(As prepared)
Thank you Ajay, Banmali, Mr. Kant, all of the impressive speakers from this morning’s panel, and all of you from the American Chamber of Commerce. It is truly an honor to be part of your Annual General Meeting once again.
We work with AmChams all over the world; they are among our closest partners on arguably our most important issues globally – trade, investment, development, commerce, job creation, innovation, globalization, the list goes on.
I am incredibly impressed with the American Chamber of Commerce in India and grateful for the partnership we have – your dedication to your members and their issues is exemplary and your capabilities and willingness to collaborate are invaluable.
Scene Setting: Global Urban Trends and Indian Smart Cities Mandate
TOPIC OF THE DAY: Smart Infrastructure and Ecosystems for Sustainable Growth.
- We all know the compelling statistics related to urbanization trends and the pressures being placed on our cities to accommodate a steady influx of people seeking opportunities for advancement and a better life for themselves and their families.
- Trends are stark: In 1950, only 30 per cent of the world’s population was urban. Today, that number is just over 50%. By 2050, it’s projected to be 66 per cent – that’s two thirds of the world’s population projected to be urban.
- According to the United Nations Development Program, 90 per cent of the growth of cities between now and then will be concentrated in Asia and Africa, with India and China leading the way in Asia.
As the world continues to urbanize, sustainable development challenges will be increasingly concentrated in cities – challenges that will require coordinated planning and investment to effectively address.
Important because cities are and have been global engines of economic growth.
- Though cities account for only 2% of global land, they are responsible for around 80% of gross domestic product.
- Also responsible for around 70% of the world’s energy use and roughly the same percentage of greenhouse gas emissions.
City planners, administrators, and engineers the world over have recognized that old models of urban growth have reached a tipping point.
Stressed infrastructure and environmental degradation necessitate a change in the way we approach expansion.
We are seeing smart city models and components being adopted now in places as diverse as Rio de Janeiro, Barcelona, Nairobi, and Bandung (Indonesia).
As we look to manage urban development and respond to economic and environmental challenges in a structured way, combined market potential for smart infrastructure in segments of energy, transportation, healthcare, and governance is enormous: upwards of $1.5 trillion dollars over the next 5 years according to a recent industry study.
India is, and will continue to be, a big part of this equation.
- India’s urban population expanding at a faster rate than at any time in history, from 340 million in 2008 to nearly 590 million projected by 2030.
- Have said this before, but it’s no less compelling: India needs to construct a new Chicago every year for the next 15 years; a daunting requirement by any measure.
- Importance of ‘getting it right’ has been recognized by the Prime Minister, as reflected in flurry of discussions, planning, and activity that all of us have been part of over the last 18 months on the government’s Smart Cities Program.
- India’s states and cities are starting to take the lead on finding ways to improve energy, sanitation, water, and transportation infrastructure.
Cities in the United States face similar challenges and have become hubs of innovation by deploying integrated resource management plans such as those found in Chicago, Los Angeles, Boston and New York.
Like India, U.S. is also considering ways to leverage infrastructure development as a tool for inclusive growth. There is certainly a lot we can learn from each other moving forward.
Important role of American Chamber in India
The American Chamber of Commerce – and by extension many of you – have already played an active role in smart city discussions and activities here in Delhi and around the country at the state and city level.
The formation about a year ago of the Infrastructure Capability Deck – a directory of AmCham members with proven capabilities in developing and implementing smart city solutions around the world – was a real milestone in helping to get the United States out in front of this priority initiative.
There are over two dozen members of the Capability Deck so forgive me for not mentioning all of them by name, but companies such as IBM, KPMG, AECOM, CH2MHill, Cisco, Honeywell, 3M, First Solar, UTC and GE have banded together to lead U.S. private sector engagements with counterparts from India’s public and private sectors, helping to take the discussion from definitional (“what is a smart city?”) to strategic (“how do we define priorities and chart a course to implementation?”).
In that sense, I truly feel that we are “on track” and have meaningfully contributed to the evolution of the smart city dialogue in India over the past year and a half.
We have maintained from the start that the public sector would play a prominent role in creating the framework for smart city growth in India, but the private sector would have to drive the program
- you are the ones with the tools and experience to transform urban plans into smart city realities.
To date, American Chamber of Commerce has led U.S. company engagements with Chief Ministers, Chief and Principal Secretaries, Municipal Commissioners, District Magistrates and Urban Local Bodies in our three designated “U.S. smart cities” (Vizag, Ajmer, and Allahabad)
At same time, Chamber has taken it upon itself to structure productive engagements in Mumbai, Jaipur, Hyderabad, Chennai, and with officials from Kolkata and Raipur – all places where you have identified business potential or opportunities in the sector.
I encourage you to continue to dedicate thought, effort, and resources to these kinds of engagements.
We at the Embassy will continue to follow your lead and leverage our collective influence to ensure that you have the access and open doors you need to define project parameters, identify appropriate financing mechanisms, engage local stakeholders, and bring your smart technologies and services to market to benefit communities across India.
Bilateral Engagement
On G2G level: smart cities one of only 4 pillars defining bilateral commercial prioirities under S&CD.
- Part of Infrastructure Work Stream
- Focus of USG/DOC and GOI/MOUD
At same time, infra bottlenecks/urban governance challenges have economy-wide implications for other 3 S&CD work streams:
- ease of doing business
- innovation
- standards.
