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Smart cities: just real estate

Grand notions, concrete skyscrapers and electronic gadgets have become the hallmark of smart cities and not people who are to live in them

IN 2005, responding to India’s urban challenges, the Government of India (GoI) established the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). Reams can be written about the failure of this Mission, reflecting the pitiable state of urban governance in the country.

But there was one bright spot—an endeavour to democratise Urban Local Governments (ULGs) by implementing the decentralisation measures envisaged in the Constitution (74th Amendment) Act 1992, and to empower them to perform the key tasks assigned under the 12th Schedule (Article 243W): Urban planning and development; land use and construction; economic and social development; roads and bridges; water supply; public health and sanitation conservancy; urban forestry and environment protection; safeguarding interests of weaker and handicapped sections of society; slum improvement and upgradation; urban poverty alleviation; provision of urban amenities; and promotion of cultural, educational and aesthetic aspects.

To make this happen, JNNURM mandated City Development Plans (CDP) and several reforms, including transfer of all special agencies that deliver civic services in urban areas to ULGs. It also mandated a “public disclosure law” to ensure preparation of medium-term fiscal plans of ULGs and release of quarterly performance information to all stakeholders and “community participation law” to institutionalise citizen’s participation in urban governance. Though lots of funds were drained out under JNNURM, most of these democratisation measures did not materialise!

The key to effective and sustainable urbanisation and attracting quality investment is the state of the institutional framework ultimately responsible for it and the system of governance in which these institutions function. This is the Achilles’ heel of urban governance in India and the remedy has to be found only through participatory and democratic institutions, and not otherwise.

An attempt was made in this direction in the Revised Chennai CDP in 2009, which was submitted to the Union Ministry of Urban Development (MoUD) and the Government of Tamil Nadu. The plan, based on indigenous wisdom and some foreign expertise, suggested a democratic blueprint and institutional framework for urban governance in accordance with the 74th Amendment Act (see diagram). I was part of its preparation and there was neither big business nor real estate interest in the Plan. No wonder, it did not see the light of day!

Democratisation of urban governance was at least a fig leaf for UPA governments to pursue an otherwise bureaucratic and fund-and-figure JNNURM. But soon after assuming office in May 2014, the NDA government cast away even this fig leaf in their pursuit of digital-driven rapid urbanisation through ‘smart cities’. Giant corporate entities, who had worked in the background, were ready. Within weeks, CISCO showcased its smart city solutions, using sensors and the internet to solve a range of city problems, from water leaks and air pollution to traffic congestion, vehicle parking and the garbage crisis. Sensors, it said, would be present on every building, lamppost, parking lot, garbage bin and water pipe in the city that would then help in monitoring and controlling them.

Microsoft was not to be left behind. In December 2014, this software giant announced partnership with the Surat Municipal Corporation to transform Surat into a smart city and help the municipal administration in adopting technology infrastructure to meet the changing needs of its citizens. Soon thereafter, in March 2015, Siemens, an engineering multinational company, signed an MoU with the Confederation of Indian Industry (CII) to lead the conceptualisation and implementation of pilot projects in smart cities across India. CII has initiated a  ‘National Mission on Smart Cities’ to act as a key facilitator and thought leader to assist the GoI in the development of 100 smart cities by 2022. The MoU between CII and Siemens forms part of the implementation programme to see the country’s smart city vision realised.

The strategic components of SCM are city improvement (retrofitting),city renewal (redevelopment) and city extension (greenfield development) plus a pancity initiative in which smart solutions are applied, covering larger parts of the city

HAVING sewn up things thus, on June 25, 2015, Prime Minister Modi launched the Smart Cities Mission (SCM). Speaking at the event, he said: “Many people are wondering about what exactly the smart city is. But one does not need to think a lot. Smart city is a city that provides more than what a citizen expects. Before he wants it, we provide it… The decision to make cities smart will be taken not by governments but by the people of the city, the local administration…Private property developers should not decide how a city should grow; it should be decided by residents and city leadership.”

MoUD came out with a compendium outlining the definition, features, strategy, challenges, financing and implementation mechanism for the SCM. Most important among there are strategy and implementation mechanism.

The strategic components of SCM are city improvement (retrofitting), city renewal (redevelopment) and city extension (greenfield development) plus a pan-city initiative in which smart solutions are applied, covering larger parts of the city. Retrofitting will introduce planning in an existing built-up area consisting of more than 500 acres, to achieve smart city objectives, along with other objectives, to make the existing area more efficient and liveable. Since existing structures are largely to remain intact in this model, it is expected that more intensive infrastructure service levels and a large number of smart applications will be packed into the retrofitted smart city.

REDEVELOPMENT will effect a replacement of the existing built-up environment and enable co-creation of a new layout with enhanced infrastructure, using mixed land use and increased density. Redevelopment envisages an area of more than 50 acres, identified by urban local bodies (ULB) in consultation with citizens. For instance, a new layout plan of the identified area will be prepared with mixed land use, higher FSI and high ground coverage. Greenfield development will introduce most of the smart solutions in a previously vacant area (more than 250 acres) using innovative planning, plan financing and plan implementation tools with provision for affordable housing, especially for the poor. Greenfield development is required around cities in order to address the needs of the expanding population.

