The implementation of the Mission at the City level will be done by a Special Purpose Vehicle (SPV) created for the purpose. The SPV. will plan, appraise, approve, release funds, implement, manage, operate, monitor and evaluate the Smart City development projects. Each Smart City will have a SPV which will be headed by a full time CEO and have nominees of Central Government, State Government and ULB on its Board. The States/ULBs shall ensure that, (a) a dedicated and substantial revenue stream is made available to the SPV so as to make it self sustainable and could evolve its own credit worthiness for raising additional resources from the market and (b) Government contribution for Smart City is used only to create infrastructure that has public benefit outcomes. The execution of projects may be done through joint ventures, subsidiaries, public-private partnership (PPP), turnkey contracts, etc. suitably dovetailed with revenue streams.
The SPV will be a limited company incorporated under the Companies Act, 2013 at the city-level, in which the State/UT and the ULB will be the promoters having 50:50 equity shareholding. The private sector or financial institutions could be considered for taking equity stake in the SPV, provided the shareholding pattern of 50:50 of the State/UT and the ULB is maintained and the State/UT and the ULB together have majority shareholding and control of the SPV.
Funds provided by the Government of India in the Smart Cities Mission to the SPV will be in the form of tied grant and kept in a separate Grant Fund. These funds will be utilized only for the purposes for which the grants have been given and subject to the conditions laid down by the MoUD.
The State Government and the ULB will determine the paid up capital requirements of the SPV commensurate with the size of the project, commercial financing required and the financing modalities. To enable the building up of the equity base of the SPV and to enable ULBs to contribute their share of the equity capital, GoI grants will be permitted to be utilized as ULBs share of equity capital in the SPV, subject to the conditions given in Annexure 5. Initially, to ensure a minimum capital base for the SPV, the paid up capital of the SPV should be such that the ULB’s share is at least equal to Rs.100 crore with an option to increase it to the full amount of the first instalment of Funds provided by GoI (Rs.194 crore). With a matching equity contribution by State/ULB, the initial paid up capital of the SPV will thus be Rs. 200 crore (Rs. 100 crore of GoI contribution and Rs. 100 crore of State/UT share). Since the initial GoI contribution is Rs.194 crore, along with the matching contribution of the State Government, the initial paid up capital can go up to Rs.384 crore at the option of the SPV. The paid up capital may be enhanced in the subsequent years as per project requirements, with the provision mentioned above ensuring that ULB is enabled to match its shareholding in the SPV with that of the State/UT.
The structure and functions of the SPV are given in Annexure 5 and the Articles of Association will contain such provisions. A model Article of Association is given in the Toolkit.
After selection of the cities in Stage II of the Challenge, the process of implementation will start with the setting up of the SPV. As already stated, it is proposed to give complete flexibility to the SPV to implement and manage the Smart City project and the State/ULB will undertake measures as detailed in Annexure 5 for this purpose. The SPV may appoint Project Management Consultants (PMC) for designing, developing, managing and implementing area-based projects. SPVs may take assistance from any of the empanelled consulting firms in the list prepared by MoUD and the handholding agencies. For procurement of goods and services, transparent and fair procedures as prescribed under the State/ULB financial rules may be followed. Model frameworks as developed by MoUD may also be used for Smart City projects.
National Level Monitoring
An Apex Committee (AC), headed by the Secretary, MoUD and comprising representatives of related Ministries and organisations Will approve the Proposals for Smart Cities Mission, monitor their progress and release funds. This Committee will meet periodically, as considered necessary. The AC will consist of the following indicative members:
- Secretary, Housing and Poverty Alleviation - Member
- Secretary (Expenditure) - Member
- Joint Secretary, Finance, MoUD - Member
- Director, NIUA - Member
- Chief Planner, Town and Country Planning - Member
- Select Principal Secretaries of States - Member
- Select CEOs of SPVs - Member
- Mission Director - Member Secretary
The Representatives of stakeholders like UN Habitat, World Bank, TERI, Centre for Development of Advanced Computing (C-DAC), Centre for Smart Cities (CSC), Bangalore or other bilateral and multilateral agencies and urban planning experts may be invited with the approval of the Chair.
The AC will provide overall guidance and play an advisory role to the Mission and its key responsibilities are given below.
- Review the list of the names of Cities sent by the State Governments after Stage 1.
- Review the proposals evaluated by a panel of experts after Stage 2.
- Approve the release of funds based on progress in implementation.
- Recommend mid-course correction in the implementation tools as and when required. 16
- Undertake quarterly review of activities of the scheme including budget, implementation and coordination with other missions/ schemes and activities of various ministries.
There will be a National Mission Director, not below the rank of Joint Secretary to Government of India who will be the overall in-charge of all activities related to the Mission. A Mission Directorate will take support from subject matter experts and such staff as considered necessary. The key responsibilities of the Mission Directorate are given below.
- Develop strategic blueprint and detailed implementation roadmap of the Smart Cities Mission, including the detailed design of the City Challenge.
- Coordinate across Centre, States, ULBs and external stakeholders in order to ensure that external agencies are efficiently used for preparation of SCP, DPRs, sharing of best practices, developing Smart Solution, etc.
- Oversee Capacity building and assisting in handholding of SPVs, State and ULBs. This includes developing and retaining a best practice repository (Model RFP documents, Draft DPRs, Financial models, land monetization ideas, best practices in SPV formation, use of financial instruments and risk mitigation techniques) and mechanism for knowledge sharing across States and ULBs (through publications, workshops, seminars).
State Level Monitoring
There shall be a State level High Powered Steering Committee (HPSC) chaired by the Chief Secretary, which would steer the Mission Programme in its entirety. The HPSC will have representatives of State Government departments. The Mayor and Municipal Commissioner of the ULB relating to the Smart City would be represented in the HPSC. There would also be a State Mission Director who will be an officer not below the rank of Secretary to the State Government, nominated by the State Government. The State Mission Director will function as the Member-Secretary of the State HPSC. The indicative composition of HPSC is given below:
- Principal Secretary, Finance,
- Principal Secretary, Planning,
- Principal Secretary/Director, Town & Country Planning Department, State/UT Governments,
- Representative of MoUD,
- Select CEO of SPV in the State,*
- Select Mayors and Municipal Commissioners /Chief Executive of the ULBs, and Heads of the concerned State Line Departments,
- Secretary/Engineer-in-Chief or equivalent, Public Health Engineering Department,
- Principal Secretary, Urban Development – Member Secretary.
The key responsibilities of the HPSC are given below.
- Provide guidance to the Mission and provide State level platform for exchange of ideas pertaining to development of Smart Cities.
- Oversee the process of first stage intra-State competition on the basis of Stage 1 criteria.
- Review the SCPs and send to the MoUD for participation in the Challenge
City Level Monitoring
A Smart City Advisory Forum will be established at the city level for all 100 Smart Cities to advise and enable collaboration among various stakeholders and will include the District Collector, MP, MLA, Mayor, CEO of SPV, local youths, technical experts, and at least one member from the area who is a,
- President / secretary representing registered Residents Welfare Association,
- Member of registered Tax Payers Association / Rate Payers Association,
- President / Secretary of slum level federation, and
- Members of a Non-Governmental Organization (NGO) or Mahila Mandali / Chamber of Commerce / Youth Associations.
The CEO of the SPV will be the convener of the Smart City Advisory Forum.