Finmin limits WB infra aid to 1 bn

http://www.financialexpress.com/news/finmin-limits-wb-infra-aid-to-1-bn/547146/0#


Kakoly Chatterjee
Posted online: Nov 28, 2009 at 2340 hrs

New Delhi The finance ministry has turned down the urban development ministry’s proposal for a $5-billion World Bank loan for revamping the infrastructure of Indian cities under Jawaharlal Nehru National Urban Renewal Mission (JNNURM).

Concerned about the country’s external debt position, the ministry has scaled down the multilateral loan component of the mission to $1 billion. North Block’s views were conveyed to the nodal ministry for JNNURM at an inter-ministerial steering committee meeting recently, an official source said.

Urban development ministry wanted $5 billion (Rs 25,000 crore) in order to include more cities and more projects of existing cities. Currently, 65 cities with population of 1 million and above are included in JNNURM. With fresh fund infusion, the urban development ministry was hoping to include 25 cities which have above half a million population according to 2001 census.

“With no new funds being infused in the mission, the fate of the 25 cities is in jeopardy. We cannot include new cities or sanction more projects of cities that have submitted more projects after exhausting their initial funds,” a source in the ministry said.

The World Bank funding is expected to reach India in the 11th Plan Period. “We are expecting a funding of $1 billion (Rs 5,000 crore) to reach us by early 2011,” sources said.

Meanwhile, with World Bank funding coming in, JNNURM implementation has undergone slight modification. “The schemes would run on JNNURM pattern but a couple of related projects would be clubbed together. For instance if it is a water sanitation project then recycling and sewerage would also be included to treat it as a single project. The idea is to have a holistic approach. It would include improved water supply, distribution efficiencies, round the clock access to drinking water, waste recycling, sustainable models of sewerage schemes & tariff mechanism and efficiency parameters for the body handling water supply,” officials said.

Initially, the World Bank had insisted on revamping a city completely than running one project at a time. The ministry, however, suggested that a scheme should run on JNNURM pattern without major modifications. The ministry runs two schemes under the mission that include urban infrastructure and governance (UIG) and urban infrastructure development of small and medium towns (UIDSSMT). Of a total allocation of Rs 31,500 crore, a sum of Rs 9,500 crore has been released under UIG against the commitment of 75% funding.For UIDSSMT, Rs 6,000 crore has been released so far out of a total allocation of Rs 11,400 crore against a commitment of 90% fund.

Transforming Kohima

Transforming Kohima

morungexpress

http://www.morungexpress.com/editorial/32319.html

The Government of India has recently signed the Asian Development Bank loan agreements relating to the North Eastern Region Capital Cities Development Investment Program (NERCCDIP). Under the agreement, ADB will extend $200 million for capital cities of the north east for their development programmes. The first tranche of this project amounts to $30 million. This will be disbursed with the objective to improve quality of life for 1.2 million people and enhance urban productivity in the five capital cities namely Agartala (Tripura), Aizwal (Mizoram), Shillong (Meghalaya), Kohima (Nagaland) and Gangtok (Sikkim). The urban development ministry, through the respective state governments, would be the executing agencies. This is indeed good news for people of Nagaland as its capital Kohima has all the potential to become a world class heritage city for which much work needs to be done. Funds being the constraint, the ADB loan if utilized properly provide a golden opportunity to make Kohima the pride of all the Nagas.
Given that the ADB program will be one of the largest externally-funded infrastructure investments ever seen in the region, the Nagaland State government must ensure outmost transparency and accountability because this is an international project and the prestige and image of the Naga people is at stake. We should demonstrate sincerity, efficiency and cooperation during the period of the program. Nagaland in particular has suffered from a dearth of investment because of its “remote, mountainous location, long distance from markets, high levels of poverty and unemployment and limited private sector interest”, as stated by the ADB in its statement. Hopefully the new investment opportunity will not go for a miss and be properly utilized towards its stated objective. It is of outmost importance to properly plan and develop our urban centers like Dimapur and Kohima. For instance, the urban growth rate of Nagaland is quite alarming which can be gauged from the number of vehicles squeezed on roads build almost a quarter of a century ago.
The main problem we are facing today is that infrastructure has not grown proportionally with the ever increasing population growth so much so that the growing size of our towns beyond their holding capacities is witnessed by the present day overcrowding, lack of adequate housing, encroachment, mushrooming of slums and settlements, lack of civic amenities and not to mention the road congestion and resultant traffic jams and pollution.
Considering the deficit in terms of infrastructure growth, the growing urban population of Nagaland accounting for about 17.74% of the total population of the State, indeed reflects the enormity of challenges that lies ahead. The concerned people in the government as well as the public at large should realize the magnitude of this crisis and do whatever is necessary. Likewise, the municipal bodies in the respective towns will have to play an important leadership role. For the immediate though, the opportunity provided by the ADB loan should be used to create the appropriate infrastructure. And as stated by the ADB besides the physical improvements, strict mechanism must be put in place to ensure good governance, finance and service delivery reforms and a capacity-building programme to support the implementation of NERCCDIP and the urban reform agenda. People of Nagaland particularly Kohima, don’t miss this golden opportunity.

