Process to develop Belagavi, Davangere Smart Cities begins

State govt working on special purpose vehicle model for implementing project

Process to develop Belagavi, Davangere Smart Cities begins
The State government has begun the process of creating separate companies to develop Belagavi and Davangere under the Smart Cities Mission. On January 29, Union Cabinet Secretary Pradeep Kumar Sinha, through videoconferencing, explained the special purpose vehicle (SPV) model to state Principal Secretary (Urban Development) T K Anil Kumar.

The two cities have been included in the first list of 20 announced on January 28 by Union Urban Development Minister M Venkaiah Naidu. The state had submitted a list of six cities. (see box)

“There are different models and the SPV is one of them. We are getting it vetted and will have clarity by this weekend,’’ Anil Kumar told Deccan Herald. 

“We are working on the articles of association. Later it will be placed before the Cabinet for final approval,’’ he said.

Independence, autonomy
The Union Ministry of Urban Development (MoUD), in its guidelines on SPV, pointed out that the primary reason for creating an SPV is to ensure operational independence and autonomy in decision-making and mission implementation of Smart Cities.

The SPV will be a company with a board of directors from the State government, MoUD and independent directors. 

The State Chief Secretary is likely to be the chairman with Principal Secretary (UDD) as its member secretary.

The managing director or the chief executive officer (CEO) will manage day-to-day affairs of implementing and monitoring Smart City projects.

The name of the managing director/chief executive officer has to be cleared by the Union Ministry of Urban Development and he/she will work independently and have a three-year tenure, the guidelines said.

Asked whether the SPV will function as a company set up under the Companies Act, Kumar said: “That’s what is being discussed and so I can’t comment.’’ The Centre is likely to release the first round of funds by March-end. Once the State releases the matching grant, works will begin.
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