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From where will the money come for the Smart City

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Belagavi is now officially part of the Smart city, its one amongst the top 20 to be selected for the smart cities. The Belagavi City Corporation in its Smart city plan has planned a total estimation plan expenditure of Rs 3,866.14 crores for Smart City over the next 5 years.  Many of the projects included in the SCP are many ongoing and deferred plans like Heritage park at Vaccine depot, renovation of Belagavi fort etc.

Belagavi Smart city proposalFunding:
All the funds will have to pass through a Special Purpose Vehicle (SPV) which will be monitored by the ministry of Urban development and will also have its nominee on the same.
State government will contribute major share of Rs 1,984.53 to 2,038 crores while Rs 856 to 890.26 crores from central. It comprises Rs 651.71 crores under Smart City and Rs 230.50 crores from Amrut project as city also selected under this project.
Share of the local body will be Rs 135.25 crores while Rs 856.10 crores though PPP model.

Raising Rs.856.10 crores though PPP (public private partnership) model will be daunting task. Without significant participation and funding by the industry through the PPP model the SCP runs the risk of falling apart.

Although the private sector (both domestic and international players) has shown enthusiasm about engaging in the smart city project, the industry is seeking assurance about return on investment.

PPPs are commercial transactions between a public and a private party by which the private party: – performs a function traditionally performed by the public sector for an extended period of time; – assumes related construction, commercial, and operational risks; and – receives a benefit in exchange, either by way of public authority paying from its budget, or user fees, or a combination of these.

Smaller infrastructure projects can be developed with negligible public investment through PPP with quick turnaround time, going a long way in making cities better and safer. Private sector can be involved in implementing energy efficiency measures in water supply, maintaining street lights, etc.

1 thought on “From where will the money come for the Smart City”

  1. Yes.. i agree with you that PPP will be a risk.. we already saw an example of Belgaum bus stand… there were no takers for the tender floated by govt.


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