The Future of Smart City SPVs: Evolve, Repurpose, or Dissolve?

With the Smart city program coming to a close on March 31st, there is a lot of speculation on what will happen to the SPVs now. The staff in the SPVs are being downsized or they are resigning. There were 100 smart cities and therefore, and the requirement was to set up an SPV in each city to plan, approve, release funds, implement, manage and monitor the smart city projects. Having an SPV helped cordon off the funds and the assets from the municipal balance sheet and made it possible to bring in people and technology for implementation.

Now that the smart city program is coming to an end, there is a question mark on their continuity. The best way is to use the SPV for future projects. Panaji Smart city Development Ltd will now execute the CITIIS 2.0 program. This program is supported by the central government and the European Union and is focused on integrated waste management projects and promoting a circular economy.

Another use case is that the SPV raises municipal bonds for infrastructure assets it can manage, such as a city's sports complexes. Revenue from these assets will take care of the repayment of the bonds. The SPV can also be used for PPP- in this case, for the sports assets to be owned partially by the private companies that will co-manage it and bring in the required funding for the modernisation of the asset.

With the Smart City Mission officially closing, the fate of 100 Smart City SPVs remains uncertain. However, these SPVs don't need to become redundant-they can be repurposed as financial and operational engines for future urban infrastructure projects. What do you think-should Smart City SPVs transition into permanent urban infrastructure agencies?