Smart City SPV: PSUs, Cial may take stake in project

Fri, 2016-02-05 11:12 -- SCC India Staff

In an effort to provide expertise and financial support for the Smart City project, the Kochi corporation is planning to make Kochi Refinery, Kochi Metro Rail Ltd (KMRL), Cochin Shipyard and Cochin International Airport Ltd (CIAL), etc. the stakeholders of the special purpose vehicle (SPV) to be formed for implementing the project.

As per guidelines issued by the Union government, independent agencies can also be made stakeholders of the project.

The Union and state governments should have at least 30% share each in the SPV.

"The remaining shares can be given to independent agencies. Given the fact that the Kochi corporation cannot bear the huge financial burden to implement the project, the civic body has decided to take the public-private-partnership route or avail CSR funds from public sector undertakings and other firms," sources said.

"Once these firms are roped in, it will certainly benefit us while implementing the Smart City project. All these firms have CSR funds. They have a pool of experts in many fields which can be utilised for Smart City. Moreover, all these firms have 'Kochi' in their names," sources said.

According to corporation authorities, the suggestions would be placed before the state government.

"The state government has to take the initiative to float the SPV. Once these firms are given stake in the SPV, it will benefit Kochi in many ways," said deputy mayor T J Vinod, Kochi corporation.
Corporation authorities will have to talk to these agencies before they can decide on the final shape of the Smart City SPV. Each firm can be allotted a maximum of 10% share each.

Some of the projects, planned by KMRL, had made it to the concept plan of Smart City, which helped Kochi finish fifth among 20 cities selected for the first phase of the project.

"Ferry services, connecting Fort Kochi and Mattancherry with Ernakulam, is one of the major components in the Smart City plan. The ferry service would be undertaken as part of the water transport project of KMRL. The walkway project, connecting Maharaja's College Ground station and Ernakulam boat jetty, is another project by KMRL that figures in the concept plan. So, KMRL is already associated with the Smart City project," sources said.

"The proposed smart card for all modes of transport designed by KMRL won acclaim when the concept plan of Smart City was presented before the Union government," he said.
Officials associated with the project said that the process of floating an SPV would start soon.

As per guidelines issued by the Union government, the state government would appoint the chief executive officer (CEO) of the project. But, the guidelines keep mum on who should be chairman of the SPV. As of now, the representation of Kochi corporation in the director board will be minimal.

Source: The Times of India