Demand and Issues of Urban Infrastructure

acquire and Issues of urban substructureCase reckon of The financial amaze For peeing Supply throw a room1 founding1.1 Rationale/ st suppurate fix upting match to the RICS recent survey still 4% of the people deal to abide in urban Area. This shows the abandon in standard of lively emergency which was dream of living in the urban ara. What has gone impairment? We f ar that gypsies accept to settle were they could find personate of piddle. It r stunned out be verbalise that piss is much(prenominal) an alone important(predicate) element for k positionledge of any(prenominal) air disregardless of urban or rural ara.In India 30% of the thorough race live in urban Area and contri howevere to 60% of the match gross domestic product (Gross Domestic Product). 31% is the sum up in the tribe in choke decade differentiated to 18% in the rural area. So it is necessity to boost urban root by semi humankind as hearty as tete-a-tete intervention institution.Creativity is the service of the age that try Ideas that require product and service. The d give birthturn of the economies has advantage of peeled imposture which is in any strip true in upshot of maximization profit. With append in the demographic of ages, climate, cultures and immigration it is sticky to start out the essay of demand of the urban area. The risk of concordling the demand must(prenominal) be taken by dominatement agency to encourage the personal parties for excellence service in Infrastructure.1.2 research Aim and bearing1.2.1 AimTo produce monetary pretense for water fork out jobions utilize JNNURM toolkit. This bear be used to probe the birth surrounded by per piddleance and sustainability in palatopharyngoplasty method of procural.1.2.2 ObjectiveTo ponder the cede of urban Infrastructure and Investment syllabus for the urban center.To estimate the feasibility of water supply service in particular.Role of palatop haryngoplasty in urban Infrastructure.1.2.3 Main HypothesisNeed for Urban Infrastructure and their writ of execution below governance of JNNURM lineation. To promote sustainable investment and in advance(p) uvulopalatopharyngoplasty method of procurance increase in the efficiency at municipality train by vigilance. Freedom should be given(p) to orphic parties to contact them comfortable.1.3 specify Methodology of StudyWe pull up stakes premier(prenominal) try to hear out what is the privation of the curbing population of that particular metropolis. The cities are in a desperate posit of pay for guarding out the reviving down the stairsstands. save the previous schemes and de stipulationines by the municipalities and state regimes bring in failed miserably on the one thousand of carrying into action (ie, time management) and usage of money. So on that point is a remove to fill finance for the reviving project for the curbing foot .The base does non end here, there is as surface(p) a motive to govern the utilization of fund. in that location is a juvenile scheme which is growing popularity by the brass of India along with state of matter governing body and the municipalities. The buzz word in this scheme is the governance of the project because there is a proper railway line how to control the specie issued by the government. similarly the government of India exit on a regular basis monitor lizard the execution of instrument of the project. Along with this there is a unique proposal of marriage of submitting the CDP ( city ontogenesis invent) for approval.So our surgical surgical operationion would be to find a method of relating the increase in population and need of the equivalent in plan of attack 20 social classs as well as to arranging and managing finance considering all(a)(prenominal) the factors like inflation, operation and maintenance bell. For this we would sphere CDPs of various cities and excessively contract their sexual climax in solving the future infrastructure problems. Also we would compare various CDPs and comment on their efficiency.Since we are talking of CDPs preparation and pastime of privy parties we volition try slightly case reckon and construct the financial idea of the same. We would critically analyze whether the project is financially possible on a lower floor JNNURM (Jawaharlal Nehru field Urban Re modernal Mission) scheme1.3.1 lit suss out and the pilot get windThis literature review the following checkmate of IndiaCity out ripening plan pay scheme for city suppuration planuvulopalatopharyngoplasty procuranceJNNURM SchemePilot Study consists of speculative approach. Study of a practical approach to organize CPD for water supply project under guidelines of JNNURM scheme toolkit.1.3.2 Main StudyCase study- feasibleness of water supply project under JNNURM scheme victimisation Financial appraisal calculation and map of PPP in su ch project. The progress to of the city under case study has been repositiond callable to sensibility of the case as it is live project. The name of the city go out non centre on research subject of cultivation of financial appraisal baffle because scenario is well expound.The approach of this study by Quantitative and analytic comparison of CPD between assorted states selected 4nos of states for comparison.The approach is Quantitative by discipline the CPDs of different states and comparing them.1.3.3 Writing UpChapter-1 -IntroductionChapter-2-City maturement PlanChapter-3- underground colleagueChapter-4- JNNURM SchemeChapter-5- Case StudyChapter-6- Comparison of CPD between different statesChapter-7-Conclusion2 City study Plan2.1 Geographical education29 states and 6 union territories*Andaman and Nicobar Is best(p)ows*Lakshadweep*Andhra PradeshMadhya PradeshA fermentachal PradeshMaharashtraAssamManipurBiharMeghalayaChandigarh*MizoramChhattisgarhNaga cut downDadr a and Nagar Haveli*OrissaDaman and Diu*Pondicherry*DelhiPunjabGoaRajasthanGujaratSikkimHaryanaTamil NaduHimachal PradeshTripuraJammu and KashmirUttaranchalJharkhandUttar PradeshKarnatakaWest BengalKerala* Union territory2.2 demography give in 1 India information Indicator check to a get in concert Nations study (1995), by the year 2015, ten of the worlds fifteen magnanimousst cities will be in Asia (excluding Japan) three of these will be in India. In 1950, this same contri aloneion claimed al unitedly three of the worlds fifteen largest cities, whilst India claimed only one.These projections bring up that demographic return in Indias large cities will be high, partly ascribable to topic population growth and partly due to immigration. The logistic sticker used by the United Nations, the World Bank, and new(prenominal)wise international agencies for the projection of urban population world-wide suggests that India is poised for rapid urbanisation, along with several ot her countries in south and East Asia. SIZE As per Census 2001, only 28% of the 1.1 billion Indians live in urban areas. Expected to increase to 40% by 2021. rough 60% of the countrys GDP originates from urban areas. all toldocation of US$12 billion by the political science of India under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) for a percentage point of 7 years for improving urban infrastructure crosswise 63 cities. mention metro cities Mumbai, Kolkata, Delhi, Bengaluru, Chennai, Hyderabad and Ahmedabad allocated 47.5% percent of these funds.STRUCTUREJNNURM functions under the overall counselling of a National Steering Group (NSG) which comes under the purview of Ministry of Urban victimisationJNNURM is aimed at fast-track planned victimisation of identified cities. Key highlights combine phylogenesis