Now that the Central Government has selected Belagavi to be one of the 20 Smart Cities, the action has shifted to the civic body which will have to incorporate a company, a special purpose vehicle (SPV) under the Companies Act, 2013 with it and the State Government having 50:50 equity shareholding. The initial paid-up capital of the SPV will be a minimum of Rs. 200 crore.
The civic bodies and the state governments have been informed of the guidelines for the formation of the special purpose vehicle (SPV) for the smart city but this comes with a rider that the citizens will have to pay user charges to avail the facilities provided under the smart city project as there will be investment required to develop the facilities. The Centre will provide only Rs 500 crore in five years and the remaining will have to be raised by the respective civic body.
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.
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.
As all the disbursement would be in the name of SPV and not the city corporation the Union secretary asked the mission cities to focus more on other means of resource mobilisation like convergence of various schemes, rationalisation of user charges.
The SPV will have to submit quarterly reports to the Central Government and that will include satisfactory improvement in works and effective utilisation of the money already granted. And, the SPV board will have to pass a resolution that the conditions have been met.