Pan-city development envisages application of selected smart solutions to the existing city-wide infrastructure. Application of smart solutions will involve the use of technology, information and data to make infrastructure and services better. The smart city proposal of each shortlisted city is expected to encapsulate either a retrofitting or redevelopment or greenfield development model, or a mix thereof and a pan-city feature with smart solution(s). Though couched in ‘service delivery’ jargon, the SCM strategy speaks ‘real estate’ language, and much against the Prime Minister’s proclamation, it is property developers who would decide as to how a city should grow!

However, it is in implementation that democratisation is substantially derailed to be replaced by corporatisation. This is done through fully autonomous special purpose vehicles (SPV) that will plan, appraise, approve, release funds, implement, manage, operate, monitor and evaluate the smart city development projects. Each smart city will have an SPV which will be headed by a full-time CEO. The board of directors will have representatives of the central government, the state government, the ULB and independent directors, in addition to the CEO and functional directors. Additional directors (such as representative of parastatal) may be taken on the board, as considered necessary. The execution of projects would be done through joint ventures, subsidiaries, public-private partnership (PPP), turn-key contracts, and so on, suitably dovetailed with revenue streams.

The SPV will be a limited company incorporated under the Companies Act, 2013, at the city level, in which the state and the ULB will be the promoters, having 50:50 equity share-holding. The private sector or financial institutions could take equity stake in the SPV, provided the shareholding pattern of 50:50 of the state and the ULB is maintained and the state and the ULB together have majority shareholding and control of the SPV. The private sector or financial institutions could also do so, provided the state and the ULB share are equal to each other.

The SPV would appoint project management consultants for designing, developing, managing and implementing area-based projects. SPVs may take assistance from any of the empanelled consulting firms in the list prepared by MoUD and the hand holding agencies. Most consulting firms and all hand-holding agencies—the World Bank, ADB, JICA, USTDA, AFD, KFW, DFID, UN Habitat, UNIDO–are foreign entities wedded to alien concepts, ‘development’ mindset and philosophies.

To ensure operational independence and autonomy of SPVs, the state government and ULBs would delegate to them the rights and obligations of the municipal council with respect to the smart city and approval or decision-making powers of the government departments under various laws and rules.

This is a clear derailing of democracy and ushering in corporatisation. And, if corporatisation comes, can privatisation be far behind? Certainly not, particularly with giant MNCs, top-notch foreign consulting companies and ‘hand-holders’ breathing down the neck of SCM! It is only to be expected that SCM will largely rely on the foreign hand as officials of most of the 88 upcoming smart cities have expressed their wish to work with international consulting firms in the hope of preparing robust development plans to win government funding. The MoUD would be the facilitator.

Except for some scanty meetings and monologues with select gatherings, ‘citizen feedback’ is just an online, faceless exercise. This effectively keeps away the ‘informal economy sector’, comprising poor and low-income groups that constitute over 75 per cent of the urban working population. In a ‘corporatised smart city’, driven by business interests of giant MNCs, there is not much scope for inclusiveness. More so, smart cities are all about commercial commodification—producing, selling and purchasing generic built units (square-foot) adopting industrial batch production approach. This is the hallmark of today’s technology/globalisation-centred urbanisation, which is undemocratic, exclusive and expansionist with money-making as the only motive.

In a ‘corporatised smart city’, driven by business interests of giant MNCs,there is not much scope for inclusiveness. Smart cities are all about commercial commodification—producing, selling and purchasing generic built units

All the hype notwithstanding, there is nothing new about the smart city concept. Arguably, it dates back at least as far as the invention of automated traffic lights, which were first deployed in 1922 in Houston, Texas. But in the last decade, thanks to the rise of ubiquitous internet connectivity and the miniaturisation of electronics, the concept seems to have crystallised into an image of the city as a vast, efficient robot–a vision that originated with giant technology companies such as IBM, CISCO and Software AG, all of whom hoped to profit from big municipal contracts.

Adam Greenfield, author of the book, Against the Smart City (2013), is on the mark when he said: “The notion of the smart city in its full contemporary form appears to have originated within these businesses rather than with any party, group or individual recognised for their contributions to the theory or practice of urban planning.” This is very true of India’s SCM from which professional bodies of urban planners were kept away. In the event, grand notions, concrete skyscrapers and electronic gadgets became the hallmark of smart cities and not people who are to live in them!

THIS is precisely what is happening in Amaravati, the Andhra Pradesh capital. On Vijaya Dashami day, Prime Minister Modi laid the foundation stone for this ultra-mega-super-smart-city on the banks of the Krishna, spreading over 50,000 acres (phase I) of the most fertile farm and forest land. There was no semblance of democracy in the entire process, including site selection and land assembly for the project. Not one law of the land, including obtaining environmental clearance, has been complied with by the state. Conceived, planned and designed in Singapore with no stakeholder consultation, the rajadhani of this primarily agrarian state is being built by destroying prime agricultural land! Singapore firms will be master-developing this massive real estate venture and funds are sought from Japan. Calling it a capital project like Chandigarh is a misnomer.

As structured and promoted, smart city is business power versus people power. With governments lined up on the former’s side, the latter are bound to lose. Leo Hollis, author of Cities Are Good For You—The Genius of the Metropolis (2013), does not mince words when he says, “In the end, the smart city will destroy democracy.” Better heed this before it is too late.

The writer is a former Army and IAS officer. Email: deva1940@gmail.com

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