jnnurm impact on the urban landscape ramanujam s.r director – urban practice december 1, 2008
TRANSCRIPT
JnNURM
Impact on the urban landscape
Ramanujam S.RDirector – Urban Practice
December 1, 2008
2.
• The urban landscape before JnNURM
• Impact of JnNURM
– Quantitative
– Qualitative
• Constraints and …. opportunities
Prior to JnNURM
4.
Service levels were poor
Large gap in basic services
0%10%20%30%40%50%60%70%80%90%
100%
Access to Water Sanitation Solid WasteCollection
5.
Revenue surplus didn’t exist to fund investments
Faridabad
Hyderabad
Madurai
Nagpur
Nashik
Agartala
Ahmedabad
Pune
RajkotAsansol
Indore
Mumbai
Bhopal
Bodhgaya
Chandigarh
Kochi
Guwahati
J aipur
Mathura
Meerut BhubaneswarAgra
BangaloreAmritsar
Ajmer
0.00
0.20
0.40
0.60
0.80
1.00
Operating ratio Desirable Limit
Faridabad
Hyderabad
Madurai
Nagpur
Nashik
Agartala
Ahmedabad
Pune
RajkotAsansol
Indore
Mumbai
Bhopal
Bodhgaya
Chandigarh
Kochi
Guwahati
J aipur
Mathura
Meerut BhubaneswarAgra
BangaloreAmritsar
Ajmer
0.00
0.20
0.40
0.60
0.80
1.00
Operating ratio Desirable Limit
Source: CRISIL Infrastructure Advisory analysis of CDPs
6.
Large unfunded investment needs
- 50,000 100,000 150,000 200,000 250,000
Revenue Surplus
Revenue Income
InvestmentProposals
Investment Proposals Rs Crores
Source: Investment needs of 45 cities compiled from city documents
The investment landscape now
8.
Good portion of the need has been funded, needs have also expanded
- 50,000 100,000 150,000 200,000 250,000
Revenue Surplus
Revenue Income
InvestmentProposals
Investment Proposals Rs Crores
Source: MoUD Analysis of CDPs
UIG+BSUP
3,35,000 crores
9.
Basic services are well prioritized
Basic Services include Water Supply, Drainage, Sewerage and Solid Waste
Share of various services in the approved investments under UIG and BSUP
Basic Services
Urban Poor
Others
Basic services and BSUP account for 85% of approved projects
10.
Cities have been able to scale up investments
-
200
400
600
800
1,000
1,200
1,400
1,600
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Cap
ital
In
vest
men
t in
Rs
Cro
res
Source: AMC presentation on Commercial borrowing – USAID, Indonesia
Ahmedabad – Trend of capital investments
11.
Many cities have been able to develop multi-year investment plans
Vishakapatnam
Capital expenditure
0200400600800
10001200140016001800
00-01 01-02 02-03 03-04 04-05 Multi Year
JNNURM
Rs
Cro
res
12.
0%
20%
40%
60%
80%
100%
1998 2002 2004 2005 2007
Water & San Bridges Roads Transport Urban poor
It took a long time for cities to develop a multi sector investment plan
Source: AMC presentation on Commercial borrowing – USAID, Indonesia
The first investments of Ahmedabad were in basic servicesIt took AMC ten years to reach a multi sector investment plan
Sectoral share of capital investments for Ahmedabad
13.
Indore was able to jump start this process
Indore Sectoral investments Water SupplySewerage Solid WasteRoads TransportUrban Poor
Its investment plan approved under JnNURM is multi-sector
14.
The investment landscape now
• The ULBs are implementing projects worth twice their annual
revenue
• Their investments are multi-year and are on a different scale
• Their plans are also multi-sector
How else is the investment landscape changing
16.
PPP momentum in water sector is at tipping point
Karnataka Pilot areasChandrapur outsourcingChennai DesalLatur
Salt Lake HaldiaNagpur pilotBhiwandi
Mysore 24 X 7Madurai 24 X 7MorbiKhandwaRaipur
Nagpur scaling upKarnataka scaling up
At design stage Announced Bidding completedContract commenced
A year after contracting
Note: Non comprehensive list of cities with water PPPs
17.
