[Urbanstudy] 89% of investment in first 20 smart cities related to real estate: RICS

[Vinay Baindur]

http://realty.economictimes.indiatimes.com/news/industry/89-of-investment-in-first-20-smart-cities-related-to-real-estate-rics/53282539

89% of investment in first 20 smart cities related to real estate: RICSA
meager 7% of investment is allocated for technology infrastructure, while
4% of investment is allocated for public services, the report titled 'Urban
Makeover: Evolution or Revolution' said.Sanu Sandilya
<http://realty.economictimes.indiatimes.com/author/479238876/sanu-sandilya>
  |  ETRealty  |  Jul 19, 2016, 03.11 PM IST

NEW DELHI: Real estate is set to become the real beneficiary of the
government's flagship '100 Smart City' programme, with the highest chunk,
about 89%, of the total proposed capital investment of Rs 48,220 crore in
the first 20 smart cities planned to be spent on built environment,
transportation, water and wastewater management and energy, according to a
white paper by The Royal Institution of Chartered Surveyors (RICS).



A meager 7% of investment is allocated for technology infrastructure, while
4% of investment is allocated for public services, the report titled 'Urban
Makeover: Evolution or Revolution' said.

About 74% of the investment, or Rs 35,700 crore, is targeted towards area
based development in the first 20 cities, rather than city-wide
development, which comprises capital expenditure of just Rs 12,150 crore.

"RICS white paper among other things examines how the Indian model of smart
cities is unique because it promotes area based development instead of pan
city development," said Devina Ghildial, managing director, South Asia,
RICS. The proposed sources of funding for the first 20 smart cities
comprise majorly of Smart City mission grant of Rs 20,000 (41%), private
investment of Rs 10,520 crore (22%) and converged funds from other Central
sector schemes of Rs 7,832 crore (16%). Debt and other sources of funding
account for Rs 5,742 crore (12%) and Rs 4,746 crore (10%), respectively.

The 100 Smart Cities Mission was launched in June 2015, with a funding
provision of Rs 500 crore for each of the 100 cities that would be selected
competitively to avail the benefits over period of five years.

A total of 31 cities have been selected as on date, 20 directly through
competition, and another 11 recently added through a fast-track process.

Smart cities are being developed by developing a small area, either by
retrofitting, redevelopment or development of entirely new areas (green
field) - collectively referred to as compact area development, and some
initiatives in improving services on a city wide basis.
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