Gov
approved by GoI to do infra/authorized operations,
SEZ Unit: a unit approved by Unit App Comm to
engage in manufacturing/services within SEZ, DTA:
domestic tariff area: all of India except SEZ area}
Labour Laws
Normal labour laws are applicable to SEZs,
which are enforced by the respective state
governments. The state governments have
been requested to simplify the
procedures/returns and for introduction of a
single window clearance mechanism by
delegating appropriate powers to
development commissioners of SEZs.
SEZs located in India: There are many
functional SEZs located such as at Santa
Cruz (Maharashtra), Cochin (Kerala),
Kandla and Surat (Gujarat), Indore (Madhya
Pradesh), Chennai (Tamil Nadu),
Visakhapatnam (Andhra Pradesh), Falta
(West Bengal) and Noida (Uttar Pradesh) in
India. In addition there are 18 at Positra
(Gujarat), Navi Mumbai and Kopata
(Maharashtra), Nanguneri (Tamil Nadu),
Kulpi and Salt Lake (West Bengal),
Paradeep and Gopalpur (Orissa), Bhadohi,
Kanpur, Moradabad and Greater Noida
(UP),Vishakhapatnam and Kakinada
(AndhraPradesh), Vallarpadam/Puthuvypeen
(Kerala), Hassan (Karnataka), Jaipur and
Jodhpur ( Rajasthan) etc.
Points of Criticism
(a)Diversion of prime agricultural land,
(b)Massive human displacement, (c)Poor
compensation, (d)Accentuation of regional
imbalances, (e)Real estate projects,
(f)Displacement of agricultural labour.
Transport Planning- Tips
Girish Kumar M
Urban Infrastructure Specialist, UMC Kerala
Transport planning is an important
ingredient to Smart City concept. It is a
scientific approach to assess existing traffic
characteristics & transport pattern of a city
using Urban Transport Planning System
(UTPS) model. It is also used to forecast
traffic and transport pattern for short,
medium and long term for city. Traffic
represents modes of transport moving on the
surface such as car, jeep, bus, scooter,
Tonga (horse-cart), etc including pedestrian.
Public Transport operates on fixed schedule/

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route /fare for public such as bus, rail,
streamer. Intermediate Public Transport
(IPT)/ includes Para transit - auto-rickshaw,
cycle rickshaw, tonga, 6-seater, taxi etc.
Transport Plan Study-steps: Review of
earlier studies / literature, delineate study
area/traffic zone/screen lines etc for carrying
out primary surveys, conduct primary &
secondary surveys (land use, population,
economic & travel pattern), analysis of
survey data, development of transportation
model & its validation, traffic forecast for
horizon years, development of alternatives
scenarios & its evaluation,recommendations.
Study Area: It is a boundary known as
external cordon (EC) to restrict primary &
secondary surveys limit for efficiency &
economy, area within EC is surveyed
intensively, outside EC changes in land use
pattern are less significant.
Traffic Zones: Subdivision of area into
traffic zones – (a)External zones-traffic zone
outside EC(country), (b)Internal zones-for
internal traffic within study area should give
accuracy & to allow reliable information on
trip generation etc.
Transport Planning Study: Identification
of traffic surveys, finalisation of primary
surveys proforma, identification of survey
locations, finalisation of survey duration,
conduct of pilot surveys, carrying out actual
surveys, finalisation of traffic zones,
Homogenous in land use & traffic
characteristics, Conform to natural &
physical barriers, should not be very large,
preferably have geometrical shape for
centroid determination , finalization of
traffic nodes, coding of proforma, punching
of data, analysis of primary & secondary
survey data.
List of Primary Surveys: House-hold
survey, traffic volume count survey,
passenger & goods origin-destination
survey, road network inventory, IPT/PT user
& operator survey.
