India is at the precipice of urban awakening in the light of building inclusive cities and fostering urbanization via a strong infrastructure foundation. To incrementally improve the challenge of resource management, connectivity problems, city planning issues, public services on-the-go, sustainability and urbanization challenges, and centralized governance, Prime Minister Narendra Modi prepares India via its smart city project to enhance quality of 100 selected cities with 24 hours power supply, world class transportation system, better education and recreation facilities, aviation, tourism, high-speed intercity railway links, and e-governance on PPP model ��" creating an ecosystem of planned development.
Recasting the urban landscape and building planned cities would require a 360 degree holistic approach by the centre & state governments, financial institutions, developers, and highway and urban management companies to bridge the rural and urban development divide. Transformation of urban infrastructure with an ever-growing population will sense a respite as the government has just launched Rs. 98,000 crore smart city project. Smart city, in that way, covers the entire infrastructure landscape - right from enabling road connectivity across public places via strategically planned distance from the airports, tourist places, hotels, hospitals, airports, malls, streets and universities; ensuring public and private security; water supply; and effective power management - all of which are connected, facilitated, managed, and enhanced by the key infrastructure stakeholders.
As the Indian cities undergo rapid urbanization, companies from multiple business categories and investors from varied industries such as real estate, finance (private equity players and banks), aviation, transportation, railways, education, retail, tourism, and many more will witness a more aggressive market for infusing their money in these smart cities. With the Make In India initiative, the government has USD 3.8 billion outlay planned for highways, USD 19 billion infrastructure development between 2015 -2017, and building 100,000 Kms of highway by the 2017. Out of 26 projects 8 projects worth USD 1294 millions are on PPP basis. In addition, The National Highway Development Project (NHDP), a USD 60 Billion, seven-phase programme - one of the largest in the world ��" is focusing on the widening, upgradation and rehabilitation of 47,054 kms of National Highways. Countries such as Malaysia, Indonesia, Malaysia, Korea, and China are already investing in India’s national highway development projects. And via government’s promising ‘Make in India’ infrastructure initiatives, especially for 2015-2017, India will see an increased investment by the US.
Cities form the bedrock for inclusive development at affordable prices - and offer a promise for a better quality of life via sound streamlined and well executed infrastructure development initiatives. They play a pivotal role in generating lion’s share of tax revenue for the government via attractive tourism for the public; generating employment opportunities in the key development functional areas of smart city projects such as smarter aviation, managing railway system, public transportation, security services, education institutions, healthcare firms, shopping malls, urban management, increased toll revenues; and most importantly, via centralized governance.
The National Highway Authority of India has earmarked a budget for 50,000 crore for road projects for fiscal year 2015-2016. According to CRISIL, work has started on 75% of the 16 road projects to unclog the nation’s choked infrastructure this year. To a large extent, financing, managing and operation these backlog of these toll road projects will see a new form of PPP models under consideration for India, based on an Ernst and Young report. These include Modified Annuity (Grant + Annuity + Toll); Hybrid PPP (project jointly funded by the authority and concessionaire); BOT model where construction is financed by the authority; and BOT toll with funded EPC for structures. This will serve as a starting point for a sustainable economic growth - and when executed well by the toll and highway management operators and government (in unison), this practice will serve as a blueprint for the rest of the toll projects pan India.
As we move towards a large-scale urbanization, the life of the average city dweller in India facing an ‘urban gridlock’ can be successfully addressed.
(Contributed by Navneet Pratap Singh, CEO, Skylark World)
