Elaborating the Concept of SMART City

As  we  gathered  from  earlier  articles,  SMART  City  is  a  Process.   Like  Humans,  there  is  no  finality,  but  rather  it  keeps  on  evolving.   As  populations  around  the  globe  increase,  rapid  urbanization  spreads  too,  and  due  to  which  governments  have  to  accommodate  and  facilitate  these  large  numbers  of  people,  in  an  organized  and  well  planned  manner  with  the  systems,  resources  and  knowledge  available.   Ninety  per cent  (90%)  of  world’s  population  growth  is  expected  to  occur  in  fast  growing,  advancing  and  under  developed  economies. Information  and  Communications  Technologies (ICT)  and  Green  Initiatives  &  Practices (GI&P)  are  the  Core  and  the  lifeline  of  the concept  of  SMART.   Lately,  Artificial  Intelligence (AI) is  also  considered  by  experts  to  positively  contribute  to  the  concept  of  SMART.   These  three  elements  are  critical  to  lay  a  strong  foundation,  for  a  Sustainable  SMART  City. There  are  four  pillars  of  a  SMART  City,  namely,  Physical,  Economic,  Institutional  and  Social  infrastructures,  upon  which  the  SMART  City  framework  is  built  which  provides  and  facilitates  all  services  to  its  citizens  in  a  swift,  easy,  safe,  transparent,  user  friendly  and  precise  targeted  manner,  thus  greatly  improving  the  quality  and  way  of  life  for  its  citizens,  the  health  and  thus  the  longevity  of  life,  of  the  citizens,  increasing  efficiency  and  productivity  on  all  fronts  and  of  all,  while  reducing  costs  and  benefitting  in  savings  of  time,  money  and  efforts. The  concept  of  SMART,  can  be  implemented  in  any  one  or  more  or  all  areas  in  a  city,  depending  on  the  needs  and  requirements,  the  resources  available,  and  the  capabilities  and  capacities  of  a  city.   A  city  can  opt  to  become  SMART,  gradually  and  step  by  step,  in  selected  areas.   An  ideal  SMART  City  can  be  broadly  categorized  and  implemented  in  following  areas  of  a  city : Building Construction  and  Management Roads, Transportation,  Traffic  and  Parking  Systems  and  Management Energy Systems and  Management Water Systems  and  Management Waste Water  and  Solid  Waste  Systems  and  Management Safety and  Security  Systems  and  Management Education Healthcare  and  Human  Services  Systems  and  Management City Governance  Systems  and  Management Communications Systems  and  Management Home Systems  and  Management Computing, Monitoring  and  Data  Analytics  Systems  and  Management Studies  establish  that  this  ideal  SMART  City  infrastructure  and  systems  last  upto  one  hundred  and  fifty  years.   This  brings  us  to  the  question  of  financing  to  create  an  ideal  SMART  City.   Certainly,  as  the  proverb  goes,  ‘to  reap  the  fruits  of  anything,  one  needs  to  put  in  Continue Reading