(Definitions: Origin-the location of where trip start,
Destination-location where trip ends, Cordon-imaginary
line which defines boundary of the study area, Desire line-a
straight line connecting zone centroids-representing travel
between zones, Screen line- a line established to divide the
study area for the purpose of checking the accuracy of
survey)
Stages of Transport Planning - (a)
Inventories-surveys, zoning, (b) Trip
generation (decision to travel), (c) Trip
distribution (choice of destination), (d)
Model split (mode choice), (e) Traffic
assignment (route choice), (f) Plan
preparation & evaluation
Trip Generation: Estimation of number of
trips produced in or attracted to a given zone
- identify parameters for developing model
and development of model
Multiple regression analysis: Y=b0+b1(x1)
+ -----+bk(xk)
(Y=dependent variable trips generated or attracted, X1,
X2= independent variables cause generation of trips b0,
b1=regression coefficients)
Category Analysis: Y=1100+0.095 x1+1.15
x2 Y: no. of trips produced for work purpose
in a zone, X1:no. of workers in zone, X2-no.
of vehicles in zone
Validation of model: sensitivity analysis,-
forecasting of trips for horizon year
Trip Distribution: selection of trip
distribution model
Gravity Model: Tij=GiAjFij/Sum for j-I to n
(AjFij)
(Tij=no. of trips from zone i to zone j;Gi=trips generated in
zone I;Aj=trips attracted to zone j; Fij=Empirical derived
Friction Factor;N=number of traffic zones)
Traffic Assignment: It allocates a given set
of trip interchanges to a specific transport
network or system.
Uses: To estimate volume of traffic on links
for any future year or to simulate present
conditions.
Requires: Complete description of either
proposed or existing transport system &
matrix of inter-zonal trip movements.
Purpose: (a) to assess deficiencies in
existing network by assigning future trips to
the existing network, (b) to evaluate effects
of ltd. improvements (c) to develop
construction priorities by assigning trips,(d)
to test alternative transportation system (e)

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to provide design hour volumes & turning
movements.
Methods: 1.All or nothing assignments, 2.
Diversion curve assignments, 3. Capacity
restraint assignments.
Model Split: Defined as proportionate
division of the total person trips between
different modes of travel - Expressed as
fraction, ratio, % of total trips - Assumptions
are based on measure of competitiveness on
following: Characteristics of journey, person
& transportation system.
Sum up: Basic of transportation planning,
Steps in transport planning process in brief
,Identification of surveys for State Road
Transport (SRT) ,How to conduct surveys
and its analysis, Four stages of transport
planning with its uses- Trip generation,
Trip distribution-Modal Spilt: Traffic
assignment, Relevance of Transport
Planning - Extremely relevant/useful for
STU officials/town planners etc in assessing
existing travel pattern of city commuters and
to forecast traffic demand to prepare
structure/master plan, etc using Scientific
Technique, Transport Planning: application -
A. Comprehensive T&T study,
B. Limited Transportation study, Bus/Rail
improvement study,-traffic demand
forecasting,-routing/scheduling/terminal
improvement - model split (optimum fleet),-
Fare policy-Road improvement or traffic
management/parking schemes-To prepare a
transport plan for a city for horizon years
(short/long term) based on scientific
techniques -To assess bottlenecks in the
existing transport system-To relieve city
traffic congestion & provide better transport
services for public.
Public Private Partnership (PPP)
Dr N Vijaya Kumar and Smitha VS
Public Private Partnership (PPP) Project
means a project based on a contract or
concession agreement, between a
Government or a statutory entity on the one
side and a Private Sector Company on the
other-side, for investing in construction and
maintenance of infrastructure asset and /
or delivering an infrastructure service.
Stage One: Establish policy & legislative
framework, Initiate central PPP policy unit
to guide implementation, Develop deal
structures, Get transactions right & develop
public sector comparator model, Begin to
build marketplace, Apply early lessons from
transport to other sectors.
Stage two: Establish dedicated PPP units in
agencies, Begin developing new hybrid
deliveries models, Leverage new sources of
funds from capital markets, Use PPPs to
drive service innovation, PPP market gains
depth –use is expanded to multiple.
Stage three: Refine new innovative models,
More creative, flexible approaches applied
to roles of public & private sector, Use of
more sophisticated risk models, Greater
focus on total lifecycle of project,
Sophisticated infrastructure market with
pensions funds & private equity funds,
Underutilized assets leveraged into financial
assets, Organizational & skill set changes in
government implemented to support greater
role of PPPs.
