CAG Report No. 11 of 2025 — Implementation of Smart City Mission, Government of Karnataka

Chapter-IV
30
While BenSCL adopted cloud environment based (IaaS27 Model) data centre for
its ICCC project, the other five smart cities established data centres ‘on
premises’ (at KMDS) and disaster recovery on cloud. The total cost incurred
for establishing data centre at KMDS for five cities was ₹37.90 crore. Adopting
cost-benefit analysis, the cloud-based data centre in IaaS model would have
costed ₹20.4628 crore, thereby effecting a saving of ₹17.43 crore.
The State Government replied (April 2025) that decision to adopt cloud hosting
was to be taken considering the ‘Total Cost of Ownership’ and not only the one-
time cloud hosting cost. The reply contradicts the fact that by establishing ‘cloud
based’ data centre economy was achieved in BenSCL. Further, the cost benefit
claimed in terms of adopting ‘on premises’ data centre was not forthcoming.
4.6.1.2 Non-completion of data centre at KMDS
The contract for MSI’s appointment to establish centralised Data Centre at
KMDS was awarded (March 2019) at a contract price of ₹60.22 crore. As per
the Master Service Agreement, the MSI was required to complete establishment
of Data Centre (DC), Disaster Recovery (DR), and Integrated City Operation
Platform (ICOP) within nine months from the date of issue of work order and
thereafter operation and maintenance for five years.
Audit observed that even after repeated reminders/notices issued by KMDS,
MSI (Agency) has not completed the project even after expiry of five years and
two months. The said work is under progress (May 2024) and financial progress
achieved to the extent of ₹19.08 crore only. The implementation of CCCC could
not be carried out in the absence of completion of data centre at KMDS.
Major factors attributable for delay in completion were non-availability of key
resources on the site as per RFP, IT devices installed reaching their end of life
and support and failure to complete installation and commissioning of devices
as described below:
• Non-implementation of enterprises Geographic Information System
platform
One of the goals of the smart city initiative was to create a single citizen
interface where all data and applications are available on a Geographic
Information System (GIS) platform.
As per paragraph 1.2.2.4 of the RFP Vol-2, the scope of MSI included
procurement, installation and commissioning of enterprise GIS platform and
application development. As per the RFP, the broad scope of the MSI included
the following:
• Development of state-wide GIS platform for all the five cities
• Development of city-specific GIS application
• Integration of developed GIS with city-wide application
• Development of GIS-based citizen application
• Integration with state-wide e-governance application
27 Infrastructure as a Service.
28 54 per cent of the CAPEX of ₹37.90 crore for establishing Data Centre at KMDS.