Smart City SPVs to Continue Crucial Role in Urban Development, says MoHUA

GG News Bureau
New Delhi, 10th June: Building on the success of the Smart Cities Mission, the Ministry of Housing and Urban Affairs (MoHUA) has issued a key advisory outlining a stronger, ongoing role for Smart City Special Purpose Vehicles (SPVs) in India’s urban transformation. This move acknowledges the strong institutional framework and capabilities developed across the 100 Smart Cities since the Mission began in 2015.

The Smart Cities Mission (SCM), launched in 2015, fundamentally changed urban development by promoting local innovation and integrated infrastructure. A core element was creating SPVs in all 100 chosen cities under the Companies Act, 2013, with a 50:50 ownership split between State/UT governments and local urban bodies. These SPVs were specifically tasked with planning, developing, and executing mission projects.

A Decade of Delivering Complex Projects

Over the past ten years, these SPVs have proven their ability to quickly deliver complex, multi-sector projects. As of March 2025, over 93% of the SCM’s 8,000+ projects are complete, with the Government of India having released nearly 99.44% of the Mission’s total budget of ₹48,000 crore. Through this process, SPVs have built strong internal capacity to manage large urban projects on tight schedules, while also helping to create a skilled urban management workforce within government systems.

ICCCs: The Nerve Centers of Urban Management

Beyond the SPVs, the Integrated Command and Control Centres (ICCCs) set up in all 100 cities have become the operational hubs for urban management. They enable data-driven governance and real-time decision-making. Using advanced technology, these centers have significantly improved various urban areas, including traffic control, crowd management during big events, public safety, disaster response, and waste management. States are now encouraged to maximize these infrastructures by integrating more city-level services and ensuring timely upgrades.

Ensuring Continued Contribution Beyond 2025

Recognizing the substantial investments in SPVs and ICCCs, and their growing importance in helping Urban Local Bodies (ULBs) tackle complex urban challenges, the Government of India believes these entities should continue operating beyond the Smart Cities Mission’s completion date of March 31, 2025. To facilitate this, MoHUA has released Advisory No. 27, which details the future role of SPVs and a roadmap for ICCCs.

The advisory proposes a dual approach: first, completing any remaining Mission responsibilities, and second, defining the future path for SPVs. Initially, all SPVs must ensure timely completion of their current SCM projects and prepare detailed operation and maintenance (O&M) plans for the new assets they’ve created.

Five Key Domains for Future Engagement

Looking forward, the advisory highlights the government’s strong belief that the institutional and technical capabilities built within SPVs should be repurposed to meet new urban challenges. To support this shift, the advisory offers a clear vision for transforming SPVs into agile, multi-functional institutions aligned with evolving city and state priorities. States and Union Territories, through their High-Powered Steering Committees (HPSCs), are encouraged to identify urban sector priorities where SPVs can continue to play a strategic role. The advisory outlines five broad areas for their future involvement:

• Technology Support: SPVs can help ULBs with cybersecurity, data analytics, and managing data systems. ICCCs should be leveraged as city operating systems and state analytical hubs, with urban development departments preferably maintaining operational control. SPVs could earn service-linked revenues for managing ICCC functions.
• Project Implementation: SPVs can serve as agencies to implement Central and State schemes, developing a pipeline of viable projects. They may charge a project implementation fee, typically between 1.5%–3%, as per state procurement rules.
• Consulting Support: Drawing on their experience, SPVs can provide advisory support to ULBs and state departments across various urban sectors.
• Research and Assessment: SPVs can support evidence-based planning through assessments, logistical support, and coordination. They could also act as incubation hubs for urban technology startups.
• Investment Facilitation: SPVs are well-placed to drive city-level economic development by helping with project structuring, procurement, and coordinating with different government tiers.

State Governments are urged to create policies that allow SPVs to charge a ‘Centage’ (fee) from the State/UT for planning, designing, developing, and implementing Central/State government projects. This will ensure the financial sustainability and operational autonomy of the SPVs.

Ultimately, MoHUA has called upon States and UTs to proactively integrate SPVs and ICCCs into their long-term governance frameworks, ensuring that the benefits gained under the Smart Cities Mission continue to serve urban India.