Public-private tie-ups for urban projects

BANGALORE: The central government is set to extend the public-private partnership (PPP) model to urban infrastructure projects for their speedy development across the country.

"As an estimated 50 percent of the population (about 700 million people) will be living in cities by 2025, the government and other stakeholders face the daunting task of providing world class infrastructure facilities to improve the quality of life, connectivity, utilities and access to basic/civic amenities for all denizens," union Urban Development Minister Jaipal Reddy said here on Friday.

"Since the central government and states alone cannot shoulder the responsibility due to financial and resource constraints, the private sector will be involved to take up infrastructure projects on the PPP model as in the case of national highways, power, transport, airports and seaports," he said.

Addressing captains of India Inc, policy-makers, planners and associate stakeholders at the inaugural session of 'Suminfra', a two-day infrastructure summit organised by the Confederation of Indian Industry (CII), Reddy said in the face of growing urbanisation speedy infrastructure development was imperative.

"It is a great challenge to the governments (central and states) and a huge opportunity for the private sector, especially entrepreneurs, builders and NGOs (non-governmental organisations) to jointly execute infrastructure development projects on a war-footing through PPPs," Reddy told the around 600 delegates at the summit on 'Sustainable PPPs in Infrastructure'.

Reddy said the central government had proposed rapid bus transit system (RBTS) in metros and cities across the country to provide high-speed luxury commuter service and ease the traffic congestion by discouraging use of private vehicles.

"So far four cities - Ahmedabad, Pune, Nagpur and Indore - have been granted permission to introduce the system on the lines of the Bogota model in Columbia, where such a service has drastically brought down the use of personal transport," Reddy disclosed.

Referring to the Jawaharlal Nehru Renewable Urban Mission (JNRUM), the minister said 63 cities from different states had submitted projects to his ministry. The projects were being evaluated by independent agencies for approval and fund allocation.

"The projects pertain to drinking water supply, storm-water drainage, solid waste management and urban transportation. The projects will be executed through PPPs. Around 77 percent of the total funds earmarked for the JNRUM (Rs.1,000 billion) will be spent on these four vital projects across the country, with 50 percent contribution by the respective states and the balance by the centre," Reddy said.

Admitting that urban development was neglected for years as the rate of urbanisation was lower than in the rest of the world, he said that during the last three years, however, the pace had gathered momentum due to healthy economic growth and increasing migration from towns and villages in search of jobs and growth opportunities.

"Till 2001, the rate of urbanisation was 28 percent. But during the last three years it has gone up to 30 percent, and is projected to increase by 8-10 percent every year. The private sector and other stakeholders have an equal responsibility to ensure growth with equitable distribution of resources," Reddy said.

Inaugurating the summit, Karnataka Chief Minister H.D. Kumaraswamy said the state government had come out with a new policy recently to implement various infrastructure projects in Bangalore and other cities in a time-bound manner, with increasing role for the private sector through the PPP model.

Andhra Pradesh minister for Infrastructure and Investment Venkata Ramana Rao, CII southern region chairman P.K. Mohapatra, CII past-president and Sanmar group vice-chairman N. Kumar and Suminfra chairman and L&T president (operations) J.P. Nayak also addressed the gathering.