Most smart cities to come up in Uttar Pradesh , Tamil Nadu and Maharashtra

NEW DELHI: Uttar Pradesh will get the highest number of smart cities, followed by Tamil Nadu and Maharashtra, in line with a government-approved formula that gives equal weight to population and the number of “statutory towns“ in each state. UP will be eligible to “build“ 13 smart cities -which it can do either by retrofitting parts of an existing town (minimum 500 acres), redeveloping some of them by pulling down buildings ( spread over at least 50 acres) or setting up greenfield projects (spread over at least 250 acres). According to the proposal cleared by the Cabinet, TN will get 12 smart cities and Maharashtra, 10.

“The idea is to create a model which demonstrates value both within and outside the city ,“ urban development secretary Madhusudan Prasad told TOI, adding that, irrespective of the development model selected, at least one pan-city project has to be taken up. For instance, a city could decide to implement an intelligent transport system or smart parking for the entire population, while opting to retrofit one part of the city.

The land area requirement means that rebuilding or retrofitting of localities such as areas around Connaught Place in the Capital would be eligible for the scheme, which entails an overall funding of Rs 48,000 crore from the Centre. States and urban local bodies will pitch in with an equal sum over the next five years. Initial estimates, however, suggest that one retrofitting project will cost at least Rs 3,000-4,000 crore, and each redevelopment, Rs 12,000-15,000 crore. Based on the calculations, the minimum investment required for just retrofitting 100 smart locations would be Rs 3 lakh crore, a move expected to trigger demand for cement and steel, and also create millions of jobs. But funding, experts said, is going to be a challenge.

While the Centre will chip in with Rs 500 crore annually , with a matching contribution from the state or urban local body , the rest of the money has to be raised by the special purpose vehicle implementing the project. Sources said the SPV may have to raise resources via redevelopment fee or by setting aside its property tax receivables into an escrow account and leveraging it to borrow from the market.