Smart Cities Need Holistic Management System

Mr. Saurabh Mehrotra, Directory, Advisory Services, Knight Frank

In an interview with Built Constructions, Mr. Saurabh Mehrotra, Directory, Advisory Services, Knight Frank outlines how India can approach to make smart cities a successful initiative.

What are the opportunities and challenges that urbanisation in India does throw up? How smart cities can bridge the gap?

As per the survey by Knight Frank, 30% of population is living in urban areas. We are going through a rapid urbanization and eventually, half of our country’s population will be living in urban areas soon. On the other side, the increasing density is triggering manifold infrastructure challenges.

The average distance taken by city’s inhabitants between place of work and residence has gone up by 40% over the last decade which has triggered an increase in urban stroll. On the contrary, infrastructure is not catching up with the speed of urban stroll. Hence, we are looking at a scenario of infrastructure not being sufficient.

Our solutions towards such challenges have been more focused capital intensive infrastructure development and very limited has been done on policies and governance model. For example, internationally, traffic as a solution is understood that it cannot be tackled by just infrastructure augmentation. It can be tackled through various policy measures as one of constituents of smart cities.

As a consultant to Delhi Mumbai Industrial Corridor (DMIC) project, we are one of the pioneers of advocating the concept of smart cities. Unfortunately, smart cities are just associated with smart technologies, smart planning or smart accounting systems but, these are mere constituents for a smart city. Instead of looking at smart city as technology solution or a planning solution provider, we should look at holistic management solution. We need an institutional arrangement to be able to manage smart cities through which we can make everybody accountable.

What are of the best practices that India can learn from some of the most developed cities (smart) in the world?

In India, we have thought of infrastructure solutions as highly capital intensive infrastructure projects only. But, solutions could also be policy related. We need not invent wheels as we have successful examples to learn from. We should learn and implement these successful overseas models

Most of the global cities have integrated transport planning into city’s land use planning. For instance, Shanghai, and Beijing introduced restrictions on number of cars that can be registered per month based on the quota linked to road congestion monitoring system. In London, employers are encouraged to draw a employee mobility plan as a move towards reducing congestion. Hongkong has been taking initiatives to control car ownership to match the road infrastructure augmentation. Jhakarta introduced three-in-one scheme which insists on minimum three passengers, while entering key locations in rush hours as an approach towards car pooling. USA introduced high occupancy vehicle control where certain lanes are reserved for high occupancy vehicles. Singapore introduced electronic road pricing system. They are charging cars for use of roads at specific locations during peak hours.  

Unfortunately, we don’t see any such initiatives in our country, instead, we continue to witness threefold increase in car sales that do not match the road augmentation. At this juncture, accountability and revised governance models to decongest cities come into picture. Unless there is governance model and institutional framework which is accountable for delivering certain pre-decided service level parameters that are linked to the quality of the residents of the city, no smart city can function.

Development and management of smart cities concept should be on par with corporate work system. Accountability should center on the citizen’s quality of life. We have been highlighting how countries can measure the quality of life. Bhutan has a good illustration that measures the quality of life of its citizens through ‘Gross Happiness Index’.

Development of smart cities in India will act as a significant catalyst for economic growth initiated through a number of key drivers, including increased FDI inflows, accelerated REITs (Real Estate Investment Trusts) development, increased competitiveness, and job creation. Could you corroborate your insight on this view?

In terms of reach, these (smart cities) are vehicles that influence ease of money flows. Smart Cities are long gestation projects with 10 to 15 years hence; they would require means of long term finance.

Even though we are seeing lot of Private money flow into these projects, there is no unlocking of capitol which is happening today. There is a challenge associated with it as no institutional buyers are picking up these projects in providing exit to the developers so that they can flow back this capital which they unlock out of these projects into fresh initiative. We hope to see a lot more models in the areas of public financing, public bonds to come in. However, these bonds cannot get the support of the market unless they have the confidence of institutional buyers give them the right returns.

In the real estate point of view, we must set guidelines for FSI, density and height for a city. Real estate projects are managed from a regulatory perspective—today real estate project goes through 45 approvals. Smart approval framework is the need of the hour for realty sector.  Through a single window if the approval period is reduced from 12 months to one month, we can bring down the real estate cost by 25 to 30%. 

We already have smart solutions in bits and pieces being implemented across the board--smart water meters, smart electricity meters and traffic management solutions. Smart cities can be developed and governed with a good proportion of policies, discipline, accountability and smart management.