We are therefore taking whole-of-government approach re: smart cities and sustainable urban infra development.
Key deliverable from Obama Republic Day visit last and last S&CD was Smart City business development mission to India, led by the Deputy U.S. Secretary of Commerce.
- Mission happened few months ago – February
- Included 40 executives from 18 companies
- Led by Deputy Secretary Bruce Andrews
- Started in Delhi and went to Mumbai, Chennai, + spin-off visit to Vizag with USTDA Director Zak (where met with CM Naidu).
AmCham played big role in making TM a success
- Hosted industry roundtables in several cities
- DepSec Andrews was impressed with leadership role of AmCham in Infra/SC programs.
As quick aside, I participated in Vizag spin-off
- witnessed signing of TDA’s grant for master planning along with CM Naidu.
- grant will enable Vizag to become more efficient, sustainable, and smart in its growth through interconnected infrastructure, communications, and intelligent data systems.
- AECOM, IBM and KPMG, have already begun the work.
While there – fortunate enough to tour through Vizag and visit port, and speak with students and faculty at GITAM University. Wholly impressed with the city and enormous potential to incubate, pilot, implement, and scale-up smart city solutions across sectors. Natural beauty with the hills, beaches, and green spaces – PLUS passion and motivation of citizens and administrators to push forward with structural improvementsResilience and recovery since Hud Hud was striking.
Accomplishments to Date
Would like to take stock of where we now stand with SC activities.Aside from completing the TM, have also recently completed a Reverse Trade Mission to the U.S. for 14 officials from Vizag, the state of Andhra Pradesh, and the Ministry of Urban Development.
- trip was sponsored and led by the USTDA
- took the group to DC, New York, and San Francisco for meetings, site visits, and networking events with city administrators, municipal authorities, and private companies engaged in smart city solutions.
TDA now planning an RTM for Ajmer and Allahabad, in line with commitments in MOUs signed with Rajasthan and UP last year.
TDA also contracted a technical advisory team to present case studies and discuss best practices in those cities based on global experiences, and help identify priority areas for Smart Cities development in key sectors like solid waste management, intelligent transportation, water/wastewater management, and e-governance.
State Department’s Public Diplomacy Program has funded consortium of experts led by the Institute for Sustainable Communities to work with administrators/planners in all three cities
- Focus on capacity building and enhancing capabilities at local level.
- brings expertise in water systems, air quality, traffic management, and urban planning.
- interactions on the ground with government and university officials facilitate not information exchanges AND people-to-people connections – essential for driving programs forward.
USAID has partnered with GOI on disaster preparedness, response, and resilience at the municipal and city level.
Working to develop Hazard Risk and Vulnerability Assessments, train municipal administrators in disaster management, and strengthen early warning systems to enhance disaster preparedness.
As a result, municipalities will be better able to integrate climate risk reduction measures into their long-term development plans for smarter and more resilient cities.
- USAID is also working under an MOU with the Ministry of Urban Development to support the Swachh Bharat to provide broad spectrum of technical support to Vizag for model sanitation system.
U.S. Department of Transportation seeking to engage on transportation elements of Smart Cities and other aspects of urban transportation planning such as multi-modal planning, intelligent transportation systems, road safety, and last mile connectivity.
Road Forward
Turning to road ahead, center government is now capitalizing Smart City program with funds through its challenge competition
- Has mandated that cities establish Special Purpose Vehicles for project management and implementation,
- everyone is anxious for clarity on ‘big picture’ financing issues and how they will be addressed.
Financing smart city projects is critical challenge for governments and companies – we’ve heard this from you and from partners at CII and FICCI for a while now.
- Tangible pathways for funding are a high-priority component for both industry and government stakeholders
- we understand the urgency in addressing this as winning cities continue to be announced and seed capital starts to flow to the states.
- There is movement with grant funding from the center, which is very encouraging
- But we see continued challenges with granular solutions at the city and state level, where incentives to attract and leverage private capital are still lacking.
For our part, will continue whole-of-government dialogue through interagency partners (EXIM Bank, Treasury, Commerce, State, OPIC, TDA) on innovative financing solutions,
Will also rely on industry to continue to inform that dialogue:
- what works for our companies?
- What has worked in corollary markets?
- What are viable options for those invested in India?
Tell us if we need course correction or are leaving any stone unturned.
Investment Initiative between the US Treasury Department and Ministry of Finance is actively engaged in deepening capital markets. What else can or should we be doing?
Also cannot overstate how paramount the role of coordinating bodies like AmCham will be in making progress both in Delhi with MOUD and on the ground in India’s smart cities over the course of the coming year.
- would only encourage Chamber to continue outreach initiatives, explore opportunities for member companies, apply collective experience and wisdom from US company successes around the world, and inform government-to-government discussions at the highest levels.
- Going back to what I said at the outset: the public sector can create a framework for smart city growth in India, but the private sector will and should drive the program forward with projects and implementation.
Rest assured, topic will remain core pillar of our bilateral S&CD.
We see tremendous opportunities for smart cities as means of driving economic growth, addressing infrastructure bottlenecks, growing trade, and raising the quality of life for India’s citizens.
I look forward to continuing to support all of you and the good work you are doing in this regard.
Thank you for inviting me to share my views today and for the opportunity to participate in this prestigious event.