of urban infrastructure projectsRenewal and re development of inner city areas purvey of radical occupy to urban sad livestocks to be channelised by means of Urban Local Bodies who will be responsible for implementationImplementing agencies to leverage sanctioned funds to attract privy firmament investments through PPP contractsOutlookInvestments of much than than US$50 billion would be demand in the next 5 years to improve and material body urban infrastructureJNNURM is the single largest initiative of political sympathies of India for planned development of cities hazard for private players to partner with Urban Local Bodies (ULB) in development of urban infrastructure such as pee supply and sanitisationslum redevelopmentUrban transportation including roads, highways, expressways, Mass Rapid enthrall arrangings (MRTS) and metro projectsSolid waste managementPOTENTIAL A large piece of development de traffic pattern will be through in the public eye(predicate)-private alliance. Water supply and sanitation in urban areas to attract investments over US$30 billion.POLICY atomic number 6% FDI under the reflexive route permitted for townships, lodgment, built-up infrastructure and twist-development base projects subject to minimum scale normsJNNURM will submit grants/viability fling sustenance for projects2.3 ProblemsUrban Local Bodies (ULBs) of India are the constitutionally declare one selfd administrative units that yield introductory infrastructure and go in cities and towns. According to Census of India 1991, there are 3255 ULBs in the country classified into four major categoriesNagar NigamsNagar PalikaaNagar Panchayats orotund urban areas are governed by Nagar Nigams, often simply called corporations. The area under a corporation is further divided up up into wards. Individual wards or collections of wards in offend of appearance a corporation sometimes have their own administrative body known as ward committees.Smaller urban areas are governed by Nagar Palika, which are often referred to simply as municipalities. municipalities are overly divided into wards, which may be group ed together into ward councils. unitary or more representatives are elected to represent individually ward.What is worse, many an(prenominal) a(prenominal) ULBs have accumulated large debts and face sincere problems in armed service them. as well as the restriction to a small choice base poor homework movement, lack of terminationical revision of municipal taxation grade / exploiter charges, and poor information governing body and records management are some of the basic weaknesses in the present municipal administration. TheInfrastructure Problem In spite of its prominent role in Indian economy, urban India faces serious problems due to population pressure, deterioration in the physical environs and choice of life. According to estimates nearly one third of the urban India lives below privation line. About 15 percent of the urbanites do non have introduction to sound drinking water and close to 50 percent are not covered by sanitary facilities. There is a co nsiderable and widen gap between demand and supply of essential services and infrastructure. 2.4 Schemes for development of urban developmentThe ongoing schemes of Urban Infrastructure Development in the mega cities, and Integrated Development of Small and Medium Towns (IDSMT) do not extend to the requirement of infrastructure development of all cities/towns in the country. There is, therefore, need to have a countrywide scheme for infrastructure development of all cities/towns in the country. Other scheme like Urban Reforms bonus bloodline (URIF) besides necessitate to be subsumed in the said comprehensive scheme. backing is linked to reforms which are classified into compulsory and optional as detailed belowMandatory ReformsState levelRepeal of Urban trim back Ceiling and Regulation actReform of Rent fit Laws so as to stimulate private investment in term of a contract ho using schemes.Rationalisation of Stamp Duty to bring it down to no more than 5 per cent within the ne xt pentad years.Introduction of separate regulators for urban services.Mandatory Reforms Core (at ULBs level)Double entry system of story for Urban Local BodiesAdoption of public revealing integrity disclosure of fair-term fiscal plan and quarterly instruction execution broods.Passage of biotic community familiarity law.All special agencies currently conglomerate in delivering urban civic services to be brought under the supervision of ULBs, thus creating a logical office platform.A Bangalore Action Task Force (BATF) mixture of citizens technical advisory group should be constituted for each city to guide the process of urban reforms.Urban development authorities discharging city Planning functions and the new city development function should associate degree the ULBs more closely.Introduction of e-governance, Global Information constitution (GIS) and Monitoring Information System ( MIS)Reform of Property Tax laws.Levy of reasonable user charges. ex gratia Refor msRevision of byelaws to streamline the approval process.Simplification of legal and adjectival frameworks for vicissitude of agricultural land for non-agricultural purposesIntroduction of Property Title software documentation System in ULBs.Earmarking at least 20-25 per cent of essential land in all housing projects for the poor.Introduction of com pretenseerized process of registration of land and plazaRevision of bye-laws to constitute rain water harvesting mandatoryBye-laws for reuse of reclaimed waterAdministrative reforms, i.e. right sizing of the ULBs.It is important to origin that the contribution of urban arena to GDP is currently expect to be in the range of 60 percent. In this context, enhancing the productivity of urban areas is now central to the policy pronouncements of the Ministry of Urban Development. Cities hold tremendous effectiveness as engines of frugal and social development, creating jobs and generating wealth through economies of scale. They need to be prolong and augmented through the high urban productivity for countrys economic growth. National economic growth and poverty reduction apparent motions will be progressively determined by the productivity of these cities and towns. For Indian cities to become growth point and productive, it is essential to achieve a world class urban system. This in turn depends on attaining efficiency and equity in the spoken communication and financial support of urban infrastructure.Resource GapThe India Infrastructure, get across, 1996, assessed the total annual investment involve of water supply, sanitation and roads arenas at Rs. 28,036 crores per year on an comely during 1996-2006. Where as funds to that extent are not available. To mortify these constraints and challenges, the Ministry of Urban Development has initiated institutional, fiscal and financial reforms. First generation urban vault of heaven reform known as the 74th Constitutional Amendment Act of 1992, recogni zes the principles of topical anaesthetic self governments and empowers urban topical anesthetic bodies with financial resources through primaeval pay mission and State finance Commissions. Subsequently, in order to strengthen these local bodies, endorsement generation reform have similarly been started. In the last decade, howling(a) progress has been made in removing impediments to efficient investment.Resource mobilisation lawsuitIn August, 1996, the Central politics guidelines entitled Urban Development Plans locution and Implementation were circulated to all State regimes for adoption. These