JNNURM ver­sus the Smart Cities Mis­sion

HT Estates - - HTESTATES - Van­dana Ram­nani

Four gov­ern­ment schemes on in­fras­truct ure pro­vi­sion­ing i n ur­ban ar­eas – Jawa­har­lal Nehru Na­tional Ur­ban Re­newal Mis­sion (JNNURM), In­te­grated de­vel­op­ment of s m a l l a n d m e d i u m t own s (IDSMT), Ur­ban in­fra­struc­ture De­vel­op­ment Scheme for Small & Medium Towns (UIDSSMT) and Ac­cel­er­ated Ur­ban Wa­ter Sup­ply Pro­gramme (AUWSP) have all fo­cused on cre­ation of cap­i­tal as­sets.

T h e y h ave es­sen­tially fo­cused on re­plac­ing di­lap­i­dated as­sets or where de­mand had out­grown ca­pac­ity, or cre­at­ing new as­sets where none ex­isted – pay­ing lit­tle or no re­gard to how the cities work on an over­all ba­sis.

Smart cities change this par­a­digm to a sig­nif­i­cant ex­tent – the Smart Cities mis­sion will look at how cities (are sup­posed to) work, and al­lows for adapt­ing in­fra­struc­ture (hard as­sets) us­ing an ap­pro­pri­ate mix of in­for­ma­tion and tech­nolo­gies.

As on date, about 33 cities have been se­lected to re­ceive ben­e­fits under the Smart Cities Mis­sion. While 20 were se­lected through a com­pe­ti­tion, an­other 13 were re­cently added through a fast track process. The scheme en­cour­ages cities to carry out com­pre­hen­sive de­vel­op­ment with a choice of retrofitting, re­de­vel­op­ing or de­vel­op­ing a pre­vi­ously un­de­vel­oped part of the city (green­field).

Un­like the JNNURM, the Smart Cities Mis­sion talks of cities tak­ing up one area de­vel­op­ment pro­ject and one pan city pro­ject. The im­ple­men­ta­tion of the scheme will be routed through a spe­cial pur­pose ve­hi­cle (SPV) that will have con­trol over the use of funds and be ac­count­able for how the pro­ject is be­ing ex­e­cuted. An SPV will work as a master developer, en­ter into ar­range­ments with other de­vel­op­ers to de­velop the site for re­de­vel­op­ment, new de­vel­op­ment or retrofitting and there­after exit the pro­ject after hav­ing earned a req­ui­site div­i­dend.

The biggest la­cu­nae of the JNNURM scheme was that it was not im­ple­mented right and some projects did not even get pub­lic sup­port. In many cities funds were used to pay salaries to em­ploy­ees for which there was no ac­count­abil­ity, says Amit Bhatt, strat­egy head, ur­ban trans­port, EM­BARQ In­dia.

Also, while t he cre­ation of SPVs will en­sure greater ac­count­abil­ity of funds and con­trol by the Cen­tral gov­ern­ment, the biggest chal­lenge will be faced by cities that have mul­ti­ple au­thor­i­ties, say ex­perts.

In Ahmed­abad for in­stance, the mu­nic­i­pal cor­po­ra­tion is the biggest and the only en­tity that looks after wa­ter, sewage, trans­port. The head of the mu­nic­i­pal­ity or the mu­nic­i­pal com­mis­sioner is the se­nior most IAS of­fi­cer and re­ports di­rectly to the chief min­is­ter. It is also the first city to float mu­nic­i­pal bonds and raise money for projects.

An­other chal­lenge will be to repli­cate this mi­cro pro­ject (are de­vel­op­ment pro­ject) at the macro (city) level, says Bhatt.

Su­nil Agar­wal, managing director, Black Olive Realty Ven­tures LLP, says that an SPV will at­tract funds de­pend­ing on the per­for­mance of cities. Cit­ing the ex­am­ple of Den­ver Ur­ban Re­newal Author­ity (DURA), he says that the county of Den­ver floated an SPV when it shut down its air­port. The land was used to re­de­velop res­i­den­tial and com­mer­cial. The SPV that DURA cre­ated was dif­fer­ent be­cause it had the abil­ity to is­sue bonds in the cap­i­tal mar­kets.



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