JNNURM-II Failure is its own reward for MoUD

JNNURM-II

Failure is its own reward for MoUD

Indian city-dwellers, rejoice! JNNURM Mark Two is coming your way – bigger, brighter, bolder than its first avatar – more money, more reforms, more public-private partnerships, more contracts, more consultancies, more scams, and many many more creative reinterpretations of urban reality.

But how has this happened, you ask? Did JNNURM Mark One get where it was supposed to go? Did we not hear that it was facing criticism from several quarters, not just from chronic dissenters like the activist brigade? Did we not see respectable-looking middle-class citizens in some cities rubbing shoulders with scruffy activists and working-class types in street protests against some of the “reforms”? Wasn't there a notice in the papers inviting tenders from individual experts for carrying out the mid-term review of the programme? And wasn't there a rumour that some cheeky citizens were actually mounting their own home-made review? What happened to all of that?

Good questions. And there are plenty of answers. There's just one problem - the answers don't add up.

Let's do a flashback to the Prime Minister's speech at the star-studded JNNURM launch in 2005. “Our urban economy has become an important driver of economic growth” said the PM. “It is also the bridge between the domestic economy and the global economy. It is a bridge we must strengthen. The latent creativity and vitality of our cities and the people who live in them must be tapped to facilitate higher economic growth.”

JNNURM was unveiled as the miracle makeover that would enable 64 of our cities to become candidates in the global swayamvara where corporate investors prowl in search of the perfect marriage between their capital and the “creativity and vitality” of cities. This makeover was to be accomplished in a mere seven years, through a simple but brilliant strategy – polishing up and enhancing the physical infrastructure to bring it up to global standards, and simultaneously getting rid of the ugly evidence of the disorderly and less-than-perfect processes of urbanisation of the past.

JNNURM cities, we were told, would be clean, green and beautiful – cleansed of the shanty-towns and unauthorised housing colonies, the noisy pavement markets, the primitive rickshaws and polluting phat-phattis, the street vendors selling unstandardised products at ridiculously low prices, the higgledy-piggledy old neighbourhoods, the stinking landfills, the junkyards, the unhygienic dhabas. In their place would be multilane highways and toll roads, low-floor buses and elevated metros, gleaming malls and food courts, huge airports, high-rise housing, parks and promenades....in short everything gratifyingly like “phoren”.

Of course a lot of the rules would need to be rewritten – after all, it would not be appropriate to leave the management of these new global cities in the hands of the old guard, especially when the World Bank and the ADB were telling us how much better market forces were at running cities than anyone else. And no doubt it was entirely in the rightness of things to turn to these same old friends, ever ready with a loan, to underwrite the programme that would put their advice into practice. Needless to say, everything would be done in accordance with the best principles of good governance – online consultations, young professionals and corporations bringing in energy and initiative to design efficient services for the poor, the brightest and best bureaucrats given a free hand and a generous kitty to get things moving, and an impressive brains trust of experts and luminaries from the NGO world to provide technical advice and inject the civil society perspective into implementation.

Of course there were critics and prophets of doom (those self-important activists again). The Urban Development Ministry did not waste any time in responding to irritating questions from this known bunch of World Bank-baiters. The scheme was rolled out in grand style – of the total kitty of Rs. 50,000 crores, 463 projects worth Rs. 49743.46 crore were approved in three years and Rs. 8253 crore was released from the Centre to the States.