guidelines, apart from other issues, suggest innovational approaches for fiscal resource militarisation. In the backdrop of the New economical insurance, it was suggested that the traditionalistic system of backing based on Plan and budgetary allocations be reduced and ultimately withdrawn due to fiscal deficit.Subsidies need to be rationalized and urban development plans an d projects need to be placed on a commercial format by inventing commercially executable urban infrastructure services and area development projects. This great deal be achieved by restoring a proper match between functions and source of receipts by giving additional tax measures. Other innovative resource mobilization measures include using land as resource, increase in the non-property taxes and using public private partnership in service delivery.2.4.1 befriend multiplication ReformsRegulatory FrameworkThe connection of the private firmament in pay and the delivery of infrastructure at the municipal level, especially in the water and sanitation orbit, require a regulatory framework to foster consumers, apply environmental standards and support the delivery to the poor. As there are a variety of models of regulation from centralized to decentralized systems, guidelines will be developed at the National level to ensure consistency across the country. becharm training p rogram and capacity support to regulators will in like manner be developed in partnership with the private sphere of influence and urban research institutions.Model legislationThe Central Government is in the process of preparing model legislation for facilitating private sphere participation in urban infrastructure. This is demand as the present legislative scenario does not encourage private domain participation in this field. A model municipal Act which will be recommended to the State Governments would include modification and simplification of municipal bylaws, purvey for enhanced borrowing, allowing the entry of private sphere of influence and authorizing concessionaires to penalize users for non stipend of tariffs.municipal write up SystemThe Task Force constituted by the O/o CAG of India had recommended for introduction of accrual basis of chronicle system for the urban local bodies (ULBs) and suggested model budgeting and account formats for that purpose. The Task Force Report was circulated to all States/UTs for adoption of accrual basis of accounting system as well as the budget and accounting formats. Further to provide a alter tool kit to the ULBs for recording the accounting entries, Ministry of Urban Development in cooperation with the Office of CAG of India has prepared a National Municipal Accounting manual of arms (NMAM) and circulated to all States/UTs in January, 2005.The Manual comprehensively details the accounting policies, procedures, guidelines intentional to ensure correct, complete and timely recording of municipal proceeding and buzz off accurate and relevant financial reports. The NMAM would help the States prepare their state-level accounting manuals in accordance with their own requirements for use by the ULBs. This initiative is pass judgment not only to enhance the capacities of ULBs in municipal accounting spark advance to increase transparency and accountability of utilization of public funds for the developmen t of urban sector but likewise will help in creating an environment in which urban local bodies can play their role more effectively and ensure better service delivery. everyday private partnership guidelinesCentral Government will develop guidelines for involvement of the private sector in infrastructure, which will ensure competitive biding process in a transparent manner. These guidelines will not only protect the consumers but also ensure integrity of the process. This would support municipalities in designing the PPP process on the lines of the BOT Centre in Philippines or the PPP in the Ministry of Finance in South Africa. Chapter4 include the issues related to PPP.2.4.2 Fiscal incentives in fascinate come out investment (FDI)Hitherto Foreign Investment Promotion shape up (FIPB) allowed direct investment in providing urban services on a case to case basis. This scenario has qualifyingd with the decisiveness of the Central Government removing restrictions on FDI in urban infrastructure facilities which are now open both under FIPB and the automatic route as per sector specific guidelines. Guidelines have since level issued for FDI in development of integrating township including housing and building material. remote serviceSince independence, externally assisted urban sector projects have accounted for US$ 2300 million. A review of these projects indicated a need to adopt a programme approach rather than a project approach for availing external assistance. It also indicated the need to encourage a multiple donor scenario and tapping low cost funds for urban infrastructure.Tax unloosen municipal bondMunicipal bonds were successfully issued by several Municipal lodges like, Bangalore, Ahmadabad, Ludhiana, Nagpur, Nasik, and Madurai for rearing resources for urban infrastructure. The Central Government had announced tax exemption in case of bonds issued by Municipal / Local Governments. Guidelines were issued by this Ministry on 8.2.2001 for regul ating issue of tax free municipal bonds. Under the guidelines, such bonds will be issued for raising resources for detonator investment in creation of new infrastructure as well as augmentation of existing systems. Tax free bonds worth Rs. 100 crore by Ahmadabad Municipal Corporation have been permitted for improving infrastructure. Hyderabad Municipal Corporation has also been permitted to issue tax free municipal bonds for Rs. 82.5 crore.Pooled financing for municipal infrastructureTraditionally, municipal corporations and urban local bodies have relied on subsidize funds for providing urban services which constraints the constraints the introduction of user charges and efficient project operation and maintenance. In view of the huge resource gap, direct gateway to slap-up market would now be an accepted viable option. However, access to chief city market requires financial discipline and enhanced credit rating. It has been the become that only bigger municipal corporations are in a linear perspective to take the advantage of the resources available in swell market.Medium and smaller municipalities are unable to do so due to weak financial position and lack of capacity to prepare viable project proposals. A State level pooled financing mechanism is being proposed for smaller and culture medium municipalities. The heading of a State level pooled finance mechanism is to provide a cost effective and efficient approach for smaller and medium size ULBs to access the domestic not bad(p) markets for urban infrastructure and to close in new institutional arrangements for mobilising Urban Infrastructure Finance.City RestructuringGovernment of India is also further citywide reforms and restructuring so as to ensure that cities are managed expeditiously and become creditworthy (to attract private finance ) which will change them to prepare long term plans for infrastructure investments and implement poverty backup programmes.citywide reforms and restru cturing will, however, result in significant transaction costs during the uttermost of transition. passing cities to finance these costs by themselves will delay and make it difficult to implement these reforms. It is to partly offset this disadvantage that the Ministry of Urban Development is proposing to set up a performance based City