The Indian government’s recent announcement of 98 proposed Smart Cities has hastened the need to define the concept and help these cities attract a large quantum of foreign investment that will lead to economic prosperity. As policymakers, think tanks and infrastructure companies focus on the various components needed to build these cities, the investors’ point of view must constantly be kept in mind. Are Smart Cities a safe investment?
Even though India is a compelling investment destination on account of wage arbitrage, foreign investment will flow only after a Smart City passes a rigorous risk and safety risk assessment for the investment over a period of time. Unlike FIIs that have the option of exiting their capital at short notice, FDI requires greater assurances of safety before investment flows but, more importantly, during the entire term of the investment life cycle.
Strategically, India is a relatively safe destination in terms of country risk although there is growing instability in the region. When it comes to new investments in a difficult economic climate, investors are seeking to ensure the security of basic infrastructure like power and water supply, increasingly extending the umbrella of physical security to employees as well as ancillaries that supply them with vital resources. With vital back-office operations connected to global customers and processes, multinationals are constantly upgrading security based upon changing threats. Smart Cities will require world-class security to attract investment and provide India an opportunity to revise this risk perception by providing elements of safety that mitigate risk.
Public safety involves two primary facets: emergency management and law enforcement. Our current structure and processes need an infusion of global best practices, which will only come if global security players see an opportunity to actively participate in this transformational initiative. There is a strong opportunity for public-private partnership in building world-class standards in monitoring and law enforcement. Are Smart Cities ready to prevent threats to facilities? Are the police and fire departments well equipped? Have commercial complexes conducted security audits? We are not ready, currently, nor have we created a path to readiness.
If we look at the world’s safest cities, a common element runs across them all – the active participation of private players in supplying, managing and securing vital elements of private and public infrastructure. The private security sector is compelled to competitively provide cutting-edge technology to city administrators, which, in turn, can improve citizens’ security. Such an atmosphere of trust promotes both investment and compliance. In the UK, a private company manages access control of vital government buildings and even defence establishments. Thousands of cameras clearly visible across the developed world are supplied, maintained and monitored by private companies. Stakeholders in Indian urban development simply need to look at global examples to gauge the depth of trust that public and private players have developed over time.
The Indian government has made enormous strides in the defence sector, where it has relaxed FDI norms beyond the traditional 49 percent to promote transfer of technology. Today, citizens face a much greater threat from daily security issues than from conventional warfare. The nature of war itself has changed and our policies must also change to reflect that. Currently, security technology remains stationed firmly outside India due to policy restrictions that are a disincentive to foreign investment, let alone active PPPs.
Provision of security begins at the city planning stage – which is now, in the case of Smart Cities. ‘Crime Prevention through Environmental Design’ (CPTED) improves quality of life by promoting surveillance and safe neighbourhoods. The use of CPTED during the early planning stage results in long-term savings via reduced crime, lower maintenance costs and greater operational efficiency. City surveillance, on the other hand, helps prevent insecurity in urban areas arising from disasters, terrorism, organised crimes, thefts, burglaries, crimes against women and drug trafficking, to name a few.
The significance of integrating security preparedness at the level of town-planning was highlighted by the Oklahoma City bombing, where the bomber admitted to selecting the target building on the basis of architectural vulnerability. As we build our Smart Cities, we must make our buildings more resistant to attacks of this nature. Most structures in Indian cities are currently unprepared for such threats and the lack of professional expertise in sanitising them make them vulnerable to such manmade risks.
In the end, foreign investors and the government have a common objective – to develop strong and sustainable islands of excellence that are also safe and viable investments. The primary assurance has to be in the form of top-notch security – throughout the infrastructure framework of a Smart City – that is based upon technology and quick response. In the end, only a Safe City can be a Smart City.
