Third-Party Audits for Smart Cities Mission | 06 Jan 2025

Source: LM 

Why in News? 

Recently, a Parliamentary Standing Committee on housing and urban affairs has called for third-party assessments of projects under the Smart Cities Mission (SCM).  

• This is aimed at addressing gaps in implementation, especially in smaller cities. 

What is the Need of a Third-Party Audit for the SCM? 

• Assessment and Transparency: Third-party evaluations offer an unbiased analysis of project progress and impact under the SCM, helping to identify implementation gaps and areas for improvement.  
  • They also enhance transparency, fostering trust among stakeholders, including citizens, government bodies, and investors. 
• Evidence-Based Policy: It can explore how the expertise of Special Purpose Vehicles (SPVs) in urban development can be applied to other initiatives like AMRUT and DAY-NULM, enhancing the broader impact of urban transformation programs. 
• Addressing Disparities: Larger cities perform well due to better resources, while smaller cities, especially in the northeast, face challenges in project execution, so independent audits can highlight these disparities and suggest improvements. 
  • Also, the third-party assessments can tailor strategies for tier 2 cities, promoting balanced development and decongesting metropolitan areas. 
• Strengthening Urban Local Bodies (ULBs): Many ULBs lack the technical and financial capacity to manage large-scale projects under SCM. 
  • Third-party assessments can identify best practices to enhance urban planning and governance while providing data-driven insights for informed policymaking and efficient resource allocation. 
• Future Planning and Sustainability: It will provide valuable insights for planning future phases of the SCM, ensuring sustainability and alignment with urban growth needs.  
  • They also contribute to a more integrated approach to urban development, considering economic, social, and environmental factors. 

What is the Smart Cities Mission (SCM)? 

• About: SCM is a Centrally Sponsored Scheme launched in June 2015 with the aim to transform 100 cities of India by providing them with necessary core infrastructure.  
  • Additionally, to provide a clean and sustainable environment in cities to enable a decent quality of life to their citizens through the application of "Smart Solutions. 
• Objectives: 
  • Promote efficient use of resources, green spaces, and environmental sustainability. Ensure access to clean water, electricity, sanitation, healthcare, and public amenities. 
  • Enhance governance through digital platforms, e-governance, and citizen participation. Provide affordable housing solutions, especially for economically weaker sections. 
  • Improve public transport systems and reduce congestion with smart traffic management. 
  • Ensure the safety of citizens, particularly vulnerable groups, through surveillance and emergency services. Create robust IT infrastructure for seamless access to services and information. 
  • Develop model cities to showcase best practices for other cities to replicate. 
• Key Components: 
  • Area-Based Development: 
    • Redevelopment: Upgrading existing urban areas with enhanced infrastructure (e.g., Bhendi Bazaar, Mumbai). 
    • Retrofitting: Modernizing infrastructure in existing localities (e.g., Ahmedabad’s Local Area Development). 
    • Greenfield Development: Building new, sustainable urban spaces (e.g., New Town Kolkata, GIFT City). 
  • Pan-City Solutions: 
    • Adoption of Information and Communication Technology (ICT) solutions across sectors like e-governance, waste and water management, urban mobility, and energy efficiency. 
• Governance Structure: Implementation through Special Purpose Vehicles (SPVs) established under the Companies Act, 2013, led by bureaucrats or industry representatives. 
  • Emphasis on a Public-Private Partnership (PPP) model for funding. 

 What are the Challenges in Implementing SCM Projects? 

• Cost and Funding: The development of smart city infrastructure requires significant investment in upgrading existing systems, deploying sensors, and maintaining networks. 
  • While 74 cities have received 100% of their central share, 26 cities are yet to get the full funding due to the slow progress of projects. 
• Displacement and Social Impact: According to the World Bank, in urban areas of India more than 49% of the population live in slums.  
  • The execution of smart city projects has led to the displacement of residents in poorer areas, such as street vendors, disrupting the fabric of urban communities. 
• Delay in Project Completion: Despite the extension of the deadline, a significant number of projects (around 10%) are still incomplete, indicating delays in execution. 
  • This can be attributed to factors such as inadequate planning, lack of technical expertise, and issues in land acquisition and clearances. 
• Privacy and Data Security: The collection and analysis of vast amounts of data from sensors, devices, and citizens raise concerns about data breaches, unauthorized access, and misuse.  
  • Ensuring robust cybersecurity, safeguarding privacy, and implementing clear data governance policies are essential for building public trust. 
• Lack of Coordination: Effective coordination between the central, state, and local governments has been a challenge due to differences in priorities, bureaucratic hurdles, and lack of clarity in roles and responsibilities that have hindered the seamless implementation of the mission. 
• Sustainability Concerns:There are doubts about the long-term sustainability of the smart city projects, as many of them focus on technology-driven solutions rather than addressing the fundamental issues of urban planning and governance.   
  • The SCM acknowledges the absence of a universal definition for smart city.  

Way Forward 

• Addressing Funding Issue: There is a need to explore the PPP model and seek central, state, and international financial support. Ensure transparent fund allocation and regular monitoring for efficient utilization and timely project progress. 
• Capacity Building: Strengthening Urban Local Bodies (ULBs) through capacity-building programs and central government support for restructuring and skill development will enhance governance and project execution, especially in smaller cities. 
  • India should leverage its leadership in sustainable urban development by collaborating with other developing nations and establishing knowledge-sharing platforms to accelerate smart city initiatives regionally and globally. 
• Timely Project Completion: There is a need to prioritize detailed planning, address bottlenecks like land acquisition, and deploy specialized project management teams. Streamline bureaucratic processes to ensure timely approvals and clearances for faster execution. 
• Ensuring Data Security: Establish a comprehensive data protection policy with robust cybersecurity measures and clear governance frameworks to ensure transparency and privacy.  
  • Also public awareness should be promoted to build trust and address concerns about data misuse. 
• Sustainability and Long-Term Planning: Smart city projects should prioritize sustainability by integrating environmental, social, and economic considerations in planning.  
  • Developing long-term Operation and Maintenance (O&M) strategies will be key to ensuring the longevity and adaptability of smart city infrastructure. 

Conclusion 

The recommendations for third-party assessments and capacity-building in smaller cities highlight the need for robust mechanisms in the Smart Cities Mission. Timely interventions, governance reforms, and actionable insights from impact assessments can address existing challenges and pave the way for a more inclusive and effective urban transformation in India.