Smart cities may not bring huge funds

Andhra Pradesh is seeking 14 smart cities

Update: 2014-09-20 03:25 GMT
Narendra Modi government is proposing public private partnership (PPP) mode for execution of smart cities project by respective states. (Photo: DC/File)
Hyderabad: The ‘Smart Cities’ will not bring huge Central funds to Andhra Pradesh government. Unlike the JNNURM scheme during Congress regime wherein Central grants were released, Narendra Modi government is proposing public private partnership (PPP) mode for execution of smart cities project by respective states. Andhra Pradesh is seeking 14 smart cities. The Government of India is planning to develop 100 smart cities. 
 
To finance the smart cities, the High Power Expert Committee (HPEC) on Investment Estimates in urban infrastructure has assessed a Per Capita Investment Cost (PCIC) of Rs 43,386 for a 20 year period. 
Their estimates cover water supply, sewerage, sanitation and transportation related infrastructure. Using an average figure of one million people in each of the 100 smart cities, the total estimate of investment requirements for the services covered by HPEC comes to Rs 7 lakh crore over 20 years (with an annual escalation of 10 per cent from 2009-20 to 2014-15). 
 
This translates into an annual requirement of Rs 35,000 crore. It is expected that most of the infrastructure will be taken up either as complete private investment or through PPPs. 
 
The contributions from the GOI and states and urban Local Bodies (/ULBs) will be largely by way of Viability Gap Support (VGF). Highly placed sources in Union urban development ministry told this correspondent that  a large part of the financing for smart cities will have to come from the private sector with the states and cities and Central government only supplementing that effort.
 
 

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