Cut to the present

3 June 2009. Speaking to a reporter from the Wall Street Journal, some officials of the Ministry of Urban Development (who refuse to be named) come out with an alarming statistic - only 32 of the 463 sanctioned projects have been completed in the three years since the scheme was launched. In case anyone should think of using this statistic as a stick to beat the Ministry or the scheme itself, the informant hurries to add that this dismal performance is entirely the fault of the States, which had been far too slow and clumsy in acquiring land, shifting existing structures and populations and acquiring the professional competence to handle large projects[1].

Surely, you say, regardless of who is responsible, this qualifies as a big-time fiasco? Apparently not. Speaking to reporters on the sidelines of a meeting on 10 June, the Secretary Urban Development was quoted as saying just the opposite. "There is definitely good progress made under the mission. Many of the projects (like drainage and sewerage) would not have been taken up otherwise," said Dr. Ramachandran.[2]

Dr.Ramachandran is not alone in his complacence. Vinayak Chatterjee, chairman of the National Infrastructure Council of the Confederation of Indian Industry and chairman of consultancy firm Feedback Ventures, is quoted in the same piece as saying "It is a very well crafted intelligent innovative programme. The pity is that the states and city administrators have not been proactive in pulling more funds out of the mission."

All of 32 projects in 64 cities in three years, and they manage to attract so much praise? Why are we not impressed?!

Strangely, and most unusually, this is one instance where the statistics shared by the unnamed Ministry source are actually endorsed by the folks on the other side of the fence. A Citizens' Review of the JNNURM, undertaken in 16 cities by a coalition of community groups – grassroot activists, workers' organisations, NGOs working in informal settlements – found yawning gaps between the issues prioritised in the City Development Plans and sanctioned projects, and between the sanctioned projects and the real situation on the ground. In the overwhelming majority of cities and locations, there was absolutely no physical evidence of any kind of developmental activity – not even a signboard to mark the fact that this was a JNNURM project site.

But Mr.Ramachandran is unfazed. The judgements of mere citizens regarding the success or failure of the programme are neither here nor there if the people who count are happy. On 29 June, the Ministry of Urban Development announced that a follow-up phase of JNNURM was under serious consideration. According to the Ministry spokesperson, more investment was required to reach the targeted levels of infrastructural growth. The proposed JNNURM Mark II will have a seven-year lifespan, a kitty of Rs.100,000 crores – twice the size of the present JNNURM. The new scheme will replace the present one, and will expand its reach all the way down to the level of mofussil towns with populations of 500,000, in addition to providing “top-up funds” to ongoing projects. The scheme has already been forwarded to the Finance Ministry, and the Ministry of Urban Development is hopeful of seeing it incorporated as one of the highlights of the Budget 2009-10. The World Bank, it appears, has already given its nod to the proposal.

Of course there is the small matter of the mandatory mid-term review before the World Bank signs on the dotted line and shells out the promised Rs.50,000 crores. Somewhere along the way, the tender for the consultants seems to have been dropped off the agenda. We can only speculate on the reasons. Maybe it was considered too risky? After all, even the best consultants have been known to sometimes bite the hands that feed them!

But the Ministry has found the perfect solution – a review by the Prime Minister, no less, assisted by a National Review Committee comprising that tried and trusted band of experts, the JNNURM Technical Advisory Group. In order to bring it up to speed for this onerous task, the TAG has been beefed up with the addition of three new members: Professor Amitava Kundu of JNU (whose credentials as an urban theorist are impeccable); Nandan Nilekani (whose persuasively imagined idea of India is completely in tune with the JNNURM ethos); and Roopa Purushottaman, described in her official bio as “the chief economist and strategist at the Future Group, India’s leading business group that caters to the entire Indian consumption space”. In case you are wondering about Ms.Purushottaman's qualifications for reviewing an urban development programme, we should point out that the Future Group is the corporate umbrella for a retail empire that includes Big Bazaar, Home Town, Capital and Food Bazaar.

We can all rest assured that the review process is in safe hands and will surely result in a well-argued case for JNNURM-II.

Buoyed up by the assurance of continued largesse in a era where everyone else is cutting down on spending, the corporate sector is regaining its faltering enthusiasm for urban renewal. Experts and visionaries are emerging from unexpected quarters, enthusiastically taking the lead in articulating a vision for the future of our cities.

Take a look, for instance, at the blurb for a conference organised by CII in Delhi on 18 June. “Commonwealth Games 2010 is round the corner and the capital is in the midst of a make-over as the city prepares for the biggest sporting event in its history. Will Delhi seize the chances offered by Commonwealth Games 2010 to boost its economic, social and cultural development. The time is ripe for the city to be transformed into a “World Class City” - what is required is a vision” says the CII.