FINANCING A SMART CITY – II

WHAT ALL DOES A SMART CITY NEED FINANCING FOR ? As discussed in our SMART City series, in earlier articles, the two foundational components of a SMART City - Information and Communication Technologies (ICT) or popularly known as ‘Internet of Things’ (IoT) and Environment friendly e-initiatives which reduce carbon footprints with zero or reduced emissions, apply in all of the following. 1) SMART Physical Infrastructure and its Maintenance & Monitoring - Road Network - Bridges - Flyovers - Tunnels 2) SMART Public Transportation systems and its Maintenance & Monitoring - Underground Subway / Metro Rail Network - Buses 3) SMART Healthcare and Education and its Maintenance & Monitoring - Hospitals - Schools - Medical Equipments and Wearables 4) SMART Traffic and Parking Management systems and its Maintenance & Monitoring 5) SMART Energy with SMART Grid, Transmission and Distribution systems and its Maintenance & Monitoring - Solar Energy - Wind Energy - Biomass and Bio-gas Energy - Other Renewable Energy sources 6) SMART Water, Sanitation and Waste Management systems and its Maintenance & Monitoring - Rain Water Harvesting 7) SMART Buildings and its Maintenance & Monitoring, including of - Affordable / Low Income Housing - Slum organizing and upgradation 8) Cemeteries and Cremation Grounds systems & management and its Maintenance & Monitoring WHAT, HOW AND FROM WHERE ? Internal Sources constitute all DIRECT sources of income and revenues generated by and within the city only. Internal Sources for gathering Finances to create a SMART city are Secured, as well as Unsecured. In several cases, as observed, cities have adopted a Financing Mix of Debt and Equity from Internal Sources, for Financing their SMART City projects. 1) Land - Betterment Levies - Special Assessment Taxes - Exactions - Impact Fees - FSI (Floor Space Index) Charges - Land Taxes 2) Municipal Bonds (General Obligations Bond) without Guarantee, which are Tax Free and with low interest rate. 3) Revenue Bonds consists of Fees, User Charges and Asset Based Taxes - Highway Toll Charges - Utility Charges - Sewerage Charges - Sanitation Charges - Real Estate Property Taxes - Port Charges and Taxes (Air and Sea Ports) 4) Ancillary Services - Parking Charges - Leasing, Renting Shops, Restaurants, at and of Airports and Other Commercial properties, on a Operating Contract basis - Highway Concession Fees and Charges 5) Tax Increment Financing 6) Advertisement Taxes 7) Entertainment Taxes 8) Professional Taxes 9) Octroi and Intra-State Entry Taxes External Sources constitute all INDIRECT sources from where a city can gather Finances to make itself a SMART City. Generally, Financing is made easily available from External sources when the city is able to provide a collateral / Guarantee, based on SECURED Assets, Services and other revenue generation Internal Continue Reading

Financing a Smart City – I

How  to  Finance  a  SMART  City,  is  not  complicated  or  complex,  nor  is  it  tough,  as  far  as  city’s  books  are  clean,  corruption  free  and  in  order,  and  as  far  as  there  is  a  Political  Will  and  coherent  and  coordinated  agreement  among  all  the  stakeholders  to  make  the  city  SMART.   Getting  Financing  to  create  a  SMART  City,  is  no  different  than,  a  private  citizen  seeking  a  loan.   The  same  two  fundamental  considerations  apply  here  too,  and  which  are -  What  monetized  Internal  Sources  a  city  has  and  What  the  city  can  gather  from  available  External  sources,  based  on  its  capabilities  and  capacities. A  nations’  macroeconomic  Management  and  its  entailing  risks,  affect  not  just  the  broader  economic,  fiscal  and  financial  scenarios  of  a  State,  but  it  can  also  translate  into  restrictions  being  placed  and  hurdles  created,  for  a  State,  on  its  capability  to  raise  funds,  especially  as  the  State  operates  under  the  National  government.   Ideally,  7-8%  of  national  GDP  spent  on  infrastructure,  depends  on  fiscal  sustainability  and  creditworthiness  of  a  city. Considering  the  fact  that,  this  is  going  to  be  an  investment  by  the  city  resident  tax  payers,  of  which  the  fruits  and  rewards  shall  be  reaped  by  all,  for  generations  to  come (150  years  as  discussed  in  earlier  articles),  making  life  easier,  profitable  and  healthier,  it  is  extremely  essential  for  all  City Leaders  (as  discussed  in  earlier  articles)  and  stakeholders,  including  city  residents,  to  acknowledge  and  accept  the  fact  that  all  the  steps  of  Planning,  Connecting  and  Financing  are  followed  and  tapped,  in  a  systematic,  well organized,  Transparent  and  Accountable  manner,  with  a conscientious  effort  and  initiative  by  all  involved  to  go  the  extra  mile.   Not  doing  so,  can  very  well  derail  your  SMART  City  dreams,  and  pull  you  and  your  city  back  twenty  years. Zero  or  low  Debt,  Fiscal  Prudence  track  record,  Consistent  and  crystal  clear  rules,  policies  and  laws,  Strong  and  sound  Regulatory  framework  and  Institutions,  Systematic,  highly  organized,  Open,  Transparent,  Accountable,  Easy  and  Swift  governance  processes,  systems  and  mechanisms,  Predictable  Tax  and  Regulatory  regimes,  and  a  Strong,  fair,  swift  and  effective  Judiciary,  all these  combined  with  best  practices,  are  at  the  Core  for  any  city  to  gather  Financing  to  make  itself  SMART.   These  factors  are  also  critically  important  in  determining  the  creditworthiness  of  a  city,  when  it  approaches  External  sources  to  acquire  Financing.   Any  mumbo-jumbo,  double  meanings,  loopholes,  gaps,  neglect,  inconsistency,  politics,  game  playing,  in  any  of  these,  in  any  way,  shape  or  form,  can  Continue Reading