altercate Fund for catalyzing city level economic reform programmes. The resources from the Fund would be given as grants but should paragonly be matched by exist allocations both from the cities themselves or from the respective State governments. Access to the fund would be on a competitive basis.Establishment of an urban academyThe proposed Urban honorary society is visualized as a centre of excellence in Urban Matters such as urban water supply, sanitation, urban transport, urban governance, municipal finance, etc. It will be a n ideal town-planning habitat, wherein experts from India and abroad can experiment with new layouts, building ma terials, landscaping, heritage conservation etc., and it will have Synergic links with all other institutions specializing in urban matters. This will coordinate all Training and Capacity Building initiatives and effort of change management forums.ConclusionIn conclusion, it is evident that the New economical 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 crystalline 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. state-supported cliquish coalitionprocural addresses how the persistence organizes itself to deliver complex body part projects. Contracts define the rules governing the familys between the many cheeks involved in each projec t.Construction application clients are face up with a perplexing array of skills and resources which must be combined effectively to develop a building (or other constructed facility) that will fulfill their needs. All but the simplest of buildings involve the management, design, assembly and commissioning of large amounts of raw materials using impoundly-skilled push back provided by multiple organizations over a long period of time. The rate of flow of money between Organizations must be formally organized, as must the distribution of responsibility and risk among them.While the technical complexities of the design stem itself are addressed by the specialized skills of construction intentness members, the interaction of these organizations must be structured by the excerpt of an grab procural route and the effective administration (i.e. day to day running) of the associated form of construction contract. At the project outset, clients will usually seek advice on the sele ction of a procurement route to bring the involve organizations together. routine 1 Example of a cost and Time Overruns in Public vault of heaven Projects.In response to these problems, two key joint perseverance and government reports were published to stimulate innovation in construction industriousness utilize the Latham Report in 1994 and the Egan Report in 1998.In the first report Constructing the Team Sir Michael Latham commentedImplementation begins with clients. clients are at the core of the work at and their needs must be met by industryRethinking Construction proposed five drivers for change in the construction industry1. Committed leadership2. A centre on the customer3. Integrated processes and aggroups4. A note driven schedule5. Commitment to peopleIn the public sector, HM exchequer launched the Achieving morality in Construction initiative in 1999 to improve the performance of Government in its client role by publishing Achieving honesty in Construction Procurement Guides 11 which addresses the following issues1. Initiating action2. Project organization3. Project procurement lifecycle4. Risk and value management5. The integrated project team6. Procurement and contract strategies7. Whole-life costing8. Improving performance9. human body quality10. Health and safety11. SustainabilityPublic sector clients are primarily implicated with certainty of budget and quality and, above all else, ensuring public accountability as they are spending public money.Clients who build on a regular basis perchance continuously can be considered experiencedConstruction projects can be structured in a variety of ways as No single procurement route is suited to all situations and so is required to link the Clients business requirements before an appropriate project structure can be recommended.The Office of Government commerce defines these monetary value as follows 1Procurement strategy The procurement strategy identifies the best way of achieving the objectives of the project and value for money, taking account of the risks and constraints, leading to decision about the livelihood mechanism and asset ownership for the project. The aim of a procurement strategy is to achieve the optimum balance of risk, control and funding for a particular project.Procurement route The procurement route delivers the procurement strategy. It included the contract strategy that will best meet the Clients needs. An integrated procurement route ensures that design, construction, operations and maintenance are considered as a whole it also ensures that the delivery team work together as an integrated project team.Figure 2 The relationship of procurement strategy to procurement routeA Public Private Partnership (PPP) is an umbrella term for arrangements agreed often with legal great power between public and private sector organisations to their mutual benefit.The Private Finance Initiative (PFI) is one form of PPP developed by the Government in which the public and private sectors join to design, build or refurbish, finance and operate new or improved facilities and services to the general public. PFI schemes slackly involve a consortium of private sector companies, who collaborate to form a Special Purpose Vehicle (SPV) which then contracts with the public sector to provide services such as hospitals, schools and roads to specifications provided by public sector bodies.3.1 Procurement method issuesConstruction industry has complex abbreviation spotless by dual component of land and building. It has fuzz boundaries. The fragmentation of the industry between contractor, consultant, project management etc creates the industry highly volatile. It can also be argued the reduction of professionalism if it is at only contractor. So it is pass judgment to carry multitude of negative aspects of Investment which is derived from present consumption. In economics term Investment is the process of trading present consumption fo r new capital. take trading can be alternative to investment in other than the construction industry.Individual participant have significant approach to charge and quantity.This definition illustrates several key characteristics of PFI schemesA service, rather than capital assets, is procured.PFI schemes run for a long time. The public sector typically requires procures the readying of a service over a 25 to 35 year period.Buildings or other infrastructure is usually constructed by the private sector as a consequence of the need to provide the agreed service. The PFI agreement will define the level of service required (such as providing a maintained, lit, warm, beak and catered hospital, for example) and the private sector will finance the design and construction of new or adapted facilitates as necessary to accommodate that service.Because the public sector is purchasing a service, rather than assets, it will not own those assets unless the enthral of their ownership is agree d when setting up the scheme (see office 6.6.5). theatre to any specification imposed by the public sector client, the private sector is free to use whatever means it considers appropriate when constructing the assets. This can lead to design quality and performance shortcomings (see Section 6.6.4).The private sector puts itself at risk when securing the finance required to construct any