Requirements and Expectations:
PPPs can follow a variety of structures and
contractual formats. However, all PPPs
incorporate three key characteristics (a) a
contractual agreement defining the roles and
responsibilities of the parties (b) sensible
risk-sharing among the public and the
private sector partners, and (c)
financial rewards to the private party
commensurate with the achievement of pre-
specified outputs.

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Stakeholders’ Interests in PPPs
Key Benefit of Public/Private
Partnership: Global Experience shows that
the most cost effective provision of good
quality bus services is achieved from a
public private partnership where: (a)the
public sector retains responsibility for
planning, management and regulation of
public service provision, (b) the private
sector takes responsibility for public service
supply.
Public Sector Responsibility:
Political commitment to the project,
adequate project development – for
Bankable Projects, provide information
required to take informed decision, reduce
risks and uncertainty, level of project
development depends on the intrinsic
strength and viability of the project,
environmental, social, financial, legal
aspects, risk identification and mitigation,
Administrative framework and readiness,
State Support - through land acquisition,
grant, regulatory approvals, Establishing the
policy, setting the legal and regulatory
framework, tendering the contract,
managing the contract, recognition to
partner, provision for re-evaluation after
certain period of time, well defined exit
routes and effect of termination.But above
all - a Fourth ‘P’ - People – is most critical
for PPP success - Government must ensure
the commercial viability, structure the
project to include and ‘ensure’ all possible
revenue streams, VGF ,explore annuity
based options in social infrastructure
projects - Private Must see the “Welfare”
mandate of the Government - Continue
working despite the dispute – Just like
family.
True Essence of Partnership – Value the
Project as equivalent to “Family”, Spouses
are Partners Children are the Users.
Project Development and BPM: Project
Development / structuring the project,
identification of viable projects, viability
study – cost, revenue streams and IRR,
identification of risks.
Risk Mitigation – Risk allocation matrix,
deciding on form of PPP, project
development fund, funding the study of
feasibility, bid process management,
preparing concession agreement.
PPP projects should: provide equivalent or
better value for money than a pure public
Government
-Maximize Revenue
-Provide universal access to
service
-Ensure affordable basic
service
-Promote fair competition
Consumers
Employees
-Ensure fair pricing
-Improve quality and
reliability of service
-Increase accountability and
responsiveness
-Ensure fair treatment of
present employees
-Provide career
opportunities
-Improve productivity,
efficiency, and morale
Stakeholder
Interests
-Ensure stable, transparent
regulatory process
-Enable organizational
restructuring and asset
allocations that favor efficient
operations
Investors

12
sector project, develop base data to be used
for measurement, develop incremental
benefits (“good investment”) may accrue
from: speedier Implementation (fiscal
constraints), total long-term costs (life costs)
of the operation, better service (cost &
efficiency) and coverage.
Risks: (a) Business Risk – cost overrun,
operating risks, revenue risks, financial risk
– debt service coverage, exchange rate (b)
Political Risk – cost rate regulation,
expropriation (renationalize, impose sever
taxes/regulations) (c)Other Risks
:technology and environmental.
Proper Allocation of Risks:
Risks Generally allocated to Public – site
risk, inflation risk, variations or changes in
service specifications risk, network Risk,
voluntary termination risk, compensation on
termination, Private Sector Insolvency.
Risks Generally allocated to Private –
design and construction risk / completion
risk, technology risk, latent defect risk,
operation and maintenance risk,
demand/patronage risk, default risk. Risks
Generally shared by both – change in law
risk, – uninsurable Benefits – refinancing
Scrutinizing the legal details in a PPP
Agreement: change of scope, change in
Law, public grievances, price indexation,
damages for delay, dispute redressal,
political commitment to the project
,administrative framework and readiness,
State Support - through land acquisition,
grant, regulatory approvals, recognition to
partner, well defined exit routes and effect
of termination.