Financing Smart City – Planning and Connecting

smart-city-finance

Internet  of  Things (IoT) is  the  pillar,  upon  which  stand  the  two  essential  structures  of  Planning  and  Connecting,  to  create  a  SMART  City.   Information  and  Communications  Technologies (ICT)  solely  enable  the  Internet  of  Things (IoT). Planning  entails  three  major  factors  which  can  determine  how  SMART  you  want  your  city  to  be,  and  for  how  long.   These  three  factors  must  be  planned  based  upon  Information  and  Communications  Technologies (ICT),  to  create  a  SMART  City,  which  can  enable  efficient,  effective,  swift,  easy  systems,  in  a  Transparent  manner,  and  reducing  costs  and  corruption,  thus  saving  money,  time  and  bureaucratic  and  red  tape  maze.     These  are : Land Assessment Fair,  Correct  and  Transparent  land  assessment  is  critical  for  the  development  of  a  city,  especially  as  Land  is  the  only  resource  where  cities  can,  and  have  existed  and  flourished,  which  have  defined  civilizations.   Considering  the  climate  change  effects  and  the  rapid  erosion  of  lands,  replaced  by  rising  water  levels  due  to  the  melting  of  the  arctic  ice,  Vertical  Real  Estate  development  on  the  available  land  area  is  a  no  brainer.  Land  and  Real  Estate  for  centuries  have  been  the  favorite,  stable  destination  for  investments,  especially  for  the  rich  and  the  powerful,  which  has  created  the  nexus  of  parking  the  black  money  by  the  same,  which  has  resulted  into  manipulation  and  controlling  lands  and  Real  Estate  development  in  most  cities  around  the  world.  The  first  step  that  must  be  taken  here  is  to  give  Land  and  Real  Estate,  an  industry  status  and  a  Regulator,  which  can  only  take  away  the  control  from  a  handful  few’s  cozy  club,  and  let  the  city  develop,  what  we  all  deserve,  and  thus  a  Fair,  Transparent  Land  assessment  can  be  done. Land Allocation Allocation  of  Land  depends  primarily  on  the  number  of  population  in  the  city  and  therefore  the  density.   In  the  areas  where  density  is  higher  enough  open  spaces  (ideally  40%)  and  high  rise  Real  Estate  development  is  a  must.   While  allocating  lands  for  Real  Estate  development  affordable  housing  and  slums  need  to  be  given  due  consideration.   Unorganized  and  haphazard  pop-ups  of  slums  in  the  city  can  severely  damage  the  Real  Estate  prices  and  thus  the  economic  growth  of  a  city.   Auction  of  Lands  in  an  efficient  and  transparent  manner  is  critical  for  a  well  planned  SMART  City.   Flexible  and  long  term  view  Planning,  of  the  city’s  constraints,  advantages  and  resources,  while  allocating  Lands,  allows  a  SMART  city  to  meet  its  future  challenges,  rising  population,  changing  technologies  and  growing  economies. Land Management Land  Management  Continue Reading