PPP in Urban Development

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Slide 1: 

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An Introduction : 

Types : Service Contract; Management Contract/Lease; Build Operate Transfer (BOT); Concession; Joint Venture; and Community-based Provision An Introduction The approach of developing and operating public utilities and infrastructure by the private sector under terms and conditions agreeable to both the government and the private sector is called PPP or P3 or private sector participation (PSP). High priority, government-planned project. The project must have emerged from a government-led planning and prioritization process. The project must be such that, regardless of the source of public or private capital, the government would still want the project to be implemented quickly. Genuine risk allocation. Shared risk allocation is a principal feature of a PPP project. The private sector must genuinely assume some risk. Mutually valuable. Value should be for both sides, which means government should also genuinely accept some risks and not transfer the entire risk to the private sector, and vice versa.

Objectives of PPP in Urban Development : 

Objectives of PPP in Urban Development Achieving a balance between the development of the urban areas and protection of the environment with an eye to equity in employment, shelter, basic services, social infrastructure and transportation in the urban areas. To minimize the depletion of non-renewable resources and resort to environmentally sustainable economic development. In order to reduce the effect of climate change, we need to include climate-proofing concepts in national development initiatives as Urban areas mostly face problems of air quality pollution, green house gases, unsustainable consumption and of inadequate sanitation and water supply. Effective management of water supply, waste and energy. To reduce inequality in services between rich and poor. Robust and dynamic structure; Government in an enabler role; Government ownership is high; Governance structure ensures consumer &public interests are safeguarded; Commercial interest protected; Domicile risks to parties that are well equipped to deal with them; Transparent and well-conceived contracts; Documentation recognizes rights and responsibilities of all project-related parties; Concerns of all stakeholders addressed; Involves participation of a large number of institutions: government, politicians, banks, financial institutions, investors, contractors, consumers, NGOs, etc. PPP Strengths and Effectiveness Facing criticism from civil society organizations, public interest groups, media, and other stakeholders. The role of the private sector in public services. Lack of trust in the private sector with public service, tariff increases, layoffs, and poor stakeholder management. The failure of some of these projects to faulty, rushed, noncompetitive, and nontransparent application of the PPP principles Weaknesses of PPP


URBAN DEVELOPMENTS Fund Requirements for Urban Infrastructure: 2007-2012 The India Infrastructure, Report, 1996, assessed the total annual investment needs of water supply, sanitation and roads sectors at Rs. 28,036 crores per year on an average during 1996-2006. To overcome these constraints and challenges, the Ministry of Urban Development has initiated institutional, fiscal and financial reforms.

Fiscal Incentives : 

Fiscal Incentives Quality of Housing Stock Slum Population as %age of total urban population Municipal Bonds in India

C i t y S t r u c t u r i n g : 

C i t y S t r u c t u r i n g City Development Strategies (CDS). Local level governance. Financing & Resource Generation at city level. Technology Transfer, Adaptation & Innovation.

Infrastructure : 

Infrastructure Overview of Urban Infrastructure

Slide 8: 

ROADS India has one of the largest road networks in the world, aggregating to 3.34 million km. The road network, as on December 2007, comprises 66,590 km of N.Highways, 128,000 km of State Highways, 470,000 km of Major District Roads & about 2.65 million km of other District & Rural Roads. 4-laning of 11,113 km (NHDP Phase- III) including 4,035 km already approved. Accelerated road development programme for the North Eastern region. 2-laning with paved shoulders of 20,000 km of national highways (NHDP Phase-IV). 6-laning of GQ and some other selected stretches covering 6,500 km (NHDP-Phase-V). Development of 1,000 km of expressways (NHDP Phase-VI). Development of ring roads, bypasses, grade separators, service roads etc. (NHDPPhase-VII) RAILWAYS The Railways expect to carry 95 million tones incremental traffic per year. About 1,100 million tones revenue earning freight traffic by the end of the 11th Five Year Plan. Increase in freight rates for commodities being transported below cost and lowering the freight charges for commodities being moved at abnormally high rates. The number of commodities in goods tariff has been reduced from 4,000 commodities to 80 main commodity groups in 2005-06, and further to 27 groups in 2006-07. The total number of classes for charging freight has been reduced from 59 to 17.

Slide 9: 

OTHER SECTORS The India Infrastructure Report, 1996 estimates the annual investment need for urban water supply, sanitation and roads at about 28,035 crores for the next ten years. 100 percent coverage of the urban population under safe water supply and sanitation services by the year 2021 at Rs.172,905 crores. The amount required for urban transport infrastructure investment in cities with population 100,000 or more during the next 20 years would be of the order of Rs.207,000 crore. Etc.


CONCLUSION In conclusion, it is evident that the New Economic Policy launched in India in 1991-92, did see several important initiatives in the urban sector designed to encourage private sector participation in urban infrastructure projects. These initiatives would need to be taken to their logical conclusion. A series of new Reform Measures are being put together for implementation during 10th Plan Period. Through these, we hope to reverse the declining standards of urban infrastructure in the country.

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