NITI Aayog, the premier think tank of the Government of India, partnered with the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and the Asian Development Bank (ADB) to host a South Asian regional conference at PravasiBharatiya Kendra in the capital today to discuss the key issues, perspectives and the way forward in the Urban Infrastructure.

The two day conference on “Urban Infrastructure: New Approaches to Public & Private Partnerships and Municipal Finance Innovations”, being held on November 15-16, was inaugurated by CEO, NITI Aayog, Amitabh Kant, Secretary, Department of Economic Affairs, Ministry of FinanceSubhash Chandra Garg. UN Resident Coordinator in India,YuriAfanasiev, Country Director, ADB India Kenichi Yokoyama, and Director & Head, UNESCAP S&SW Office, Dr Nagesh Kumar were present on this occasion.

Union Minister of State (Independent Charge) in the Ministry of Housing and Urban Affairs), Shri Hardeep Singh Puri addressed the closing session on Day One of the Conference and received the rapporteurs' presentations, summarising best practices related to new approaches to PPP & Municipal Financing.

In the inaugural address, CEO NITI Aayog, Amitabh Kant emphasized upon the need to ensure adequate return on investments in infrastructure through properly structured Special Purpose Vehicles (SPVs) and de-risking of projects. He  said that  it is required to evolve unique models and systems of urban planning which are creative, innovative and sustainable, and suited for South Asian countries.

Secretary, Department of Economic Affairs, Ministry of Finance, Subhash Chandra Garg emphasised on the need to decentralised urbanisation, with porous boundaries between urban & rural areas as the key to sustainable urbanisation. He said that the future areas of growth & development are infrastructure & digitalised delivery of goods & services.

Considering the quantum deficit in infrastructure implementation today vis-à-vis the demand, it is extremely imperative to focus on newer means of implementing and financing urban infrastructure. In India alone, until 2040, estimated investments of around $4.5 trillion are required in the infrastructure space. With respect to urban needs, the population in South Asia is expected to grow by around 250 million till 2030, while that in India is expected to reach around 590 million during the same period.

There are an estimated 98 million people who reside in the slums of Indian cities and are disproportionately deprived of access to basic services and infrastructure. These gaps must be addressed, so that the cities grow equitably and in an environmentally responsible way.

Background:

The South Asian regional conference is a first of its kind, with participation from across the South Asian region including leaders from the government, industry, research organizations, academia, think tanks and civil society. The Conference aims to review overall issues and assess the sustainability of PPPs and urban finance in South Asia, specifically India, while broadening the knowledge base and engaging on international best practices. Components of the Conference include keynote and breakout sessions, panel discussions, presentation and a variety of stakeholder consultations.

Countries need to explore innovative models to implement infrastructure projects. Public-private partnerships (PPPs) have been one such option that enables governments to optimally share the risks associated with a project’s life cycle. However, for making government procurement more dynamic, it is imperative to focus on wider options. Furthermore, to implement urban infrastructure in India, a deeper deliberation is required on the means of democratising the governance at the city level with a view towards providing greater operational and fiscal autonomy to Urban Local Bodies (ULBs). These challenges and the emerging opportunities necessitate focusing on the institutional environment to improve the delivery of sustainable urban infrastructure and services and evaluating alternatives for long term, predictable financing.

Urban infrastructure financing needs innovative PPPs and de risked SPVs to secure sustainable, long term investment. The article advocates innovative financing and delivery models for urban infrastructure, prioritising Public-Private Partnerships, structured Special Purpose Vehicles, and project de risking to attract investment and ensure returns. It stresses assessing PPP sustainability, expanding procurement and financing options, and securing long term predictable funding. Concurrently, it calls for governance reforms to democratise city level decision making and provide greater operational and fiscal autonomy to Urban Local Bodies, while addressing service gaps for underserved urban residents and adopting international best practices.