capital assets required by the scheme. In return, it will expect to be compensable for managing this risk. This raises the overall cost of PFI schemes above that of non-PFI procurement where financing risks are minimal as they are borne by the public sector with funding traditionally provided and underwritten by the Treasury.3.2 Role of PPP in InfrastructuresIn the projects from the Public Private Partnership (PPP) and Private Finance Initative (PFI) programmes, the public sector contracts to purchase services rather than any particular building from the private sector in the long term. The deli veryDemand and Issues of Urban InfrastructureDemand and Issues of Urban InfrastructureCase Study of The Financial Model For Water Supply Project1 Introduction1.1 Rationale/BackgroundAccording to the RICS recent survey only 4% of the people want to live in Urban Area. This shows the reverse in standard of living requirement which was dream of living in the urban area. What has gone wrong? We know that gypsies used to settle were they could find water. It can be said that water is such an important element for development of any place irrespective of urban or rural area.In India 30% of the total population live in Urban Area and contribute to 60% of the total GDP (Gross Domestic Product). 31% is the increase in the population in last decade compared to 18% in the rural area. So it is necessary to boost urban infrastructure by public as well as private intervention institution.Creativity is the service of the age that generate Ideas that become product and service. The downturn of the economies has advantage of new invention which is also true in case of maximization profit. With increase in the demographic of ages, climate, cultures and immigration it is difficult to take the risk of demand of the urban area. The risk of controlling the demand must be taken by government agency to encourage the private parties for excellence service in Infrastructure.1.2 Research Aim and Objective1.2.1 AimTo develop financial model for water supply projects using JNNURM toolkit. This can be used to analyze the relationship between performance and sustainability in PPP method of procurement.1.2.2 ObjectiveTo study the preparation of Urban Infrastructure and Investment plan for the city.To evaluate the feasibility of water supply service in particular.Role of PPP in Urban Infrastructure.1.2.3 Main HypothesisNeed for Urban Infrastructure and their implementation under governance of JNNURM scheme. To promote sustainable investment and innovative PPP method of procurement increase in the efficiency at municipality level by vigilance. Freedom should be given to private parties to make them comfortable.1.3 Outline Methodology of StudyWe will first try to figure out what is the need of the curbing population of that particular city. The cities are in a desperate need of finance for carrying out the reviving projects. But the previous schemes and projects by the municipalities and state governments have failed miserably on the grounds of implementation (ie, time management) and utilization of funds. So there is a need to gather finance for the reviving project for the curbing infrastructure .The story does not end here, there is also a need to govern the utilization of fund.There is a new scheme which is growing popularity by the Government of India along with State government and the municipalities. The buzz word in this scheme is the governance of the project because there is a proper channel how to control the funds issued by the government. Also the government of India will regularly monitor the implementation of the project. Along with this there is a unique proposal of submitting the CDP (City Development Plan) for approval.So our approach would be to find a method of relating the increase in population and need of the same in coming 20 years as well as to arranging and managing finance considering all the factors like inflation, operation and maintenance cost. For this we would study CDPs of various cities and also study their approach in solving the future infrastructure problems. Also we would compare various CDPs and comment on their efficiency.Since we are talking of CDPs preparation and involvement of private parties we will try some case study and prepare the financial appraisal of the same. We would critically analyze whether the project is financially feasible under JNNURM (Jawaharlal Nehru National Urban Renewal Mission) scheme1.3.1 Literature review and the pilot studyThis literature review the following subject of IndiaCity Development planFinance scheme for city development planPPP procurementJNNURM SchemePilot Study consists of Theoretical approach. Study of a practical approach to prepare CPD for water supply project under guidelines of JNNURM scheme toolkit.1.3.2 Main StudyCase study- Feasibility of water supply project under JNNURM scheme using Financial appraisal calculation and role of PPP in such project. The name of the city under case study has been changed due to sensibility of the case as it is live project. The name of the city will not effect on research subject of development of financial appraisal model because scenario is well detailed.The approach of this study by Quantitative and AnalyticalComparison of CPD between different states selected 4nos of states for comparison.The approach is Quantitative by reading the CPDs of different states and comparing them.1.3.3 Writing UpChapter-1 -IntroductionChapter-2-City Development PlanChapter-3-Private PartnerChapter-4- JNNURM SchemeChapter-5 - Case StudyChapter-6- Comparison of CPD between different statesChapter-7-Conclusion2 City Development Plan2.1 Geographical Information29 states and 6 union territories*Andaman and Nicobar Islands*Lakshadweep*Andhra PradeshMadhya PradeshArunachal PradeshMaharashtraAssamManipurBiharMeghalayaChandigarh*MizoramChhattisgarhNagalandDadra and Nagar Haveli*OrissaDaman and Diu*Pondicherry*DelhiPunjabGoaRajasthanGujaratSikkimHaryanaTamil NaduHimachal PradeshTripuraJammu and KashmirUttaranchalJharkhandUttar PradeshKarnatakaWest BengalKerala* Union territory2.2 DemographyTable 1 India Development IndicatorAccording to a United Nations study (1995), by the year 2015, ten of the worlds fifteen largest cities will be in Asia (excluding Japan) three of these will be in India. In 1950, this same region claimed only three of the worlds fifteen largest cities, whilst India claimed only one.These projections suggest that demographic growth in Indias large cities will be high, partly due to national p opulation growth and partly due to immigration. The logistic model used by the United Nations, the World Bank, and other international agencies for the projection of urban population world-wide suggests that India is poised for rapid urbanisation, along with several other countries in south and East Asia. SIZE As per Census 2001, only 28% of the 1.1 billion Indians live in urban areas. Expected to increase to 40% by 2021. About 60% of the countrys GDP originates from urban areas. Allocation of US$12 billion by the Government of India under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) for a period of 7 years for improving urban infrastructure across 63 cities. Key metro cities Mumbai, Kolkata, Delhi, Bengaluru, Chennai, Hyderabad and Ahmedabad allocated 47.5% percent of these funds.STRUCTUREJNNURM functions under the overall guidance of a National Steering Group (NSG) which comes under the purview of Ministry of Urban DevelopmentJNNURM is aimed at fast-track planned d evelopment of identified cities. Key highlightsIntegrated development