Financing Urban Infrastructure -issues and Options
- 1. Financing Urban Infrastructures- Issues Options Ar. Jit Kumar Gupta Former Advisor , Town Planning PUDA E Mail- [email protected]
- 2. • Role & Relevance of Infrastructure
- 3. Cities and their Context • Cities -- known for its positivities in terms of to be • -areas of concentration of population/ • - area of concentration of activities ,concentration, services, healthcare, education • - Engines of economic growth- • - generators of Large employment , • - Generators of enormous wealth • - -Known to offer better quality of life than villages • - Make cities More productive • - promote prosperity of people , communities and nations • However ; Productivity /operational efficiency of cities-depend upon quality/Quantity of infrastructure's provided
- 4. Infrastructure- Role and Relevance French Term- first used in France in 1880s -- infra- meaning below & structure- means building - -foundation - upon which structure of city, economy & society built. -Infrastructure – determines operational efficiency of Cities, people, institutions, economy - Infrastructure -- Forms Backbone of Growth, Development, Prosperity of any nation helps Physical & social, Development of a Community/City/Country - Promoting Businesses in cities -
- 5. Role & Importance - Infrastructure -- Roads/Transport - Links area of Production & Consumption - Improves accessibility; -Bridges gap between-- demand & supply -Delivers Goods/Services --Connecting places -- living and working - Education-- Skilling , Empowering people & Communities -Green Spaces -- Make people happy /healthy& productive -Connect Communities- promote socialization -- Lifeline of city/nation
- 6. Creating- Infrastructure - Providing infrastructures – largely falls within Governmnet domain- -Investments in infrastructure -- costly & capital-intensive, - - Public Sector– Fund Large-scale infra Project- by Tax Revenue • -- Private Sector/local authorities-- undertake Small scale Infrastructure -. - Public- Private Partnership- Large scale infra projects. - -Since 1992- Liberalization/Globalization of Indian economy- Major investment coming from-- Private sector or JV- Public/Private sector
- 8. Typologies of infrastructure •-Physical Infrastructure – Hard Infrastructure & •- Social Infrastructure--Soft Infrastructure • Physical/Hard Infrastructures- —include facilities and structures that directly improve economic development,- - Production ,Distribution and safety -Transportation/ Communication network ,Roads, Power, Water supply, Sewerage, Storm water drainage , Solid waste management, •Social/ Soft infrastructures– include services that lead to human resource development-- services for maintaining health, social needs of communities—Healthcare , Education, Leisure, Open Spaces, Entertainment, Community facilities ,Museums, Art& Culture, Heritage, •Essential infrastructure-- power stations , electricity supplies, sewage systems, clean drinking water , major transport systems (metro systems /railways) for large cities and telecommunications networks •Non-Essential infrastructure- - a bridge across a river might be essential -- while a large sports stadium is not
- 10. Indian Urbanization • 250 million in 1919 • 1210 million in 2011 • 1410 million in 2023 • 2050- Indian population- 1600 mil. -- 50% in Urban India. • Metropolitan Centres -5 (1951)- -53 (2011)- 68(2031) • 10 m plus- nil (1951)- 3 (2011) -7 (2031)-9 (2051) • During last 100 years, India witnessed— - -Urbanization level x 3 times - --Urban settlements x 4 times - --Total Population x 5 times - -Urban population x 15 times - -Rural population x 3.5 times - India became most populated country on this planet-2023- 1.4 Billion people
- 11. Urbanization-issues *Urban centers perpetually suffer from poor infrastructures and accordingly have ; Enormous growth of slums •Poor quality of life •Poor Air Quality -- NO, O3, Co2,SO2 suspended particulate •-98% cities in low& low/middle countries / 56% in high income economies do not meet air quality –WHO norms •Shortage of water stressed •Urban Flooding •-Acute shortage of Housing • -- Limitation of Services • - Poor Sanitation
