: Need to ensure adequate return on investments from infrastructure projects

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While emphasizing upon the need to ensure adequate return on investments in infrastructure through properly structured Special Purpose Vehicles (SPVs) and de-risking of projects, CEO Amitabh Kant 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.

Kant was speaking at the South Asian regional conference at in the capital to discuss the key issues, perspectives and the way forward in the Urban Infrastructure organised by NITI Aayog in partnership with the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and the Asian Development Bank (ADB).

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 Kant, Secretary, Department of Economic Affairs, Ministry of Finance Subhash Chandra Garg. UN Resident Coordinator in India,Yuri Afanasiev, 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), 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.

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.

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.

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