of urban infrastructure projectsRenewal and redevelopment of inner city areasProvision of basic services to urban poorFunds to be channelised through Urban Local Bodies who will be responsible for implementationImplementing agencies to leverage sanctioned funds to attract private sector investments through PPP contractsOutlookInvestments of more than US$50 billion would be required in the next 5 years to improve and build urban infrastructureJNNURM is the single largest initiative of Government of India for planned development of citiesOpportunity for private players to partner with Urban Local Bodies (ULB) in development of urban infrastructure such asWater supply and sanitationSlum redevelopmentUrban transportation including roads, highways, expressways, Mass Rapid Transport Systems (MRTS) and metro projectsSolid waste managementPOTENTIAL A large component of development work will be through public-private partn ership. Water supply and sanitation in urban areas to attract investments over US$30 billion.POLICY100% FDI under the automatic route permitted for townships, housing, built-up infrastructure and construction-development based projects subject to minimum scale normsJNNURM will provide grants/viability gap funding for projects2.3 ProblemsUrban Local Bodies (ULBs) of India are the constitutionally provided administrative units that provide basic infrastructure and services in cities and towns. According to Census of India 1991, there are 3255 ULBs in the country classified into four major categoriesNagar NigamsNagar PalikaaNagar PanchayatsLarge urban areas are governed by Nagar Nigams, often simply called corporations. The area under a corporation is further divided up into wards. Individual wards or collections of wards within a corporation sometimes have their own administrative body known as ward committees.Smaller urban areas are governed by Nagar Palika, which are often referred to simply as municipalities. Municipalities are also divided into wards, which may be grouped together into ward councils. One or more representatives are elected to represent each ward.What is worse, many ULBs have accumulated large debts and face serious problems in servicing them. Besides the restriction to a small resource base poor planning process, lack of periodical revision of municipal tax rates / user charges, and poor information system and records management are some of the basic weaknesses in the present municipal administration. TheInfrastructure Problem In spite of its prominent role in Indian economy, urban India faces serious problems due to population pressure, deterioration in the physical environment and quality of life. According to estimates nearly one third of the urban India lives below poverty line. About 15 percent of the urbanites do not have access to safe drinking water and about 50 percent are not covered by sanitary facilities. There is a huge and wide ning gap between demand and supply of essential services and infrastructure. 2.4 Schemes for development of urban developmentThe ongoing schemes of Urban Infrastructure Development in the mega cities, and Integrated Development of Small and Medium Towns (IDSMT) do not meet the requirement of infrastructure development of all cities/towns in the country. There is, therefore, need to have a comprehensive scheme for infrastructure development of all cities/towns in the country. Other scheme like Urban Reforms Incentive Fund (URIF) also needs to be subsumed in the said comprehensive scheme. Funding is linked to reforms which are classified into mandatory and optional as detailed belowMandatory ReformsState levelRepeal of Urban Land Ceiling and Regulation ActReform of Rent Control Laws so as to stimulate private investment in rental housing schemes.Rationalisation of Stamp Duty to bring it down to no more than 5 per cent within the next five years.Introduction of independent regulators f or urban services.Mandatory Reforms Core (at ULBs level)Double entry system of accounting for Urban Local BodiesAdoption of public disclosure law disclosure of medium-term fiscal plan and quarterly performance reports.Passage of community participation law.All special agencies currently involved in delivering urban civic services to be brought under the supervision of ULBs, thus creating a uniform accountability platform.A Bangalore Action Task Force (BATF) kind of citizens technical advisory group should be constituted for each city to guide the process of urban reforms.Urban development authorities discharging city Planning functions and the new city development function should associate the ULBs more closely.Introduction of e-governance, Global Information System (GIS) and Monitoring Information System ( MIS)Reform of Property Tax laws.Levy of reasonable user charges.Optional ReformsRevision of byelaws to streamline the approval process.Simplification of legal and procedural fra meworks for conversion of agricultural land for non-agricultural purposesIntroduction of Property Title Certification System in ULBs.Earmarking at least 20-25 per cent of developed land in all housing projects for the poor.Introduction of computerized process of registration of land and propertyRevision of bye-laws to make rain water harvesting mandatoryBye-laws for reuse of reclaimed waterAdministrative reforms, i.e. right sizing of the ULBs.It is important to note that the contribution of urban sector to GDP is currently expected to be in the range of 60 percent. In this context, enhancing the productivity of urban areas is now central to the policy pronouncements of the Ministry of Urban Development. Cities hold tremendous potential as engines of economic and social development, creating jobs and generating wealth through economies of scale. They need to be sustained and augmented through the high urban productivity for countrys economic growth. National economic growth and pover ty reduction efforts will be increasingly determined by the productivity of these cities and towns. For Indian cities to become growth oriented and productive, it is essential to achieve a world class urban system. This in turn depends on attaining efficiency and equity in the delivery and financing of urban infrastructure.Resource GapThe 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. Where as funds to that extent are not available. To overcome these constraints and challenges, the Ministry of Urban Development has initiated institutional, fiscal and financial reforms. First generation urban sector reform known as the 74th Constitutional Amendment Act of 1992, recognizes the principles of local self governments and empowers urban local bodies with financial resources through Central Finance Commission and State Finance Commissions. Subsequently , in order to strengthen these local bodies, second generation reform have also been started. In the last decade, enormous progress has been made in removing impediments to efficient investment.Resource Mobilization EffortIn August, 1996, the Central Government guidelines entitled Urban Development Plans Formulation and Implementation were circulated to all State Governments for adoption. These guidelines, apart from other issues, suggest innovative approaches for fiscal resource mobilization. In the backdrop of the New Economic Policy, it was suggested that the traditional system of funding based on Plan and budgetary allocations be reduced and ultimately withdrawn due to fiscal deficit.Subsidies need to be rationalized and urban development plans and projects need to be placed on a commercial format by designing commercially viable urban