- 12. Urbanization-issues • acute shortage of green spaces • -Unsafe-Prone to disasters- natural & manmade • Perpetually Suffering from problems of traffic /transportation • Have Low road capacity • Poor quality of Roads • High degree of congestion • Large number of accidents Indian Urbanization rightly called : Urbanization of Population Urbanization of Poverty Urbanization of Pollution
- 13. STATUS OF URBAN INFRASTRUCTURE •In India, existing infrastructure scenario critical. •As per recent estimates: -No city provides water 24 X 7 X 365 days -only 50 % households -- access safe water. - only limited households --had toilet facilities. -More than 2/3rd population left uncovered by sanitation -rainwater disposal- covers only 66 % of urban population. • City roads lack capacity leading to - -high degree of congestion – -- Large number of Accidents -- High degree of Pollution -- Delays/wasting time -- Promoting operational in-efficiencies - Poor quality & maintenance of infrastructures & Inadequate infrastructures -- hamper development and results in Lower Productivity
- 14. STATE OF INFRASTRUCTURES-INDIA --Water Supply- 105 lpcd (Norm-150 lpcd)- Gap(2007-30)-94billion lpd -- Sewerage treatment-30% (Norm- 100%)- Gap(2007-30)-109 billion lpd •-- Solid Waste- 70% ( Norm 100%)- Gap(2007-30)- 82mt/annum •Public Transport- 30% of total trips- (Norm 50%)- • Gap(2007-30)- Private Transport-4,40,000 lane kms, •Railway based mass transport need 6400 kms of track •Slum Population-24%-( norm 0%)-Shortage -38 mdu •Park & open Spaces-2.7 Sqm-( norm 9 sqm) •High Powered Committee Report --on Urban Infrastructure/Services(MOUD,GOI)- 2011 -Projected Investment for Urban Infrastructure for next 20 Years (2012-13) to (2031-32)- --New Infrastructures -Rs 39.2 Lakh Crores( excluding cost of land) -O&M -- old & new assets- Rs 19.9 – Total Cost – 59.1 Lakh Crores -- ULBs to contribute 54% capital investment & 25% O&M cost -Situation improving with launch of National Missions --PMAY; Swachh Bharat Mission, NuLM, MNREGA; AMRUT; HRIDAY,
- 17. Cities finding increasingly difficult to provide /maintain •infrastructures due to ….. --Enormous increase in growth of population, -- widening gap between demand & supply --High cost involved in making provision of service -Over dependence on resources starved public sector - Lower order of priority/ allocation of funds Irrational user charges poor recovery of charges Absence of innovative planning& designing of infrastructures Poor quality of construction Low priority to maintenance / & upkeep of services •Absence of planning framework INFRASTRUCTURE --ISSUES
- 18. INFRASTRUCTURE ISSUES…. Mismatch between capacity, capability, resources & willingness of ULBs to provide infrastructures Inadequate manpower deployed in provision / maintenance. Low allocation of financial resources for infrastructure development at national/ state/ local level Poor urban governance & poor delivery of services Highly subsidized urban services Poor recovery & collection of service charges High degree of leakage poor accountability Construction & maintenance divorced from each other
- 19. INFRASTRUCTURES-- ISSUES.. Unauthorized/unplanned and sub-standard development • Non-involvement of private sector in provision of services Lack of political will to rationalize service charges •Poverty -25.7%urban population still live below poverty line Compartmentalization of services. Lack of co-ordination among service departments Non- involvement of people / stakeholders in prioritizing, planning / maintenance of services Outdated technologies-- for construction of infrastructures Irrational norms-- for planning and provision of services Inadequate/ appropriate space for city level infrastructures Absence of Master Plans/ Development Plans
- 31. • Infrastructure- •Approach- Global& Local Govt of India
- 36. Smart City Mission in India • Core infrastructure elements in a smart city include: • i. Assuring adequate Water Supply, • ii. Assured Electricity supply, • iii. Sanitation, including Solid Waste Management, • iv. Efficient Urban Mobility and Public Transport, • v. Create Affordable Housing, especially for poor, • vi. Ensure Robust IT Connectivity & Digitalization, • vii. Have Good Governance-- e-Governance &Citizen Participation, • viii. Promoting Sustainable Environment, • ix. Promoting Safety & Security of Citizens, -- particularly Women, Children ; Elderly, • x. Promoting Health & Education.
