Greenfield Smart Cities – Fuel for India’s urban vision

Published in Business World magazine, December 2016

Rationale for greenfield smart infrastructure – unparalleled potential to ‘do over’ cities

Economies globally are increasingly aiming to become smarter, by way of transforming all spheres of urban systems. Similarly, for realising India’s urban vision, structured interventions to transform Indian cities, such as the ‘Smart Cities Mission’ have been rolled out by the Government of India. The smart infrastructure projects, should accommodate scaling up of efficiencies and equip cities to effectively address evolving complex social, economic and political issues. For this, optimally utilising IT and digital technologies in improving the ‘Ease of Doing Business’ and the ‘Ease of Living’ in cities, will be central.

As part of the ‘Smart City Mission’s’ implementation methodology[1], while the envisioned area-based and pan-city developments aims to retrofit and redevelop existing components, the greenfield developments aims at introducing large-scale smart solutions. The very magnitude of possibilities and transformative outcomes of greenfield smart projects has made the concept of greenfield smart cities seem like potential panacea for Indian cities.

India’s greenfield smart cities in progress – scale and prospects warrant attention

Consider the Dholera Industrial City, which is envisioned to form the core of India’s fastest progressing Special Investment Region (SIR). Over 72 kms of major and minor roads, array of underground utilities such as stormwater drainage, water, waste water, power, gas and ICT, are part of the innovative design and conceptualisation. Aiming to be functional with infrastructure, manufacturing units and a population of around 1 lakh by 2019, the city’s long-term vision further envisions creating 8 lakh jobs by 2040.

Greenfield smart cities in India are being envisioned as optimally efficient urban centres of technology, job creation and living. The scale of investments and the areas covered by the cities help to throw light upon the magnitude of the projects.

Name of the Projects	Total Area (Sq. kms)	Envisioned Investments (INR crore)
Gujarat International Finance Tec-City (GIFT)	3.99	70,000 (cost of the total project)
Dholera Industrial City	22.5	3,000 (allocated by the government)
Naya Raipur	80	3,940 (proposed)
Lavasa	100	6,600 (incurred until now)

Sources: KPMG in India’s analysis

Potential challenges ahead for India’s greenfield cities – easier said than done

The essential focus for greenfield cities of Masdar (UAE) & Songdo (South Korea) is centred around innovative approaches related to solar energy, public transport, waste management. The design of Masdar city takes into account the local climatic conditions. The emphasis on high-rise constructions are intended to help ensure that streets get only 30-45 minutes of direct sunlight a day in the desert climate, contributing to natural cooling. Likewise, Songdo’s proposed waste collection system eliminates the need for trash trucks. Source: http://songdoibd.com/, http://www.masdar.ae/

The challenge for planners lies in combining smart urban development with the larger requirements of sustainable growth of cities. For example, the urban form of proposed greenfield cities has a direct correlation with energy consumption and transportation. Smart greenfield models should provide for a diverse mix of housing types, sizes, and prices within regions, communities and neighbourhoods, supported by an integrated, multimodal transportation network. Besides, the introduction of sophisticated data analytics for understanding, monitoring, regulating and planning the city would enable real-time analysis and insights. Thus, a flexible policy framework that is future oriented and citizen centric is imperative for shaping urban governance for smart greenfield cities.

Furthermore, planners need to take into account the self-sustainability of greenfield cities with regard to job creation and resource management. In greenfield projects, renewable energy such as solar and wind energy can ensure uninterrupted power supply for industries and other establishments in the city, which in turn can boost manufacturing and economic growth. 

Who invests in greenfield cities?

Greenfield projects mandate large-scale requirements of land and capital. Land acquisition (including acquiring agricultural land) should be in line with the myriad of regulations, which currently is not only time-consuming but also project-threatening. The show-cause notice to Lavasa’s developers, farmer-resistance in Dholera, etc. have had significant time-costs associated to them.

Given the nature of extensive funding requirements and limited government capacity, identification of apposite funding mechanisms for smart city infrastructure and technology investments is critical for greenfield cities. Sale of land parcels for commercial and residential purposes is a universal mechanism to recover initial capital investment by government and investors. However, it has been observed that traditional sources of financing are unable to address the requirements of innovative smart city infrastructure. Therefore, decision makers are in the process of exploring alternative sources of financing business models and partnerships, wherein, the cost recovery mechanism of each infrastructure investment is defined at the onset.

