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Sriram Viswanathan, Vice President, Fluentgrid Ltd

25 Apr 2018

Abolish L1 tender system in Smart City projects

Smart City projects are being undertaken in India for the first time under the Modi government. With little experience to fall back on, challenges begin right from the stage of bidding. The lowest price (L1) model widely followed in India is not necessarily suited for Smart City projects which are long-term investments and need robust technology. Hyderabad-based Fluentgrid, a system integrator and technology supplier, was part of the consortium that developed the Visakhapatnam Smart City project. In an interview to Infraline Plus, Sriram Viswanathan, Vice President, Fluentgrid shares his insights into Smart City projects. Excerpts:

How is progress in Smart Cities Mission?

Progress has been slow, not at the expected speed, frankly speaking. It still has several loose ends to be tied up and tightened in some areas. But we are proud that we are part of the team that has been instrumental in seeing through India’s first smart city command-and-control system (Visakahapatnam), the core part of the project. We have successfully installed it. Everything went off fine. The project was completed on time. It has become a benchmark for how to successfully complete a smart city project on time. Chief Minister Chandrababu Naidu came and inaugurated the project on February 27.

Did you face any big challenge in implementing the project?

See, basically, our challenges were less because we are one of India’s few homegrown companies. We understand the eco-system in India much better than foreign players. Our ability to localise and interact with SPV is our domain expertise, core competency that helped us circumvent various challenges which, otherwise, would have been formidable to other players.

Has any smart city project faced financial constraints?

In Smart Cities Mission, there are no clear, standard RFP (Request for Proposal) norms in terms of budgeting. For example, Belgaum came forward with straightforward lowest price (L1) tender instead of Quality-cum- Cost-based selection system (QCBS) bidding – which has an analysis of quality and cost ratio.

In smart city projects, which are complex by nature and technology’s role is critical for success of the project, L1 bidding should be abolished. These are all long shelf-life items and projects where technology selection should take precedence over costs. If you go for cheap items and technology, problems could appear prematurely after implementation that would be have to rectified and add to expenditure, wiping out whatever savings may have made through use of doubtful technology.

How sustainable are Smart City projects?

Developing sustainability in smart city projects is a question that has not yet been answered. You have to service your loans, service operational and maintenance costs. What model is to be adopted for this is not clear. This problem will come up in all smart city projects as there is no clarity about what should be the sustainability model.

What is significance of Smart Energy in Smart City projects?

It is huge. The Indian system of managing energy is a matter between the centre and state. Even if end user is the citizen, city-based administration has hardly any control over electricity supply except for places like Chandigarh and New Delhi. Municipalities are responsible for water distribution, not for electricity supply. If a citizen has a grievance, he or should come to the municipality. Over a period of time, unless and until, state discom, municipalities as well as central power ministry come together and build mechanism of cooperation between each other, the efficiency levels of optimizing smart energy plans through Smart City programmes will fail.

What are the other Smart City projects that you are looking for?

Since we are a system integrator and technology supplier, all our prospective projects are in partnership with others like L&T and Honeywell. We are looking at Lucknow, Kanpur, Meerut and Gurgaon. We are also looking at New Delhi Municipal Corporation.

Is Fluentgrid handling projects in other sectors as well?

Apart from Smart City projects, we also handle smart grid projects. We have got smart grid projects in states like Assam, Himachal and Gujarat.