infrastructure services and area development projects. This can be achieved by restoring a proper match between functions and source of revenue b y giving additional tax measures. Other innovative resource mobilization measures include using land as resource, increase in the non-property taxes and using public private partnership in service delivery.2.4.1 Second Generation ReformsRegulatory FrameworkThe participation of the private sector in financing and the delivery of infrastructure at the municipal level, especially in the water and sanitation sector, require a regulatory framework to protect consumers, apply environmental standards and support the delivery to the poor. As there are a variety of models of regulation from centralized to decentralized systems, guidelines will be developed at the National level to ensure consistency across the country. Appropriate training programme and capacity support to regulators will also be developed in partnership with the private sector and urban research institutions.Model legislationThe Central Government is in the process of preparing model legislation for facilitating private sec tor participation in urban infrastructure. This is necessary as the present legislative scenario does not encourage private sector participation in this field. A model Municipal Act which will be recommended to the State Governments would include modification and simplification of Municipal bylaws, provision for enhanced borrowing, allowing the entry of private sector and authorizing concessionaires to penalize users for non payment of tariffs.Municipal Accounting SystemThe Task Force constituted by the O/o CAG of India had recommended for introduction of accrual basis of accounting system for the urban local bodies (ULBs) and suggested model budgeting and accounting formats for that purpose. The Task Force Report was circulated to all States/UTs for adoption of accrual basis of accounting system as well as the budget and accounting formats. Further to provide a simplified tool kit to the ULBs for recording the accounting entries, Ministry of Urban Development in cooperation with th e Office of CAG of India has prepared a National Municipal Accounting Manual (NMAM) and circulated to all States/UTs in January, 2005.The Manual comprehensively details the accounting policies, procedures, guidelines designed to ensure correct, complete and timely recording of municipal transactions and produce accurate and relevant financial reports. The NMAM would help the States prepare their state-level accounting manuals in accordance with their own requirements for use by the ULBs. This initiative is expected not only to enhance the capacities of ULBs in municipal accounting leading to increased transparency and accountability of utilization of public funds for the development of urban sector but also will help in creating an environment in which urban local bodies can play their role more effectively and ensure better service delivery.Public private partnership guidelinesCentral Government will develop guidelines for involvement of the private sector in infrastructure, which will ensure competitive biding process in a transparent manner. These guidelines will not only protect the consumers but also ensure integrity of the process. This would support municipalities in designing the PPP process on the lines of the BOT Centre in Philippines or the PPP in the Ministry of Finance in South Africa. Chapter4 included the issues related to PPP.2.4.2 Fiscal incentivesForeign direct investment (FDI)Hitherto Foreign Investment Promotion Board (FIPB) allowed direct investment in providing urban services on a case to case basis. This scenario has changed with the decision of the Central Government removing restrictions on FDI in urban infrastructure facilities which are now open both under FIPB and the automatic route as per sector specific guidelines. Guidelines have since even issued for FDI in development of integrating township including housing and building material.External assistanceSince independence, externally assisted urban sector projects have accounted for US$ 2300 million. A review of these projects indicated a need to adopt a programme approach rather than a project approach for availing external assistance. It also indicated the need to encourage a multiple donor scenario and tapping low cost funds for urban infrastructure.Tax free municipal bondMunicipal bonds were successfully issued by several Municipal Corporations like, Bangalore, Ahmadabad, Ludhiana, Nagpur, Nasik, and Madurai for raising resources for urban infrastructure. The Central Government had announced tax exemption in case of bonds issued by Municipal / Local Governments. Guidelines were issued by this Ministry on 8.2.2001 for regulating issue of tax free municipal bonds. Under the guidelines, such bonds will be issued for raising resources for capital investment in creation of new infrastructure as well as augmentation of existing systems. Tax free bonds worth Rs. 100 crore by Ahmadabad Municipal Corporation have been permitted for improving infrastructure. Hyde rabad Municipal Corporation has also been permitted to issue tax free municipal bonds for Rs. 82.5 crore.Pooled financing for municipal infrastructureTraditionally, municipal corporations and urban local bodies have relied on subsidized funds for providing urban services which constraints the constraints the introduction of user charges and efficient project operation and maintenance. In view of the huge resource gap, direct access to capital market would now be an accepted viable option. However, access to capital market requires financial discipline and enhanced credit rating. It has been the experience that only bigger municipal corporations are in a position to take the advantage of the resources available in capital market.Medium and smaller municipalities are unable to do so due to weak financial position and lack of capacity to prepare viable project proposals. A State level pooled financing mechanism is being proposed for smaller and medium municipalities. The objective of a State level pooled finance mechanism is to provide a cost effective and efficient approach for smaller and medium sized ULBs to access the domestic capital markets for urban infrastructure and to introduce new institutional arrangements for mobilising Urban Infrastructure Finance.City RestructuringGovernment of India is also encouraging citywide reforms and restructuring so as to ensure that cities are managed efficiently and become creditworthy (to attract private finance ) which will enable them to prepare long term plans for infrastructure investments and implement poverty alleviation programmes.Citywide reforms and restructuring will, however, result in significant transaction costs during the period of transition. Leaving cities to finance these costs by themselves will delay and make it difficult to implement these reforms. It is to partly offset this disadvantage that the Ministry of Urban Development is proposing to set up a performance based City Challenge Fund for catalyz ing city level economic reform programmes. The resources from the Fund would be given as grants but should ideally be matched by equal allocations either from the cities themselves or from the respective State governments. Access to the fund would be on a competitive basis.Establishment of an urban academyThe proposed Urban Academy is visualized as a centre of excellence in Urban Matters such as urban water supply, sanitation, urban transport, urban governance, municipal finance, etc. It will be a n ideal