- 37. AMRUT-Atal Mission for Rejuvenation and Urban Transformation Priority of Mission -- Water supply followed by Sewerage. Every household has access ; --to tap -- assured supply of water -- to Sewerage connection -- Developing greenery /well maintained open spaces (e.g. parks). -- Reducing pollution by switching to public transport/ walking ,cycling - Replacement of street lights with LED lights •Components: • Capacity building- for implementation, water supply, sewerage , septage management, storm water drainage, urban transport and development of green spaces and parks. • Reforms aim at ---improving delivery of citizen services, • --bringing down cost of delivery, • --improving financial health, • --augmenting resources and • --enhancing transparency. . •
- 38. Swachh Bharat Mission • Swachh Bharat Mission, Swachh Bharat Abhiyan, /Clean India Mission i • -- country-wide campaign-- initiated by the Government of India --on 2 October 2014 with aim of; • Providing complete sanitation solutions --for India’s 4041 statutory towns. • Eliminating-- Open defecation/ use of insanitary toilets & manual scavenging ; • Providing --household & public toilets, • Improving -- Solid waste management, • Make India-- Open Defecation Free India. • Sensitizing people-- on importance of sanitation & toilet usage • Capacity building -- through information, education & communication (IEC) • Since sanitation - state subject, states given freedom to • --design framework & flexibility to use incentives for construction of individual household toilets • -- Collective behaviour change & • -- community led total sanitation -suggested approaches, • --with Centre complementing efforts of State Governments.
- 39. Essential for in urban infrastructure • Key Elements--Capacity , Sustainability , Quality • 1. Capacity--System must have Adequate Capacity — balance between demand & Supply in case of services to be provided- negative capacity’ describes inefficiency- - over capacity - wastage of resources • 2. Sustainability - Infrastructure provided must be made sustainable in long term- Physically, environmentally, socially & financially - • 3 Quality –Infrastructure must be durable qualitative in construction, operation & management using state of art technologies • 4 Norms- Infrastructures must be based on well-defined norms and standards • 5 Inclusive; must be made available to all residents of area without discrimination • 6 Affordable; Infrastructures must operationally cost- efficient, and administratively efficient –should not cast undue financial stress to user
- 40. SUGGESTED APPROACH……. Providing basic infrastructures to all in urban India /improving quality of life would require; - Having a Well defined Vision and Mission -Declaring Infrastructure a Priority Sector-Making Higher Budgetary Allocation -- Promoting Planned development -Making Cities Compact -Preparing City Master Plans -Defining Realistic Norms& Standards -Phasing of Infrastructure Development -Adopting innovative Technologies - Ensuring Community Participation - Involving promoters /Real Estate Developers
- 41. Suggested Approach... -Promoting Public - Private Partnership --Contracting Out --Promoting Inter-agency Coordination - Avoiding over- lapping -Combining Construction & Maintenance Contracts --Preparing Service Manuals --Promoting Governance/ Administrative Reforms -- Ensuring Capacity Building -Providing Resources- Technical/ Manpower -- Pooling Resources --Unlocking land as Major Resource -Using Technology -Avoiding Leakages- Building Capacity-Empowering local Level agencies- Looking for Good Examples for Infrastructures
- 42. Land Based Tools for Raising Resources Best Options to raise resources--Promote Planned Development and Involve Private Sector at local level Charges for change in land use Charging fee for scrutiny/ sanctioning building plans Levying Compounding Fee on built environment Levying Development Charges i.e. Internal & External Charges Levying Property tax Taxing Vacant lands Granting Advertisement Rights Levying Betterment charges. Using Right to Air space Trading Floor Area Ratio Adopting Accommodation Reservation Using Transfer of Development Rights (TDR) Undertaking Town Planning/Land Pooling Schemes •Optimum Utilization of Vacant Government Lands (OUVGL •Levying Parking Charges
- 43. Chandigarh Master Plan- Le Corbusier- Planned Development
- 46. • Sardar Patel Ring Road -- 76.10 km long ring road encircling Ahmedabad, • Toll road built by -- Ahmedabad Urban Development Authority (AUDA). • Built at a cost of 3.55 billion, ₹ • opened in 2004- Toll collection 98 crores in year 20-21- • AUDA demarcated --a region of 1 km around road— • --residential affordable housing zone • -- for improving affordable housing. • - Greening City - 200 hectares of green public space -241 Parks
- 49. Leveraging Floor Area Ratio
- 50. Building Plan Approval Charges
- 55. SWM-Greening Dumping Site - Mumbai – Gorai • .
