Public-Private Partnership The model is for higher risk project such as waste to energy or greywater treatment plant with partnership from the private sector, as a design, built and maintenance scheme, where certain commitment and guarantees are in place. Non-fiscal incentives to encourage execution by private sectors Non- fiscal incentives are those benefits that are simply “non-monetary” value but indirect gain by the private sector. The incentive is one of the easiest and possible methods to implement smart cities projects in cities by councils or municipalities. In this scheme, cities can explore giving incentive to private developers to include smart city component in their township and in return, they are given an increase of density or plot ratio. Other possibilities will be the reduction of development charges in return for physical projects in the township such as the installation of solar panels at public amenities with energy management tools.
In addressing funding, cities may explore several funding options as follows: Own funding This should be the best option, but cities need to understand 3 key items to ensure the project can be sustained in the long run. First, Intellectual property (IP) ownership if the project is an innovation, yearly recurring fees for licensing and funding for project maintenance. All items should be addressed in the procurement process. International grants There are many international grants in support of sustainability and smart city agendas. United Nation programs and ASEAN Smart City Network programs provide country to country funding. The key success factor is to have ready projects for submission and robust networking among cities and international organisation. Demonstration or pilot projects A Demonstration Project is small-scale capital investment or technical assistance project to "demonstrate" a particular approach. Many solution providers are willing to do this as part of their marketing and branding. Demonstration or pilot projects can be non-committal to the cities but enable a learning experience. Revenue sharing between PBTs and vendors In this cost cost-sharing scheme, the solution provider provides the system and application and cities role is to promote the system and payment to the solution provider is taken from the consumer as per usage, similar to the concept of Grab and FoodPanda and potential projects can include smart parking and other e-payment related apps. Differed payment from savings Differed payment scheme is a financial arrangement with a third-party solution provider that owns, operates, and maintains the project and a host customer like councils or business premises agrees to site the system or component on its property. Solution providers may offer a NO upfront cost where projects are self-funded from saving incurred before and after project implementation, and example of such projects is Solar photovoltaic (PV) system and LED lightings.
In conclusion, although it seems there are many barriers to the implementation of smart cities, the benefit to the cities and smart city players are exponential. The benefit among others shall include better city management through joint enforcement at focus and targeted areas, enhance resource management, wise business decision through insights, and automated information for city and building maintenance. Cities need to fully understand their needs and current capability, range of financing options and procurement methods as implementing Smart city projects are not the same as ‘constructing a bridge’. Smart Cities should prioritize the solutions that help them the most in improving environmental sustainability with direct impact in reducing cities’ carbon emission levels and improving citizens quality of life.
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MSCA 2022
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