GoI JnNURM and UIDSSMT have
provisions of funding the project
development - Project Development Funds
in States like Gujarat, Karnataka, Punjab,
Rajasthan, Tamil Nadu, Andhra Pradesh,
and Uttar Pradesh - Urban Development
Fund in Kerala - MUIF – Maharashtra
Urban Infrastructure Fund - Proposed
Project Development Fund for PPP Projects
in Maharashtra
Government’s Initiatives for supporting
PPP in Infrastructure Development:While
encouraging PPPs, five constraints have
been identified : (a)Weakness in enabling
policy and regulatory framework in most of
the infrastructure sectors continues to be a
constraint (b)The market presently does not
have adequate instruments and capacity to
meet the long-term equity and debt
financing needed by infrastructure projects
(c) Lack of capacity in public institutions
and officials to manage the PPP process(d)
Lack of shelf of credible, bankable
infrastructure projects, which could be
offered for financing to the private sector (e)
Lack of capacity in the private sector to fully
meet the challenge of investing in a very
large number of projects (f) Weakness in
enabling policy and regulatory framework.
Centre and States are formulating PPP
Policies and regulatory frameworks.
Progressively more sectors have been
opened to private and foreign investment -
Levy of user charges is being promoted,
Regulatory institutions are being set up and
strengthened, Fiscal incentives are given to
infrastructure projects, Standardised
contractual documents including the Model
Concession Agreement are being notified .
Approval mechanism for PPPs in the Central
sector has been streamlined through setting
up of PPP Appraisal Committee (PPPAC) -
Permitting FDI up to 100% on the automatic
route in several infrastructure sectors-
Adequate instruments and capacity to meet
the long-term equity and debt financing,
Setting up of India Infrastructure Finance

13
Company , Launching of a new Scheme to
meet Viability Gap Funding (VGF) of PPP
projects- Setting up of infrastructure funds
are also being encouraged - Multilateral
agencies such as ADB have been permitted
to raise Rupee bonds and carry out currency
swaps to provide long term debt to PPP
projects - Merchant Bankers and multilateral
agencies are also being encouraged to
provide credit enhancement services for
raising cheaper money from market,
External Commercial Borrowings(ECB)
norms have been eased and the overall limit
have been raised. Indian Financial
Institutions are also being encouraged to
develop an appetite for financing
instruments such as take-out finance.
Lack of capacity in public institutions and
officials
State Governments are being provided with
technical assistance in the form of in-house
PPP and MIS experts from ADB to manage
the process for project development. This
assistance would include provision of a
panel of select law firms to provide legal
support: Various Capacity Building
programs are being organized by DEA, GoI
, Preparation of a manual on PPPs to guide
the users and undertake training
programmes for public officials; A panel of
Transaction Advisers has also been
shortlisted. Some States like Maharashtra,
Madhya Pradesh, Karnataka have formed
their own panel of Transaction Advisors, in
addition to GoI panel.
Financing: Identifying activities, Capital
Costs – Bonds, tax exemptions, grants,
Revenue Resources, User Charges,
Dedicated taxes – fuel surcharge
(Government of Kerala has recently
introduced this surcharge for constructing
houses for the houseless),Value Capture –
Impact Tax, Advertisement Rights, Other
Project Development Rights associated with
the project, Viability Gap Funding.
Lack of shelf of Projects:
For providing financial support for quality
project development activities to the States
and the Central Ministries a corpus fund
titled 'India Infrastructure Project
Development Fund' (IIPDF), with initial
contribution of Rs. 100 crore has been set
up. GoK introduced Urban 20-20 to
develop a shelf of Projects. This scheme is
meant to give professional and financial
support to the Urban Local bodies in Kerala
for preparing quality project reports for
addressing urban infrastructure gaps. UMC
Kerala has compiled about 105 projects
from the Municipalities and Corporations of
Kerala, which is conceived and prepared by
various consultants.
Smart City -Tips
Technologies can have a dramatic impact on
the prosperity of a region. That urbanization
places tremendous strain on city resources,
forcing them to abandon their inefficient
management silos for collaboration driven
by real-time data.
Characteristics of Smart Cities
Smart Governance: Smart Cities will begin
with Smart Governance.

14
Smart governance is a process of reform in
the way government works, and shares
information with the public to deliver
services. This brings government by using
technology such as e-services, social media,
applications and other platforms.
