What does the smart cities space look like for 2021 and beyond in India and globally in the aftermath of the COVID-19 pandemic?

The year 2020 has been transformational for Quantela, as it has been for governments, businesses, cities and citizens the world over. While we have seen digital transformation accelerate across sectors like education, health and remote working, cities that harnessed the power of connected technologies to achieve the twin objectives of controlling the spread of the pandemic as well as bringing about economic resilience too have leapfrogged in their digital adoption journey.

There is a huge opportunity we see in bridging the digital divide that has been caused by the pandemic by helping city administrators set up more Wi-Fi hotspots to bring about socio-economic equity. Digital kiosks and signage too present an interesting monetization opportunity for cities. Innovative thinking in terms of financing such projects is the need of the hour.

Improving public safety, environmental sustainability – be it controlling air and water pollution as well as waste management and digital access of citizen services would be, in our assessment, the focal areas for cities going forward.

We see cities increasingly invest in digital assets for better response to the health crisis and also look at data management in a whole new light. Smart cities at their core, use technology to better the lives of citizens and having witnessed usage of technology in aiding decision making through pandemic we could see some movement of investments from another use case to health and well-being but other than that the growth story in smart cities is intact.

During the pandemic, how did Quantela help cities to mitigate the pandemic? What were the key learnings and experiences for Quantela as a smart city enabler?

We launched our Coronavirus Emergency Response (CoVER) platform by repurposing our existing Quantela Smart City decision-making platform in March 2020 to arm the government, city administrators and public health officials with data insights to monitor, predict and respond to the pandemic in a proactive and coordinated manner.

When the Ministry of Housing and Urban Affairs (MoHUA) took the decision to use command and control centres in 45 cities as the hub to manage India’s COVID response, Quantela deployed CoVER to set up a model COVID war room for Bruhat Bengaluru Mahanagara Palike (BBMP) in Bengaluru.

We worked with City of Sioux falls in the US, municipal corporations like MCGM, state governments such as the Government of Assam in India in building solutions that would last beyond the pandemic and address systemic challenges in healthcare.

Using CoVER, Quantela helped administrators in 6 States and 20 cities in India with a population of 402 million in identifying COVID hotspots and predicting the next one's basis caseloads and tracked over 0.5 million quarantined citizens. In terms of capacity management, we helped over 526 hospitals with capacity management to predict hospital infrastructure requirements such as beds, ventilators, medical supplies and PPE kits to keep pace with the rise in the number of cases. Nearly 3000 ambulances were tracked, and 0.3 million helpline calls were facilitated.

The biggest learning has been that when multiple agencies in a city share data; efficiency is ensured. When technology facilitates a connection between citizens and the government, a lot can be achieved.

With COVID-19 affecting budgets of governments and cities the world over, how optimistic are you about cities having the financial wherewithal to fund their infrastructure digitization?

As stated earlier, innovative thinking is the need of the hour for funding such projects in the post COVID world. Despite stimulus packages announced by federal governments, many cities will not be able to make up for the revenue shortfall experienced during the multiple lockdowns last year.

In the US, the operational budgets of 124 cities are estimated to decline by $167 billion in 2021 due to COVID according to a survey conducted by the US Conference of Mayors in September 2020. What was heartening is that 60% mayors had shown interest in accelerating the implementation of smart technologies to respond to the pandemic and advance safe workplaces while 63% prioritizing the expansion online city services. Though municipal bonds seem to have gained traction in recent times as a preferred source of funds, the rate of nominal economic growth should be ideally higher than the average rate of interest offered on the bond for the debt to be sustainable.

With less money and more scrutiny on the allocation of infrastructure digitization spends, there is a need for financial and technology solutions with a clear return on investment focus – both from a monetary as well as socioeconomic and environmental impact standpoint. 

Quantela has rolled out a unique ‘Technology-Based Outcomes financing’ model along with investment firm Digital Alpha to help cities overcome budgetary constraints and fund urban digitization projects for making them resilient.

How this funding model work and what does is it that makes it unique?

This model is a play on the typical PPP structure but for technological outcomes. The funding model changes the payment terms for the city from a CAPEX heavy mode to outcomes or results-driven OPEX based payments. This means that Quantela assumes nearly 100% of the project risk with the CAPEX investment from cities restricted to not more than 10% of the digitization project cost, thereby improving their cash flow.

