pr: MEGA CITIES CONFERENCE (PIB)

MEGA CITIES CONFERENCE
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 11:35 IST
Representatives of mega cities? corporations, senior officials from banks
and financial institutions, apex industries? organizations, state
government representatives met in a daylong conference in New Delhi
yesterday (5th June 2007).  The objective of the meeting was to take stock
of the implementation vision of the Jawaharlal Nehru National Urban
Renewal Mission, JNNURM projects in the mega cities of Delhi, Mumbai,
Ahmedabad, Bangalore, Chennai, Kolkata, and Hyderabad.

Shri M. Ramachandran, Secretary, and Urban Development Ministry chaired
the conference.

            The meeting felt that the projects, which are amenable to
Public Private Partnership, PPP, should be listed by the
cities. Assistance of financial institutions should be
enlisted and more attention should be paid to simultaneously
moving further on the PPP route.

The conference felt that success shown like the Latur  (Maharashtra) Water
supply project where private participation has been successful should be
widely circulated.

            Considering that about Rs. 26,500 crore worth of projects are
now being taken up in the mega cities of India, the conference
also delineated on the magnitude of contracting ability
required in execution of these projects.  Cities have been
reporting constraints in the execution capacity and there is a
need to attract large engineering firms to ensure timely
execution of projects.  The engineering firm representatives
felt that tender systems have to be standardized to eliminate
uncertainties.

            The conference agreed that the commercial banks have an
increasing role in financing urban infrastructure projects and
the banks have committed to have a second look at the terms
and conditions.

The conference has prepared a subsidized interest rate regime for
financing viable urban infrastructure projects by banks and financial
institutions.

The proposed Urban Infrastructure Fund, which the Ministry of Urban
Development is proposing, could be an effective vehicle for the
multinational financial institutions, national financial institutions and
the banks to earmark more resources for urban infrastructure projects.

The Secretary, Ministry of Urban Development has constituted groups to
coordinate with the banks, look at the possibility of standardizing tender
related issues and improving the pace of implementation. The Secretary has
asked the Secretary, Urban Development, Tamil Nadu to suggest the
possibility of having a single focal point in the mega cities which could
be an immediate and effective contact point for all those interested in
taking up projects in the cities, PPP initiatives and implementing best
practices.

JNNURM, which is the country?s flagship programme for urban local bodies,
focuses on urban infrastructure improvement and provision of basic
services for the poor with a focus on 63 mission cities (with population
of 120.6 million). A related programme is covering the remaining 5098
cities and towns of India.

            The projected investment requirement as per City Development
Plans drawn by each city sector wise is as follows:

Rs. 81,418 crore for 7 mega cities and

Rs. 55973 crore for remaining 56 cities for Urban Transport

Rs. 40,062 crore for all 63 cities to improve water supply

Rs. 33,324 crore for sewage,

Rs. 20,100 crore for drainage

Rs. 56,649 crore for basic services for the urban poor

             ?If this type of investment requirement is to be met, the
Government of India?s share in the form of grants to states
will have to be something like Rs. 1,35,000 crore.  The
States and local bodies will have to find the balance amount.
 Here is a challenge to our Government, local bodies and
banks and financial instructions?, said M. Ramachandran,
Secretary, Urban Development Ministry.

            It is worth mentioning that so far Rs. 26000 crore worth of
projects have been approved in a one-year plus period for the
63 cities.  These projects cover a cross section of urban
infrastructure such as water supply, sewage, drainage, solid
waste management, roads and flyovers, urban transport, housing
for the poor etc.

It was pointed out in the meeting that with the series of initiatives
launched to improve the finances and financial management of the local
bodies, such as double entry book keeping, support for tax free urban
bonds, pooled finance development fund, facility to support a grant of
local bodies to enter the bond market, credit rating of cities, property
tax reforms etc., the financial strength of the city corporations and
sustainability are definitely on the improvement path.

PVR/AS