Beyond the hype around the smart cities project launched by the Indian government, IT companies are worried about financing and have other big concerns.
“Financing is emerging as a prominent issue since nobody is clear as to how to monetize it,” Aamer Azeemi, a managing director with Cisco Systems Inc. (Nasdaq: CSCO), told Light Reading on the sidelines of the recent Smart Cities India 2015 event. “A big project like this has to be self-sustainable.”
Vendors are undoubtedly enthusiastic about the government’s plans to turn 100 Indian cities into smart cities by 2022. Authorities have allocated 70.6 billion Indian rupees (US$1.1 billion) towards the development of these cities. Moreover, the project could create a business opportunity worth as much as $30-40 billion for the IT sector over the next five to ten years, according to National Association of Software & Service Companies (Nasscom) , an Indian trade association.
But there is much concern, with various speakers at Smart Cities India 2015 highlighting sustainability as one of their chief worries. “The project has to be economically viable otherwise it will be difficult to sustain,” says Rakesh Kaul, a partner for government and public services at PricewaterhouseCoopers India.
Another issue is the lack of a coordinating body in the Indian government, responsible for all of the decisions related to smart cities. “There is no nodal agency as of now, which might delay the decision-making,” says Azeemi. “It can become a wild goose chase to get clearances from multiple departments. The government has to come up with a central agency to expedite the implementation.”
Many believe that India has plenty of catching up to do before it can really start planning for a smart cities rollout. “The growth has to be inclusive. We have to take connectivity to the rural areas and provide infrastructure in social, education and health segments,” says PwC’s Kaul. “It will lead to new governance and business models.”
While Indian IT companies have already collaborated on smart city projects in other parts of the world, they maintain that similar approaches might not work in India. Experts agree that India’s smart city requirements are totally different from those elsewhere.
“IT companies have participated in the transformation of smart cities across the globe but solutions for India will need to be different,” says BVR Mohan Reddy, the chairman of Nasscom. “We can certainly learn from the enormous amount of knowledge garnered by other projects.”
But some smart city action is already under way in the country. Jaipur in the state of Rajasthan is now preparing a blueprint for digitization with the help of Cisco, which is also working with IBM Corp. (NYSE: IBM) on a similar project in Dholera in the state of Gujarat. India’s Tech Mahindra Ltd. is also active near Jaipur, building a smart city dubbed Mahindra World City that will cover 3,000 acres. “We have implemented a number of global projects like Dubai Smart City and we are using that knowledge to develop smart cities in India as well,” says Dr Rishi Bhatnagar, the vice president and head of digital enterprise services for Tech Mahindra.
Besides all this, the central government and various state administrations have been issuing requests for proposals to smart city planners. “I am currently looking at five different RFPs,” says Cisco’s Azeemi.
Nonetheless, vendors realize that India’s idiosyncrasies might require a diametrically different approach. CN Raghupathi, the head of the India business unit for Infosys Technologies Ltd. (Nasdaq: INFY), says that sensors must be adapted to suit “Indian conditions,” citing an unusual incident where monkeys damaged equipment after being attracted to the red lights used in sensors on a particular project.
“The question of catering to varying demographics is also more pronounced in India,” he says. “The requirements of brownfield cities will be totally different from those of greenfield smart cities and we need engineers with appropriate skills. So there are various issues.”