Complaints and suggestions cannot be
ignored and must be dealt in a timely and
professional manner. It is a win-win
situation for everyone. City mayors /
municipal commissioners or city
development authorities will play a pivotal
role in implementing of reforms in the smart
cities.
Smart Energy: Innovation in Smart Energy
to accelerate Smart Cities
India operates the 3rd largest transmission
and distribution electricity network in the
world. But there is a number of challenges
including, inadequate access to electricity,
supply shortfalls, huge losses, reliability and
theft. The evolution towards smart grid will
address these issues and transform the
existing network into a more efficient, safe
and reliable grid that would provide
electricity access to all. Implementation of
smart meters will allow utility companies to
collect and analyse data from every meter, to
ensure accurate billing. It is estimated that
India will install 130 million smart meters
by 2021.Central and state governments
could implement new energy laws,
compliance structures, training programmes
and offer incentives for efficiency projects.
Smart Environment: Sustainable smart
urban environment to boost Smart Cities
India's installed electricity generation
capacity at, 250 GW, is the world's fifth-
largest, with power generation from coal,
natural gas, hydro, oil, nuclear, solar, wind,
bio-gas, etc. India is mainly dependent on
coal to produce electricity, which is also the
main source of greenhouse gases, causing
global warming. Therefore, there is a need
to focus on more efficient use of coal or
alternate fuels and renewable energy. The
potential for renewable energy in India is
estimated at 249.18 GW (Source: Novonous
Research), and the installed capacity is
31.69 GW as on 31 July 2014. (Source:
Central Electricity Authority)The Ministry
of New and Renewable Energy (MNRE) has
a target to achieve an installed capacity of
41.40 GW by 2017, which is a US$10.51
billion opportunity.
Water / Waste water / Sanitation:
The demand for clean water continues to
grow for domestic and industrial purposes. It
is estimated that around 38 million Indians
are affected by waterborne diseases
annually. More than 38 billion litres of
sewage is generated in India on a daily
basis, but only 30 per cent is treated. The
untreated sewage discharged into rivers,
ponds or lakes, which are the main source of
municipal water.Sewerage systems
commonly suffer from poor maintenance
and negligence, leading to overflows with
environmental and health concerns.
Municipal authorities are building
community toilets, and are working on
incentives to build additional sanitation
facilities.
To overcome water supply, waste water and
sanitation issues, cities seek to incorporate
the latest technologies, products, solutions,
systems, etc., and efforts are on to collate
data to diagnose problems, and to prioritize
and manage maintenance issues.
Solid Waste: Around 60 million tonnes of
Municipal Solid Waste (MSW) is generated
in India per annum. With rapid urbanization
and changing lifestyle and food habits, the
amount of municipal solid waste has been
increasing. Dumpsites in almost all cities are
handling more waste than capacity, and
finding new landfills near cities is almost
impossible. Most dumpsites lack systems for
leachate collection, landfill gas collection or
monitoring, etc. This result in ground and
surface water contamination from runoff, air
pollution caused by fires, toxic gases, and
odour, and public health problems due to
mosquitoes and other epidemics. There is a
focus on solutions to reduce waste and
environmental pollution, including to

15
generate energy, and to free up land that
would otherwise be used for landfill.
Smart IT and Communications: Smart IT
and Communications is the nerve centre for
Smart Cities-
The governments and residents are starting
to recognize the role of technology in
meeting objectives and to make cities more
efficient. IT and communications
technology will be a key component of the
investments allocated by the Governments
to build smart cities. City administrations
are aware of issues like public safety,
security, prevention of accidents, terrorism,
etc. and to provide swift responses with the
help of technologies to monitor, manage and
detect critical situations. Smart cities will
use IT to improve the quality of life of its
citizens by providing citizen services over
communication networks.
Smart Health: Smart Health is the lifeline
for Smart Cities
The healthcare sector in India is expected to
grow at a CAGR of 15 per cent, to reach
USD 90 billion in 2017 from USD 58.2
billion in 2014. The per capita healthcare
expenditure will increase from USD 57.9 in
2011 to USD 88.7 by 2015.The availability
of only 0.9 hospital beds for every 1,000
patients in India, and only 0.7 physicians per
1,000 people in India. With 360 million
policies, India's life insurance sector is the
largest in the world. Health care providers in
India are expected to spend USD 1.08
billion on IT services and software in 2014,
which has increased by 4 percent from the
previous year India's health budget was
enhanced by 27 percent in FY 2014-15 to
USD 5.86 billion, with special a focus on
improving affordable healthcare for all.