What makes the model unique is that the Quantela works with the city and ensures the solution implemented have real valuable measurable benefits and creates a long term viable solutions for both city as well as Quantela; thereby improving the city’s efficiency in seamlessly delivering citizen services.

With cities in India such as Lucknow, Ghaziabad, Prayagraj, Kanpur, Varanasi, Pune and Ahmedabad raising or planning to raise funds via the municipal bond route, where does Quantela’s financing model stand amidst the alternative fund-raising sources?

The COVID-induced lockdowns across the world saw traditional sources of funds for urban local bodies (ULBs) – be it through land-based levies, entertainment tax, advertisement fees or stamp duty dry up. Non-traditional sources of fundraising such as grants, multilateral debt and crowdsourcing were not possible as federal governments, businesses and individuals were also cash strapped.

While municipal bonds do present themselves as long term financing instruments. However, for the debt to be sustainable, the rate of nominal economic growth should be ideally higher than the average rate of interest. Moreover, it calls for greater accountability through periodic reporting for credit rating purposes – something which most cities may not have prior experience in.

Quantela’s model is focused on building sustainable revenues for cities where the user fees or savings can be substantial and be self-serving. We also focus on newer uses cases that so far have not been tapped or offer significant value growth through digital transformation. Municipal Bonds and our model can coexist with different value propositions to the city.

For cities and communities to become smarter, data analytics gains greater significance. How has Quantela been using data to deliver desired outcomes for city administrators?

Quantela’s platforms have an AI-powered recommendation engine that performs predictive and prescriptive analysis of the data ingested and automated from multiple sources. In December 2020, Quantela made a strategic investment in Singapore based multimedia analytics company – Graymatics, giving our smart city platform the edge in video analytics as well.

For cities to be liveable, they need to operate efficiently. Data analytics gains precedence in this regard with monitoring of the data feed and generating alerts when certain pre-programmed thresholds are breached. Allow me to cite a couple of examples of data analytics applications across different use cases in a city.

Quantela provides a single pane view for cities to look at all the data from multiple sources, draw inferences form them as well as design automated policies for services based on the data input.

What are some of the upcoming projects and exciting opportunities in 2021 that Quantela is working on that you can share?

Besides aiming to land Outcomes-based Financing deals globally, we are working on traffic enforcement project in the Middle East where we have worked on building the infrastructure and recovering the same through revenue share. We are working with a country in the CIS region to help them design the smart cities framework and pilots for the entire country, we are making deep investments in digitizing of public spaces and are discussing partnerships in both the USA and Middle East. In India, we are bidding for upcoming smart cities and safe cities opportunities, continuing to be market leaders in the space. Given the success of our CoVER platform, we will be looking to help prepare dashboards for public health officials to monitor the vaccination drive across cities right up to the ward level.

To fuel our global expansion in the US, Middle East and European market and broaden our bouquet of offerings through our purpose-built platforms, we will be looking at inorganic growth through acquisitions and strategic partnerships.

2021 will be the year of inflection for Quantela as we will be looking at diversifying our customer base beyond cities with our decision-making platform lending itself to the requirements of commercial establishments, educational campuses and public spaces such as stadiums, ports, and airports and amusement parks among others.

With cities in India such as Lucknow, Ghaziabad, Prayagraj, Kanpur, Varanasi, Pune, and Ahmedabad raising or planning to raise funds via the municipal bond route, where does Quantela’s financing model stand amidst the alternative fund-raising sources?

The COVID-induced lockdowns across the world saw traditional sources of funds for urban local bodies (ULBs) – be it through land-based levies, entertainment tax, advertisement fees or stamp duty dry up. Non-traditional sources of fundraising such as grants, multilateral debt, and crowdsourcing were not possible as federal governments, businesses, and individuals were also cash strapped.

While municipal bonds do present themselves as long term financing instruments. However, for the debt to be sustainable, the rate of nominal economic growth should be ideally higher than the average rate of interest. Moreover, it calls for greater accountability through periodic reporting for credit rating purposes – something which most cities may not have prior experience in.

Quantela’s model is focused on building sustainable revenues for cities where the user fees or savings can be substantial and be self-serving. We also focus on newer uses cases which so far have not been tapped or offer significant value growth through digital transformation. Municipal Bonds and our model can coexist with differing value propositions to the city.