In addition to traditional approaches such as PPP (Public Private Partnership), funding for greenfield cities may also be addressed through innovative measures such as TIF (Tax Increment Financing) and data monetisation. Besides this, the recently established international financial institutions such as Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB) could be potential funding sources for greenfield smart cities in India.

Conversely, the discourse over the last year on Indian smart cities has revealed the general lack of willingness of infrastructure funds or sovereign wealth funds to invest in greenfield projects due to exposure of construction risk and concerns on slow procurement processes. Therefore, there is a compelling need for government to focus on developing adequate legal frameworks, institutional strength and reliability to attract this capital for greenfield smart city developments.

Inclusivity – the raison d’être of Indian cities

In the context of urban India, planners and decision makers should ensure that citizens engaged within the informal sector are ensured place, space and opportunities within proposed greenfield smart cities. Given the scale of the informal economy, future models need to take into account existing social infrastructure and address the specific needs of the vulnerable groups. Ensuring affordable smart infrastructure such as piped water and electricity through innovative mechanisms would go a long way in promoting the social objectives of greenfield smart cities.

M-KOPA Solar (www.m-kopa.com) is an innovative asset financing company that sells small-scale solar home systems (SHSs) in Africa to off-grid households on an affordable, 12-month mobile money payment plan via hire purchase. The battery-powered 8W home system has three lights, a phone-charging facility and a chargeable radio. As of September 2015, M-KOPA actively provided affordable solar power to over 2,50,000 households in East Africa – and is adding a thousand more households per week. A combination of innovative technology, effective distribution system, compelling value proposition, and a strong focus on customer care provided the successful foundation for an inclusive business model to deliver clean and affordable lighting for the masses.  Source: http://arcfinance.org/

Finally comes the task of integrating societies – are we ready for an elaborate mesh of sensors and cameras recording us, companies and administration gathering data on us, in a scenario where privacy protection framework is already weak? How will property tax collection in Dholera differ from Ahmedabad (shortlisted smart city)? More importantly how will the administrative services between the 2 cities be integrated?

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[1] Source: Smart Cities Mission Statement & Guidelines, Ministry of Urban Development, Government of India, June 2015, http://smartcities.gov.in/writereaddata/SmartCityGuidelines.pdf

Role of IOT in Smart Cities

http://bwsmartcities.businessworld.in/video/-Dr-Jaijit-Bhattacharya-talks-about-Smart-Cities-and-Role-of-IoT/04-05-2016-22/

My views on Demonetisation and Black Money

Democracy & Dictatorship EP 10: Demonetisation and black money

http://www.wionews.com/videos/democracy-dictatorship-ep-10-demonetisation-and-black-money-1368 via @wionews

My views on On Scrapping Of Rs 500 & 1000 Notes

My views on Deconstructing Demonetisation

India's feeble claims to Digital Sovereignty

First Published on April 9, 2009 in Business Standard

http://www.business-standard.com/article/technology/india-s-feeble-claims-to-digital-sovereignty-109040200100_1.html

http://www.rediff.com/money/2009/apr/02indias-feeble-claims-to-digital-sovereignty.htm

As India moves to occupy the space of an IT superpower, the claim to digital sovereignty appears hollow given that it has a feeble presence at the high-stake tables of IT standards. IT standards have become one of the preferred tools of technology giants from developed economies to extract undue economic benefit from emerging economies.

Given that India does not appear to have the political resolve to enhance its presence at the global forums on international IT standards, we seem to be abdicating our responsibility to secure our IT industry as well as IT usage.

The issue becomes even more severe when we observe that globally, nations and firms, are trying to convert technologies on which they have an intellectual property rights (IPR) into standards, thus forcing their monopoly on economies and extracting an unfair and undue economic benefit from manipulation of the global IPR and standards regimes.

The declared aim of standardisation is to enhance productivity and facilitate international trade. The WTO Technical Barriers to Trade (TBT) agreement allows for simplification of trade and removes obstacle to trade; reduces need for changing design and manufacture to meet national requirements, reducing complexity and cost; and provides greater choice and understanding for customers.

Compare this to the case where the combination of IPR and standards can give undue economic benefit to large foreign players in developing countries such as India, without the monopoly players adding commensurate value to the economy.

A very good example of the devastating effect of the current IPR regime is the case of the DVD manufacturers in China who have to pay royalty charges on each DVD player manufactured that is to the tune of 33 per cent of the retail price of the DVD player, for a video format standard that is used ($20 royalty on a player of $60). China was helpless in preventing such an unfair cess being put on its domestic industry, demonstrating its lack of digital sovereignty at that point in time.