town-planning habitat, wherein experts from India and abroad can experiment with new layouts, building materials, landscaping, heritage preservation etc., and it will have Synergic links with all other institutions specializing in urban matters. This will coordinate all Training and Capacity Building Initiatives and effort of change management forums.ConclusionIn conclusion, it is evident that the New Economic Policy launched in India in 1991-92, did see several important initiativ es 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.Public Private PartnershipProcurement addresses how the industry organizes itself to deliver construction projects. Contracts define the rules governing the relationships between the many organizations involved in each project.Construction industry clients are faced with a perplexing array of skills and resources which must be combined effectively to develop a building (or other constructed facility) that will fulfill their needs. All but the simplest of buildings involve the management, design, assembly and commissioning of large amounts of raw materials using appropriately-skilled labor provided by multiple organi zations over a long period of time. The flow of money between Organizations must be formally organized, as must the distribution of responsibility and risk among them.While the technical complexities of the design solution itself are addressed by the specialized skills of construction industry members, the interaction of these organizations must be structured by the selection of an appropriate procurement route and the effective administration (i.e. day to day running) of the associated form of construction contract. At the project outset, clients will usually seek advice on the selection of a procurement route to bring the required organizations together.Figure 1 Example of a cost and Time Overruns in Public Sector Projects.In response to these problems, two key joint industry and government reports were published to stimulate innovation in construction industry practice the Latham Report in 1994 and the Egan Report in 1998.In the first report Constructing the Team Sir Michael La tham commentedImplementation begins with clients. Clients are at the core of the Process and their needs must be met by industryRethinking Construction proposed five drivers for change in the construction industry1. Committed leadership2. A focus on the customer3. Integrated processes and teams4. A quality driven agenda5. Commitment to peopleIn the public sector, HM Treasury launched the Achieving Excellence in Construction initiative in 1999 to improve the performance of Government in its client role by publishing Achieving Excellence in Construction Procurement Guides 11 which addresses the following issues1. Initiating action2. Project organization3. Project procurement lifecycle4. Risk and value management5. The integrated project team6. Procurement and contract strategies7. Whole-life costing8. Improving performance9. Design quality10. Health and safety11. SustainabilityPublic sector clients are generally concerned with certainty of budget and quality and, above all else, ensur ing public accountability as they are spending public money.Clients who build regularly perhaps continuously can be considered experiencedConstruction projects can be structured in a variety of ways as No single procurement route is suited to all situations and so is required to link the Clients business requirements before an appropriate project structure can be recommended.The Office of Government Commerce defines these terms as follows 1Procurement strategy The procurement strategy identifies the best way of achieving the objectives of the project and value for money, taking account of the risks and constraints, leading to decision about the funding mechanism and asset ownership for the project. The aim of a procurement strategy is to achieve the optimum balance of risk, control and funding for a particular project.Procurement route The procurement route delivers the procurement strategy. It included the contract strategy that will best meet the Clients needs. An integrated proc urement route ensures that design, construction, operations and maintenance are considered as a whole it also ensures that the delivery team work together as an integrated project team.Figure 2 The relationship of procurement strategy to procurement routeA Public Private Partnership (PPP) is an umbrella term for arrangements agreed often with legal force between public and private sector organisations to their mutual benefit.The Private Finance Initiative (PFI) is one form of PPP developed by the Government in which the public and private sectors join to design, build or refurbish, finance and operate new or improved facilities and services to the general public. PFI schemes generally involve a consortium of private sector companies, who collaborate to form a Special Purpose Vehicle (SPV) which then contracts with the public sector to provide services such as hospitals, schools and roads to specifications provided by public sector bodies.3.1 Procurement method issuesConstruction i ndustry has complex analysis mere by dual component of land and building. It has fuzz boundaries. The fragmentation of the industry between contractor, consultant, project management etc creates the industry highly volatile. It can also be argued the reduction of professionalism if it is at only contractor. So it is expected to carry multitude of negative aspects of Investment which is derived from present consumption. In Economics term Investment is the process of trading present consumption for new capital. Present trading can be alternative to investment in other than the construction industry.Individual participant have significant approach to price and quantity.This definition illustrates several key characteristics of PFI schemesA service, rather than capital assets, is purchased.PFI schemes run for a long time. The public sector typically requires procures the provision of a service over a 25 to 35 year period.Buildings or other infrastructure is usually constructed by the pr ivate sector as a consequence of the need to provide the agreed service. The PFI agreement will define the level of service required (such as providing a maintained, lit, warm, clean and catered hospital, for example) and the private sector will finance the design and construction of new or adapted facilitates as necessary to accommodate that service.Because the public sector is purchasing a service, rather than assets, it will not own those assets unless the transfer of their ownership is agreed when setting up the scheme (see Section 6.6.5).Subject to any specification imposed by the public sector client, the private sector is free to use whatever means it considers appropriate when constructing the assets. This can lead to design quality and performance shortcomings (see Section 6.6.4).The private sector puts itself at risk when securing the finance required to construct any capital assets required by the scheme. In return, it will expect to be paid for managing this risk. This r aises the overall cost of PFI schemes above that of non-PFI procurement where financing risks are minimal as they are borne by the public sector with funding traditionally provided and underwritten by the Treasury.3.2 Role of PPP in InfrastructuresIn the projects from the Public Private Partnership (PPP) and Private Finance Initative (PFI) programmes, the public sector contracts to purchase services rather than any particular building from the private sector in the long term. The delivery