Potholes Lurk in Indian Smart City Project

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."

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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."

— Gagandeep Kaur, contributing editor, special to Light Reading

Joe Stanganelli 5/29/2015 | 2:24:35 PM
Re: Slowly Turning "Indiaward" @nasimson: That's good to know!  I haven't been, so I will defer to your expertise.  :)
kq4ym 5/27/2015 | 8:26:34 AM
Re: monkey-proof networks... Yes the monkey business aspect is surely unusual from the point of view of non-Indians! But too something has to be done about the bureaucracy as presumably it has "become a wild goose chase to get clearances from multiple departments." Ironic that becoming a smart city involved wading through lots of different government office paperwork.
mhhf1ve 5/26/2015 | 10:39:51 PM
monkey-proof networks... It'll be interesting to see how they deal with the monkey problems.. it's hard enough to guard against human vandalism in many cities, but to add an additional requirement that various sensors and components might need to be monkey-proofed? :P
nasimson 5/26/2015 | 10:11:06 AM
Re: Slowly Turning "Indiaward" @Joe: Having visited after every two years, I am quite impressed with the developments happening. Current Modi government is very aggressive and has proven to deliver, so I am quite sure they'll do a decent job here too.
jabailo 5/23/2015 | 8:37:40 PM
Re: Slowly Turning "Indiaward" Sure but a lot of it is manpower (something India has in abundance) as much as techology.

Laying  broadband network...optical fiber...with local DSLAM nodes.   That's low tech almost, but high labor.   Even a mobile network.   Building and maintaining towers.   

By turning India-ward, the nation creates many new jobs.

The "high tech" can be at first bought, then mastered, then eventually built in India and sold as export over time.

danielcawrey 5/23/2015 | 1:29:41 PM
Re: Slowly Turning "Indiaward" India is well known for its IT skills prowess. Even so, that doesn't mean that it can easily upgrade infrastructure in order to support a ton of smart cities.

There are a bunch of places all over the world that are struggling with these infrastructure issues and I'm sure that same problem will plague India as well. 
Joe Stanganelli 5/22/2015 | 10:31:55 PM
Re: Slowly Turning "Indiaward" They need the infrastructure first, though -- not just the technological infrastructure, but the governmental and organizational infrastructure.  It appears that things are still a ways off there.
nasimson 5/22/2015 | 8:20:40 PM
Re: Slowly Turning "Indiaward" The American and Indian recession helped the country and its residents through reverse brain drain. Having visited their cities over last multiple years, I am witness to the quality of their policies and implementation. It has risen many fold.
nasimson 5/22/2015 | 8:13:23 PM
100 smart cities by 2022 100 smart cities by 2022. That's way ambitious. But not too ambitious for the nation that has already landed on Mars. If India pulls this off, they will be a world leader in this category.
jabailo 5/22/2015 | 10:29:28 AM
Slowly Turning "Indiaward" It sounds like the great technological economy, long an outsourcing service, is finally building a domestic market, perhaps spurred by government spending, and turning In(dia)ward.
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