M Venkaiah Naidu, Union Urban Development Minister
New Delhi: Private sector investments will play a key role in financing and building the 100 smart cities that the government is planning, urban development minister Venkaiah Naidu said at the second annual ET Infra Focus Summit in New Delhi.
"I want to make it clear today that the key to building smart cities is private investments. That is how private sector can drive economic growth by investing in urban projects," he said.
The other means of resource mobilisation could be through multi-lateral and bilateral development agencies, municipal bonds, pooled municipal debt obligation facility, real estate investment trusts and infrastructure investment trusts.
The minister said that a high-powered committee set up by his ministry has reported that Rs 7.5 trillion would be needed over 20 years to improve infrastructure relating to transport, water supply, sewage and sanitation in the selected cities.
For just the preparation of detailed project reports and mandatory city development plans for 100 smart cities, state governments will have to spend Rs 5,000 crore, he said. A part of that will be financed by the Centre. The selection of smart cities has been left to the states.
"Given the inadequacies of our urban local bodies, we propose to spend 5% central government assistance on capacity building of urban local bodies," he said.