- 57. Using Air Space Rights
- 58. Using Air Space Rights
- 59. Levying User charges- SW, Water supply, Power , Sanitation, Paking Charges
- 62. Leveraging Transfer of Development Rights
- 63. Accommodation Reservation • Concept used in Mumbai/Maharashtra • Accommodation Reservation • -- land-based concept where • -- owners allowed to use full potential of construction on land • -- based on defined FAR • -- on portion of land- • -- surrendered to local body for public use. • -- In this mechanism; • -- local body gets access to land/ infrastructure • -- without paying any cost for land • - made applicable for public infrastructures - community center/ health center /fire brigade • whereas owner does not lose • - entire land and • - enjoys full FAR on remaining land.
- 64. Using Technology
- 65. Smart Technologies • Using smart technologies for ; • -- smart parking- to help find a parking space / allow for digital payment. • -- smart traffic management-- to monitor traffic flows / optimise traffic lights to reduce congestion/ride-sharing services / digital bus stops- bus schedule -Managing Traffic/parking --Minimizing travel • Promoting Energy conservation / environmental efficiencies- dimming streetlights when roads are empty– • -- improving operations /maintenance / planning of power supplies. • -- Combat climate change / air pollution • --waste management / sanitation -- rubbish collection, bins /fleet management • -- Promoting safety measures-- monitoring areas of high crime-- using sensors for early warning for floods, landslides, hurricanes or droughts. • -- Smart buildings --structural health monitoring -- feedback to determine when repairs are necessary. • -- Citizens notifying officials about problems,-- road potholes— monitoring infrastructure problem leaks -- water pipes. • -- improving efficiency of energy use, • -- connecting all services to provide combined solutions for citizens.
- 67. Indore- Cleanest City of India
- 68. Indore- Cleanest City of India • IIndore selected smart city under the Smart Cities Mission. • Qualified in first round among 20 first twenty cities • Indore part of the Swachh Survekshan since its inception • Earlier ranked 25th in 2016. • Now ranked as India's cleanest city seven year in a row 2017, 2018, 2019, 2020, 2021, 2022 and 2023. • Indore - declared as India's first 'water plus' city • Achieved 100 % solid waste Management • Achieved 100% Sewerage Treatment • Created Large open spaces • Indore-- only Indian city to be selected for International Clean Air Catalyst Programme.
- 69. Indore Municipal Corporation- SWM- Lessons • Political will & administrative commitment-- crucial for successful implementation of SWM • Public awareness and participation - ensured success of waste management initiatives. • Strict monitoring and enforcement mechanisms-- helped application of waste management rules & regulations • Investing in modern waste processing infrastructure-- improve operational efficiency of waste management systems & reduce environmental impact. • Adopting Comprehensive/ integrated approach - help addressing waste management challenges. • Creating Appropriate Legal Framework
- 70. WAY FORWARD…. Habitat-II-1996 - Urban sustainability cannot be achieved without: -Providing adequate infrastructures, --Ensuring Adequate services -Making services affordable However, Providing affordable infrastructures in urban areas -- most formidable task, ---for ULBs, Administrators and Agencies involved in -planning, development / anagement of urban areas Our capacity/capability to meet these challenges, -effectively / efficiently-- would hold key and -determine future of Urban India --where millions of poor live. -BEST OPTION -– Promoting Planned Development - -Working With All Stakeholders in co-operative/ /-CO-ordianted /Collaborative Manner- - Involving communities -- According Priority- -Allocating adequate Resources – Using innovative Technologies- Leveraging potential of LAND- Ensuring Political Will- Involving Private Sector