Essel eyes Bengal, Uttar Pradesh for smart city projects; group to sign definitive agreement for developing smart city in Madhya Pradesh

Essel group is betting big on the smart city project, a concept which chairman Subhash Chandra hit upon even before Narendra Modi's government unveiled in this year's budget.

After inking a Memorandum of Understanding in October with the Madhya Pradesh government to develop five such cities in the state and promising investments of close to Rs 7,500 crore, Essel Infraprojects has proposed similar projects in West Bengal and Uttar Pradesh and more will follow.

As for Madhya Pradesh, Essel would hopefully get into a definitive agreement within the next 6 to 8 months. "And, within two years after that, we would be able to showcase what we can achieve," said Chandra.

Essel is currently talking to various government bodies and a bidding process would then be initiated by the MP government. But since Essel came up with the idea first, the group would have the right to match the best offer, he said after the Kolkata edition of Dr Subhash Chandra Show.

Like MP, West Bengal and UP too are evaluating the proposal and making preparations.

"We have made an offer to the West Bengal government. The state government is now appointing a consultant to create a bid document for the project. Since the states are new to these concepts and ideas we have suggested that as an experiment give us any city with a population of more than 5 lakh -- the minimum size to make the project viable -- and once the experiment is successful, we can do more cities," Essel group head said during a media interaction.

The business model of the smart city is based upon revenue maximisation through better collection efficiency for various taxes and fees that the state government and local municipal bodies impose.
While the state would earn higher revenues resulting from efficient collection processes in the immediate future and through higher economic growth of a city resulting from improved infrastructure facilities in the long term, revenue sharing formula would sustain the business.

"Say, the revenue generation of a particular city is Rs 1 crore a month. And the government and the municipal bodies are spending Rs 2 crore. We are saying don't give us more money, just the money you are already spending. With the same money we would improve the quality of the city and generate more revenues from efficient management of taxation and other resource generation process," Chandra said.

While the concept of smart city caught fancy of the nation since it was announced, even drawing interest from US President Barack Obama, Essel Group sees itself better placed than others in taking up the opportunities.

"In developing smart cities, we are uniquely placed in the sense that we are managing power distribution in seven cities like in Nagpur, Muzzafarpur and also three cities in Madhya Pradesh; in Aurangabad we are managing the water supply fully. These utilities models have been worked out. These are complex workings and calculations. We will learn from these models and improvise accordingly," Chandra said.

In the media business, Zee group head said there is a target to reach 1.4 billion viewers by 2020 by reaching out to newer geographies across the globe.

"In the journey of 22 years of Zee, from a base of 8 million homes watching Zee TV, we have now almost 200 million homes or 928 million viewers in 170 countries. Next year we are going to launch content in Spanish and Portuguese languages in the Latin American countries."

"We have made an offer to the West Bengal government. The state government is now appointing a consultant to create a bid document for the project. Since the states are new to these concepts and ideas we have suggested that as an experiment give us any city with a population of more than 5 lakh -- the minimum size to make the project viable -- and once the experiment is successful, we can do more cities"

---Subhash Chandra