Apart from the usual smattering of ministers and bureaucrats, there were several distinguished experts on various panels: Mr. Navin Raheja of Raheja Developers and Mr. Sudhir Vohra of Sudhir Vohra Consultants in the panel on the Delhi Master Plan; Mr. Sanjay Sharma of Coca Cola in the panel on water supply; Mr. Arjun Walia of Walsons Security Services in the session on public safety and Mr.Ajay Jadeja, sports personality in the session on “action planning for a better tomorrow”.

As for the rest of us, we can hold our tongues and wait for that better tomorrow

KALYANI MENON-SEN

New Delhi

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[1] Rahul Chandran. 3 June 2009. JNNURM projects lag over land, utilities and personnel problems. Livemint.com,

[2] Vandana Gombar. 10 June 2009. Government may double size of JNNURM. Business Standard.

Indian middle class affected by Urban reforms?

The opposition to the impact of reforms seems to be spreading like an epidemic from Surat to Guwahati and from Bangalore to Hyderbad, Mysore and Mumbai to Delhi. One of the crucial concerns of the middle class land owner is how to pay the increasing property taxes. The Unit area method introduced as an urban reform by the MoUD, GoI under JNNURM is causing the biggest difficulty for the urban middle classes since the rates of tax are now indexed with the land rates which have appreciated hugely compared to when they bought the plot / land. So in turn, now even with some depreciation the plot-owner ends up paying a huge property tax plus vacant land tax.

First Lok Sabha Post-JNNURM election

15th Lok SABHA MP's must debate JNNURM

1. In 2005 before the JNNURM launch, OUR MP's never debated the mandatory and optional conditions which were part of reforms package.
2. Since these conditions were thrust upon the states who needed to enter a tripartite MoU with the Union, State and City governments being signatories, there is a need to debate the conditions of the reforms.
3. These reforms were essentially a sop to the lobbies of Finance, Insurance and Real Estate (FIRE) who had been demanding the same for a long time and still continue to do after 5 years of huge profits.
4. The 15th Lok Sabha MP's must undertake a wide ranging public consultation process on the success/ failure of JNNURM !
5. Urban areas have been developed in extremely inequitous manner.
6. Costly and expensive Facilities are being provided to rich and elite people who get massive tax concessions (www.cbgaindia.org) in excess of Rs 300,000 crores / year for the last 4 years 2004-08.
7. Projects must be prepared on priority to fulfil the essential needs services of the masses, the urban poor and the lower middle class.
8. Funding for the same should also be provided adequately.
9. Property taxes must not be escrowed to give an opportunity to payback investors THIS IS NOT ACCEPTABLE. They must be invested in basic needs of the electorate such as drinking water, proper roads, air quality maintenance and pollution control.
10. Social Audit and monitoring that the funds must not be misused is to be introduced as a peoples initiative.
11. The GoI's 11th Plan document pushes back the date for achieving the urban drinking water targets to 2012. This needs to be relooked at and targets must be fulfilled earlier.
12. Development cannot happen for the rich only leaving the poor behind.

Development needs in Urban India

How is it possible for successive ruling Indian Union Govts to continue to spend large sums of money every year without fulfilling the goal of providing basic amenities to all?
It is because there are various advocates who want a priority allocation of funds and who want to ensure that funds are diverted to INFRASTRUCTURE.
Does this really boil down to a fight for funds between essential services and subsidies for the cement, steel, sand, concrete and construction industry?
Will a poor citizen not get the basic needs like food and drinking water if he cannot afford it? Can a policy which is formulated like this be constitutionally correct even if it violates fundamental rights?

The right to food and right to water should be the main first priority for all who vote and also all who are elected.

Why is JNNURM such a big failure now?

In JNNURM a huge amount of funds (Rs. 55,000 crs) was allocated to projects by the Ministry of Urban Development, since each city corporation already had a number of projects waiting for funds. These projects were not prepared by local governments through identifying people's basic needs but generated by consultants and project proponents and developers etc. This JNNURM scheme has come to mean many different things for various sectors.
Becoz it does not cater to local essential needs like household level water supply, but only concentrates funds and resources on big-ticket infrastructure projects, JNNURM is responsible for the violation of basic human rights.
This is exactly why JNNURM is such a big failure now. It only set out to benefit a chosen few and not the aam admi at all.