Urban Transport PPPs
Bus stops, smallterminals
Fleet
Road infrastructure
MRTS/ LRTS
Small scale PPPs abundant.Should become mandatory across projects.Only a small solution in the larger context.
Live example in Indore. Many in bidding stage. Next steps are in a) Scaling up in frequency and b) unviable routes A viability gap based model is workable
Kolhapur an example of city level scale. Waiting for results.Pimpri - work in progress for a city level financing solution.
Hyderabad metro through a fee + real estate solutionA city level financing solution is a must
based on city level revenuesbased on land use revenues
18.
Water and Urban Transport have adopted new vocabulary
• Water Supply
– Cost recovery has much better
acceptance
– So does 24 X 7
– Increased focus on service
delivery
– SPVs for commercial
borrowing
• Urban Transport
– Shift from high cost metro
plans to bus based systems
– JnNURM has provided
implementation leverage to UT
policy
– Urban Transport Authority
– Urban Transport Fund
– SPVs for commercial
borrowing
Medium scale, private sector oriented opportunities emerge
20.
Focus will be on efficiency improvement
Source: Benchmarking of utilities by WSP and Utility Data Book by ADB
0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
Coverage
Supply Quantity
Hours of Supply
NRW
Cost Recovery (No oftowns)
Service Levels
Water - Current service levels are poor in the distribution side
21.
New opportunities – Water Supply
Quality Metering
Instrumentation
Customer mapping
Quality Metering
Instrumentation
Customer mapping
Energy efficiency
Customer service contracts
Energy efficiency
Customer service contracts
Service contracts
Billing and collection contracts
NRW reduction
Service contracts
Billing and collection contracts
NRW reduction
22.
Urban Transport – City bus will be a high growth area
Source: WSA study for MoUD
23.
So will be parking
Source: WSA study for MoUD
24.
New opportunities – Urban Transport
Junction improvement
Traffic management
Traffic database
Junction improvement
Traffic management
Traffic database
Advertising
On road parking
Advertising
On road parking
Bus Terminals
Multi level parking
Fleet maintenance
Bus Terminals
Multi level parking
Fleet maintenance
Fleet operationsFleet operations
What can slow down the change
26.
Many cities do not have revenues to cover normative maintenance
Per capita revenue, Rs
3691
2551
2348
2075
2069
2067
1961
1733
1529
1354
1350
1132
1050
1034
947
947
942
889
817
772
646
622
585
568
472
237
0 500 1000 1500 2000 2500 3000 3500 4000
Pimpri
Nashik
Pune
A'bad
Surat
Bangalore
Vadodara
Ludhiana
REQUIRED
Nagpur
Chandigarh
Rajkot
Amritsar
Vizag
Chennai
Jaipur
Hyderabad
Indore
Madurai
Kanpur
Faridabad
Bhopal
Kochi
Lucknow
Varanasi
Allahabad
Most octroi-levying cities able to meet normative requirement
Other cities a have deficit of at least Rs.500 per capita
Note: Gujarat has since then repealed Octroi
27.
Urban Transport is the next big investment need with big gaps
# - Aggregate revenues estimated for 63 JNNURM Cities (41% of total urban population)
* Investment requirement as per Eleventh Five Year Plan
18860
132000
0
20000
40000
60000
80000
100000
120000
140000
Aggregate ULB Revenues Investment Requirement*
Rs
cro
res
28.
Revenue reforms can change this, but implementation is slow
0 10 20 30 40 50 60 70
Property Tax 85%Coverage
Property tax 90%collection
Water 100% costrecovery
Solid waste 100% costrecovery
Number of cities
Achievement till now Targetted for this year Remaining
29.
Summary
• JnNURM has changed the investment landscape
– Quantitatively as well as qualitatively
• Several innovations underway
• PPP and service focus will open up many opportunities
– Large scale PPPs
– Medium scale PPPs focussed on efficiency
• Revenue reforms are necessary to sustain this, but are moving slowly
Thank You
[email protected]+91 99202 28448
31.
www.crisil.com
www.standardandpoors.com