Smart Education: Smart Education
powering citizens for Smart Cities
India is home to roughly 600 million people
under the age of 25 years, twice that of the
U.S. population. India has around 1.4
million schools and more than 35,000 higher
education institutes. Rising incomes, rapid
urbanization, increasing awareness about the
importance of quality education has resulted
in robust growth of this sector. Smart
education will change the way the studies
happen. Students and teachers will migrate
from schoolbooks to e-learning delivered
through computers, tablets and mobile
devices. Schools must adopt these
technologies and upgrade the infrastructure
to allow students and schools to stay
connected with real time information
Smart Buildings: Smart Buildings is the
foundation for Smart Cities
The government of India needs to develop
110 million housing units to achieve the
vision of "housing for all by 2022".
Encouraging private sector participation in
urban affordable housing could help achieve
this vision. More than 2,771 green buildings
projects are registered with the Indian Green
Building Council (as on August 2014) with
a footprint of over 2.23 billion sq ft IGBC)
Buildings in India consume around 40
percent of total energy generated, and 20 per
cent of water (Centre for Science and
Environment)Buildings in India generate 40
percent of the carbon emissions, 30 per cent
of solid waste, and 20 per cent of water
effluents (Centre for Science and
Environment). It is estimated that India can
save around US$ 42 billion every year with
efficient management of lighting, heating,
air-conditioning, etc. (McKinsey &
Company).Smart building technologies
reduce maintenance costs by 10-30 percent,
and enhance occupant's comfort, health and
safety. (Team UMC)
Cities as Smart Cities
GIFT CITY
The Surat Municipal Corporation (SMC)
already announced its partnership with
Microsoft India to transform Surat into a
smart city by introducing several citizen

16
centric services with the help of global
software giant. Surat,,as it claimed, is the
fourth fastest growing city in the world with
a population of 50 lakhs. 80 percent of the
world's diamonds are processed in Surat,
while 40 percent of India's demand for
textiles is met by the city, SMC will work
with Microsoft and its partners to bring
solutions for water management and urban
planning, which include building plan
approvals. In coming months, Microsoft will
help SMC to roll out these services through
its City Next program.It is claimed that
Microsoft's City Next program will make
citizen services more responsive besides
increasing transparency, efficiency and
productivity of departments. Surat has
already implemented several e-
Governance and citizen oriented solutions
developed on Microsoft technologies in the
past. These services include Property tax
payments, birth and death registration,
grievance redressal system, vaccination alert
system, application tracking systems, solid
waste management system, etc. - Team UMC
SMART CITY-KOCHI
This is a 3000-crore IT township project
coming up in Kochi, Kerala. Once the
project is completed, it is expected to
generate 90,000 jobs. This project was
originally proposed in year 2004 during the
tenure of Mr. A. K. Antony as chief
minister. The construction work of Phase 1
was started on 5 October 2011. The first
phase was expected to be completed within
2 years and could generate approximately
3000 jobs.Smart City Kochi is planned as a
vibrant new mixed-use community and
premium knowledge-based Special
Economic Zone (SEZ) that will attract
international investment and attract the best
talent to the state of Kerala. The master plan
creates a campus environment which
exemplifies cutting edge technologies,
sustainable infrastructure, intelligent
building design and support systems to
promote the growth of knowledge-based
industry companies located in India. Ideally
situated with easy access to the Cochin
International Airport, and just 20 kilometres
from the city centre, Smart City Kochi is
well positioned to become an economic
centre for the region and a community of
choice for India. Framed and bisected by the
Kadamprayer and Edachira Thodu rivers,
and containing rolling hillsides and
unobstructed views, the three separate land
areas making up the site present interesting
natural features and amenities that will be
enhanced through the planning and
development of the site.