It is impossible for the majority of the citizens to buy a $400 (around Rs 20,000) PC when the per capita annual income of the citizens is around $500 (around Rs 25,000).

Therefore, if the 7.5 million PCs sold in India last year could avoid paying for the operating system, it could result in huge savings. This is possible as free software exists but the operating environment is heavily loaded against use of such software, which demonstrates India’s lack of digital sovereignty.

Similarly, other consumer goods with embedded software like DVD players, mobile phones etc., can also be made to cost less with the appropriate policy measures that India can take, only if India has digital sovereignty.

It has been observed that organisations file blanket patents on an emerging technology that is out of reach of developing countries. Such multiple patents are put in a manner that prevents late joiners from being able to find any niche of making any new contribution to the area without violating the patents already filed in.

None of the standards bodies such as ISO, IEC, IEEE are mandated to check if the standard adopted is truly royalty free. Thus, the global technology framework is being misused to indulge in anti-trust (monopolistic) practices.

This is where we start losing our digital sovereignty. It is imperative for India to ensure that it is a serious player in formulating digital standards in order to ensure security of its IT industry and to maintain its digital sovereignty.

The Future of Indian Railways 2050

Future of Indian Railways 2050

(As published in Business India, August 2016)

Indian Railways will have to transform so significantly by 2050 that not only will it be recognizable from its current operations but also most of its current assets will get replaced completely.

We need to understand the drivers that will make this transformation an imperative.

As per the UNDP Regional Human Development Report, India’s working population (people in the age group of 15 to 64 years) will be over a billion by 2050, which will be the largest workforce in the world. This workforce will be highly mobile. In addition, it is expected that over 70% of the population will be urban by 2050 and would have a higher mobility requirement. Given the load carrying capacity of various transportation options and their impact on the environment, railways would have to shoulder the bulk of this massive transportation requirements.

The second key trend driving railways is technological transformations. Mass transportation will be completely transformed in the next 30 years with technologies such as high speed rails (bullet trains), hyperloops (currently being tested in California and Russia among other places), Internet of Things, solar energy, large scale electrification of the economy and moving away from dependence on oil based technologies etc, driving this transformation.

In addition, railways will face competition from other modes of transportation such as road transportation, riverine transportation, coastal shipping and air transportation. Each of these transport systems will become much more efficient, faster and autonomic, implying that they will be managed by computers and would not require dedicated operators such as drivers, pilots etc. Hence these transportation systems will also become cheaper and in addition, will be significantly less polluting than what they are now.

 What that would imply for Indian railways is that it would have to start adopting newer systems of mass transportation, that would transport people and goods much more efficiently and at speeds that are an order of magnitude higher. Such systems would require complete overhaul of the railways as we see them today, with even the tracks requiring to be changed and perhaps even getting replaced by other locomotion enablers, as in the case of Hyperloops, which would require tubes rather than rails for locomotion. Clearly, railways too will become autonomous, requiring no train drivers, station masters,  manned crossings etc. Such a transformation would require a completely new signaling system and railways infrastructure, including automated gates at road crossings, systems that talk to the surroundings such as to incoming trains, vehicles at crossings and perhaps even airplanes, so that not only do the trains travel faster and safer, but are also able to coordinate with modes of transportation that passengers would need to use or that cargo would need to use. For example, if bulk of the passengers are going from one city to another, primarily to take a long distance flight, then the train would need to be in touch with the airplane company, to ensure that delays, If any, get factored into the dynamic rescheduling.

Indian railways in 2050, would also be a different ecosystems from the current one that is dominated by a single behemoth. Indian railways in 2050, would be corporate dominated ecosystem, with perhaps the current Railways Board transforming into a corporation. It would have all kinds of business models with private players managing their own coaches in a larger train, to running entire trains and owning the linear assets (such as railways tracks or the tubes for hyperloop), to owning railway stations. It would not be unthinkable to have airline companies expanding into railways to provide seamless travel  experience to passengers and cargo.

In addition, Indian Railways in 2050, will not be limited to the borders of India. It would connect with the economies in the east, it would connect with the economies in Central Asia and would perhaps stretch all the way to Europe, in partnership with railways in other countries.

Indian Railways will also start generating significant revenues from non-ticketing sources such as onboard retailing through digital retail, monetization of non-tangible assets, and leveraging technology. It will have a very diversified portfolio of cargo and will not be limited to bulk cargo such as coal (which anyways will have a very limited role by 2050).

Indian railways in 2050 will clearly be unrecognizably different from today’s railways, to be able to shoulder the responsibilities and challenges of the people workforce and cargo of 2050.