France to give €2 billion for smart cities

Tech companies from the US, Germany, Japan are already working on smart city initiatives

France has become the first country to make a financial commitment towards the National Democratic Alliance government’s ambitious ‘smart city’ project. Around €2 billion will be provided to convert Chandigarh, Nagpur and Puducherry into smart cities, ambassador of France in India Francois Richier announced on Wednesday. While other countries, including the US, Japan, Spain, Germany, Netherlands and Singapore have entered into partnerships and have chosen their preferred cities to invest in, no figure was mentioned earlier, experts working in the area pointed out.

That does not, however, mean that France would be bound by this commitment, said a source. “It shows the serious intent in being a part of the smart city project,’’ he added. Also, the proposed investment would primarily come from French companies, which perhaps already have significant exposure in India, with the government backing them.

Estimates suggest that building a new smart city with one-million population would cost around Rs 20,000 crore a year for the next 10-15 years, while building on existing cities would be cheaper depending on the nature of retrofitting work required. The Centre had decided to spend Rs 50,000 crore and the remaining was expected to come from states and private entities.

“This is the collective value that French companies could spend in India,’’ Pratap Padode, founder, Smart City Council (India), told Business Standard. The French government could get involved as well in hand-holding cities for master plans, he said. Technology companies from other countries including the US, Germany, and Japan are already working on smart city initiatives, Padode added.

Among others, the US had earlier said it would partner Ajmer, Allahabad and Vishakapatnam, while Singapore took up Amaravati, the new capital of Andhra Pradesh, and Japan chose Varanasi for the smart city project.

As the deadline of December 15 for selecting the first 20 cities for the project draws closer, funding issues are coming into focus. “The next two months will be an intellectual exercise, and then will come the interesting phase where investment will have to be tied up. One has to see then who will fund how much,’’ a consultant working closely with the project said.

Commenting on the €2-billion announcement, Karuna Gopal, president of the Foundation for Futuristic Cities, said: “France has fantastic prospects in India. It has the advantage of a combination of technological superiority of French companies and their proven track record in India.”

At Wednesday’s event, jointly organised by business chamber Ficci, Embassy of France and the urban development ministry, Arbind Prasad, director-general of Ficci, said: “France is a strategic partner for bilateral trade and economic relations for India. Besides other sectors of interest, India and France have identified areas like urban planning, smart cities, transportation, heritage cities, green energy, waste and water management to enhance bilateral cooperation and engagement and seek French partnership and expertise in smart cities and heritage cities in India.”

The global opportunity for smart cities by 2020 is $1.7 trillion, according to estimates. In India, the smart city segment could mean an opportunity of $50 billion.