The Kochi Smart City concept: Clustering
synergistic knowledge-based industries in
accessible and well-serviced building
facilities allows them to share a highly-
educated labour market and operate
efficiently. Granted approval by the
government as a designated Special
Economic Zone (SEZ) township in 2007,
Smart City Kochi will be developed
primarily as a workplace for knowledge-
based companies, yet it will also be a
healthy and thriving contemporary
community with many supporting uses and
amenities for both residents and visitors.

17
Centred on the notion of technological
innovation and sustainability, this will be a
model of progressive workplace
development, representing the highest
international standards, and achieving the
triple bottom line of economic, social and
environmental sustainability. All buildings
will target at minimum LEED Gold
certification. Smart City Kochi is a
development of Smart City, a subsidiary
brand of Dubai Properties based in Dubai.
This site will build on the momentum and
successful models from Dubai Internet City,
Dubai Media City and Dubai Knowledge
Village—it will be linked into a broader
global knowledge transfer and network of
similarly connected knowledge based
communities.
Team UMC
News Tips
PM Narendra Modi reviews progress in Smart City project
Prime Minister Narendra Modi reviewed
the progress on various urban development
programmes including addressing of gaps in
core physical infrastructure across 500 cities
and steps to operationalize the Smart Cities
initiative. Noting that towns and cities are
emerging as key drivers of economic
growth, the Prime Minister emphasized that
the economic growth model of a city should
form an essential part of its Smart City
Vision vision. (PTI Mar 18, 2015)
The Centre will be a facilitator with regard to smart cities
Urban Development Minister M Venkaiah
Naidu said the Cabinet is likely to clear the
government's flagship smart city project
soon and it will be rolled out from next
month. The cities must qualify themselves
by standards, sanitation, revenue,
infrastructure etc.The Centre will be a
facilitator with regard to smart cities and
government will do the hand holding. As far
as housing for all is concerned, Mr Naidu
said the Cabinet has approved it earlier but
there was a need for comprehensive housing
policy for both urban and rural segments.
'Housing for All' scheme targets
construction of houses for all by 2022. (6
April 2015) – Team UMC
Each port will construct one smart city
The government is working on an
ambitious plan to build one smart city each
at the country's 12 major ports (Kandla,
Mumbai, JNPT, Marmugao, New
Managlore, Cochin, Chennai, Ennore, V O
Chidambarnar, Visakhapatnam, Paradip and
Kolkata ), at an estimated total investment of
Rs 50,000 crore, Union Minister for Road
Transport, Highways and Shipping
Mr Nitin Gadkari has said. These will be
green smart cities. Each city will be built
with an expenditure of about Rs 3,000-4,000
crore .These cities will be built as per
international standards and have wide roads,
green energy, advanced townships and
greenery and have e-governance links,
international standard facilities, special
economic zones, ship breaking and ship
building centres . Port water will be
recycled. Port wastes will be turned into bio
gas. Vehicles will run on bio fuel. Solar
energy and wind power will be generated at

18
ports. These cities will be pollution-free and
very green smart cities.- Team UMC
(ET 22 February 2015)
'Digital India'
Government has set December 2015
deadline to cover cities and towns with
population of over 10 Lakhs as well as
tourist destinations with Wi-Fi services as
part of Prime Minister's pet project of
'Digital India'. Top 25 cities have to achieve
this target by June 2015. (7 February 2015) - Team
UMC
India and Spain are set to partner each other in the railways sector, join with Smart City
concept
Spain has the second largest high speed
train network in the world after China.
Spanish Minister of State for Commerce
Jaime Garcia Legaz said.that the 'Smart
Cities' project is one of the key areas of
expertise and Barcelona is one such example
of the 'Smart Cities' project," Union Urban
Development Minister M. Venkaiah Naidu
had visited Barcelona last year to learn
about the Smart Cities project and the
implementation of it by the Spanish
Government in association with various
industrialists. (2 February 2015) - Team UMC
Parameters for 'Smart Cities'
Prime Minister Narendra Modi called for
identifying parameters that could be laid
down for the 'Smart Cities' initiative, adding
that the project should improve the quality
of urban governance, thereby lending greater
strength to the overall governance processes
of the country.
