The Hindu Business Line : Urban infrastructure: Rs 12,000 cr required via partnerships

As much as Rs 12,000 crore is required to be mobilised through partnerships and assistance from multi-lateral and bilateral agencies to bridge the investment gap for improvement of urban infrastructure during the Eleventh Five Year Plan.

The Ministry of Urban Development has projected that as far as the avenues for resource mobilisation are concerned, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT) initiatives would entail Rs 70,000 crore, projected State outlays about Rs 35000 crore, while Rs 10,000 crore is expected to be mobilised from anticipated institutional finance (LIC, HUDCO, IDFC, ILFS, among others). The balance Rs 12,000 crore would need to be mobilised through partnerships. The Ministry is likely to discuss these issues at the conference of Chief Secretaries on Public Private Partnerships (PPPs) on Saturday.

“Partnerships is key to meeting the gap…there is a need to forge partnership with not just private sector but also with NGOs and civil Society…JNNURM with reform driven and part grant finance at the macro level and at the micro level with projects, is congenial for PPP in urban sector. JNNURM grants may be used for tariff reforms, escrow structures, good debt equity structures, creation of SPVs and for shadow tariffs,” it said.

The roadblocks for ushering in PPPs include lack of legislative framework; poor database of urban utilities; rationalisation of tariff and user charges; complexity of unbundling urban service delivery; and development of bankable and financially sustainable models by the project developers, among others.

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