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21 Jun 2018 Updated 29 Apr 2019

India

Knocking on India's Smart Cities door

Timothy Sun, Regional Director, Chennai, India

Knocking on India's Smart Cities door

In urban development circles, "Smart Cities" continues to be a constant buzzword. Today’s technological advancements are bringing us closer and closer to Isaac Asimov's wonder cities.

And Singapore is often mentioned in the same breath – the metropolis that Singapore is today is the result of the combined experience of Singapore companies and agencies alike. Together, they have developed strong expertise in the areas of transport, utilities and renewable energy, information and communication technologies (ICT), urban design and development, and e-governance, among others. Our own Smart Nation initiative is an endeavour to integrate these capabilities to be greater than the sum of its parts.

Similarly, India has a Smart City vision of its own. Not just for one city, but 99 of them. Borne of the election manifesto of Prime Minister Narendra Modi, the Smart Cities Mission is an Indian urban renewal initiative that was launched on June 25 2015. The Mission aims to modernise existing Indian cities and their satellite towns, as urban centers continue to contribute to an increasing proportion of GDP and accommodate demographic movement from rural to urban areas.

India invites the world to help answer the needs of its Smart Cities Mission, and Singapore companies are well placed to participate in the country's Smart Cities development story. With S$40.4 billion worth of projects planned in the 99 Indian cities thus far, this is an attractive opportunity for Singapore companies to pursue.

The truth of the India Smart Cities Mission is that it is but an additional layer on top of India's longstanding drive to improve its urban infrastructure. "Smart" elements have an aspirational effect, but the core of the Mission remains improving the key infrastructure within cities.

Each Smart City proposal includes a vision of what they hope to become. It also includes downstream project lists, describing projects that focus on the core tenets of a city, such as transport, utilities, urban development, e-governance - taken together under the umbrella of ICT.

Through my interactions with many Smart Cities key stakeholders (which include commissioners of municipal corporations, special purpose vehicle (SPV) CEOs etc), I have also observed a fair number of them possess a pragmatic nature towards the implementation of the Mission. Bureaucrats I have met share an earnest conviction in seeking solutions to their cities' problems, and not merely the latest shiny technology on a piecemeal basis. For example, the city of Pune has not sought to implement autonomous vehicles in their proposal, but rather to improve their Bus Rapid Transit (BRT) systems.

No money no honey?


India seeks private participation in the Smart Cities Mission also because the allocated S$200 million (from central and state sources) per city will clearly be insufficient. Public-private partnerships, concession agreements and utility purchase contracts are meant to supplement the shortfall. Other indirect financing methods to be considered are increased collection efficiency, municipal debt raising, institutional borrowing and increased real estate monetisation.

It should also be noted that the Smart Cities Mission does not function in isolation. Cities can choose to tap funding from other pan-India initiatives such as the Atal Mission for Rejuvenation and Urban Transformation or AMRUT in short (for physical infrastructure), Swachh Bharat (clean technologies) and Digital India (connectivity) to supplement their Smart City goals.

Transparency, predictability and scalability


The Smart Cities proposals from each city are a good place for Singapore companies to start exploring business opportunities. Each proposal contains important information, such as city profile, implementation plan or project list, as well as financing budget.

Since the start of the Smart Cities Mission, the government of India has also taken the effort to be transparent in providing structure - working hard to provide key development guidelines, checks and balances, funding structures and administrative structures – to secure funding from the Central Government, each city has to submit their City Score Cards every quarterly.

The transparency of the Mission also offers the opportunity to scale, build track record, and replicate similar solutions within the 99 smart cities.

Singapore companies that Enterprise Singapore has engaged are happy with the level of detail and thought that has emerged from the Smart Cities Mission. It allows for a focused calibration of their business proposals to meet the specific needs of each city.

It is important that Singapore companies bear in mind the nuancing behind their proposals; they should genuinely seek to resolve a city's issues. Singapore companies can also consider offering proof-of-concept to the municipal corporations to do a pilot test and prove the suitability of their proposed solutions. Subsequently, these can be scaled up to a viable project. For example, a company can conduct a trial with energy-saving LED streetlight networks in a small vicinity before rolling them out on a pan-city basis.

Engaging in India, or in any emerging market for that matter, usually involves working with a strong local partner in the market. In my experience, the most successful Singapore companies in India have devoted the time and resources to cultivate the right counterparties to work with on the ground.

Project-based or loose consortiums is also a route to consider to increase Singapore companies' value proposition in pursuit of opportunities. Master systems integrators such as HP, Infosys, Tata Consultancy Services, Larson & Toubro, Siemens, have strong operating history in India and could be possible partners for Singapore companies.

Where to begin?


Interest from Singapore companies in the Smart Cities Mission is growing. More than 40 companies have engaged with and through Enterprise Singapore via overseas business missions and sharing sessions, where you may find possible partners as well.

To help narrow down the geographic selection of where to begin, I have found that the cities of Jaipur, Pune and Chennai align quite well with Singapore's capabilities and interests. They have shown themselves to have responsive and capable state or municipal corporations, possess existing urban and industrial bases to support growth as well as a base of Singapore companies operating within the cities.

Aside from the oft-heard view that India is a complex business environment to navigate, with convoluted tax systems and long gestation periods, there are a few possible challenges that Singapore companies should be aware of.

Smart City solutions have a social impact. In the pursuit of efficiency, some stakeholders will be left redundant. It is important to not only consider the stakeholders that approve a Smart City solution, but also the stakeholders (perhaps unskilled labour) for which your solution disrupts status quo. Several companies have used Corporate Social Responsibility (CSR) to tackle this challenge - building schools and training centres or retraining the displaced to even implement the solution.

Smart City solutions also need to be understood and utilised by the majority of a city's inhabitants. Therefore, as companies pursue Smart Cities opportunities, also consider educating the public as part of your business proposal.

Smart Cities in India – a very real possibility


At the end of the day, companies shouldn’t misconstrue India’s smart cities mission as a shiny new object. At its very heart, a smart city remains very much a mentality– a city aspiring to improve itself, with the ultimate aim of making its inhabitants' lives better, step by step.

Let's not forget that the smart cities of today (London, Singapore, New York) were built layer upon layer, year after year. And with the benefit of the world's hindsight, the team behind India's Smart Cities Mission has every chance to succeed.


About the author

Timothy Sun, Regional Director, Chennai, India

Timothy Sun has lived and worked in Chennai, India, since 2015. Timothy’s work uncovers opportunities in Southern India, which include the States of Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana. He is also actively involved in various Pan-India initiatives such as Smart Cities, Wholesale Trade, Logistics and Innovation. He also believes that Indian mangoes make the hot Indian summers worth the while.


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