Chairing a high-level meeting on the
initiative in the national capital, Prime
Minister Modi asked the Ministry of Urban
Development to convene a workshop of all
central and state urban development
authorities at the earliest and asked officials
to identify the basics of infrastructure,
quality of life, and citizen-centric services
that would be essential to cities of the 21st
century. (29 December 2014) - Team UMC
Cisco selects its first Smart City
Council Associate Partner (CISCO) has
already selected its first smart city. The
company says Visakhapatanam is the
first that it will work to transform.
Visakhapatnam, which did make the list of
promising cities, is a port city of 1.7
million. In addition to trade, the city's top
industries are agriculture and fishing, and
related businesses. Cisco plans to make the
city much more high-tech. It plans to set up
a skill development center and a business
incubator. It will also improve education and
healthcare through technology.
Another area of focus for Cisco is to help
the city improve its ability to recover from
disasters. The city is typically hit by two
cyclones each year. Team UMC
A Major Banking Investment
Asian Development Bank says it’s
committed to supporting India’s vision of
Smart Cities. It calls 2015 a milestone year
for international development and says it’s

19
firmly behind the country’s smart cities
efforts. One of its priorities is protecting
resources and energy efficiency. It is calling
on Indian city leaders to emphasize low
carbon development and make smarter use
of land and water. Transportation and
improving services for the poor are also
areas of focus. Asian Development Bank
says new technology will help, but cities
also need to do more integrated planning,
make more timely investments in their
infrastructure and make much better use of
their land. Team UMC
The Top 20 Cities
With this mind, analysing factors like
household income, expenditure and
variables related to standard of living,
FIRST Smart Cities Council, along with the
support of premier economic research firm
Indicus Analytics, has put together a list of
the Top 20 Promising Cities, with a
population of over a million and excluding
the metros, in India. FIRST Smart Cities
Council has further explored the
infrastructure opportunities in these already
promising cities. The cities that made in the
list include: Surat (Gujarat), Nagpur
(Maharashtra), Lucknow (Uttar
pradesh),Vadodara (Gujarat), Thane
(Maharashtra), Jaipur (Rajasthan),
Visakhapatnam (Andhra Pradesh), Pimpri
Chinchwad (Maharashtra), Indore (Madhya
Pradesh), Navi Mumbai (Maharashtra),
Kanpur (Uttar Pradesh), Chandigarh
(Chandigarh), Kalyan-Dombivli
(Maharashtra),Faridabad (Haryana),
Gurgaon (Haryana), Ghaziabad (Uttar
Pradesh), Bhopal (Madhya Pradesh), Rajkot
(Gujarat), Ludhiana (Punjab), and Nashik
(Maharashtra) - Team UMC
Make in India
Make in India is an initiative of the GoI, to
encourage companies to manufacture their
products in India. It was launched by PM
Narendra Modi on 25 September 2014. The
major objective behind the initiative is to
focus on 25 sectors of the economy for job
creation and skill enhancement. The
initiative also aims at high quality standards
and minimising the impact on the
environment.

20
Smt. R Girija IAS
The newly appointed
Project Director, KSUDP
and
Nodal Officer, CCBP, Kerala
Responsibility for the views expressed and for the accuracy of statements contained in the contributions rests with the author(s).
Please mail your articles and comments to:umcrpmc@gmail.com
CCBP Kerala has signed the MOU with Institute of Management in Government (IMG) for
conducting around 12, 4 day residential training programs on Financial Management to 360
participants from various ULBs in Kerala. The main objective of the training is to equip all
financial staff with adequate training on municipal financial management, knowledge on
accrual based accounts system, to enable ULBs to bring 85% of properties under Tax record,
to enhance tax collection up to 90% , to mobilize financial resources through municipal bonds
and other market instruments ,to train the ULB staff to prepare monthly accounts, MIS reports
and other statements of accounts and analysis of financial statements etc. The target group of
trainees will be the Finance Standing Committee Chairmen, Municipal Secretaries, Revenue
Officers, Finance Officers/Accountant/ Superintendent , Department Heads, etc of the ULBs
in Kerala . The Urban Management Cell (UMC), Kerala will facilitate the training.
(Team UMC)
CCBP KERALA NEWS
CCBP KERALA NEWS

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