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Home / India / Govt for private sector participation in urban development projects

Govt for private sector participation in urban development projects

Government is keen to promote private sector participation in urban development projects across the country, reports Hemendra Singh Bartwal.

india Updated: Feb 07, 2007, 00:56 IST
Hemendra Singh Bartwal
Hemendra Singh Bartwal

With the demand for infrastructure and civic services growing rapidly due to the fast pace of urbanisation and expanding population, the government is keen to promote private sector participation in urban development projects across the country.

Commercial development of slum-occupied land, multistoried housing for the poor, metro rail, mass rapid transit systems (MRTS), drinking water supply and waste disposal are some of the prominent areas where the government wants to encourage public private partnership (PPP) projects.

These being capital intensive projects with long gestation periods, the government is hard-pressed for funds and would like to leverage the finances of private industry to set them up.

In Delhi, the Urban Development Ministry has ambitious plans to involve private builders in in situ development of sprawling slum areas where a portion of the land will be used for building high-rise housing to rehabilitate the shanty dwellers. The rest of the space will be given to builders for commercial utilisation by way of setting up hotels, malls and shopping complexes.

"Urban land prices are shooting skyhigh. In the past few years, land prices have gone up 10 times. Land plots on which slums are located can be used as an enormous resource," Urban Development Minister S Jaipal Reddy stated on Tuesday. Private sector could participate in a big way in such slum development projects all over the country as the Centre would recommend this PPP model to the state governments, he added.

Emphasising that the scope for private sector participation in urban development sector was far greater than any other sector, Reddy invited Indian and foreign companies to come forth with proposals to take up major projects here. The Minister was addressing an international conference on 'India's infrastructure needs with public-private partnerships' organised by the World Bank. Planning Commission Deputy Chairman Montek Singh Ahluwalia was also present at the meet.

While the metro rail projects in Delhi and Bangalore are being entirely operated by the government, in Mumbai the task of setting up the first phase of metro has been awarded to the private sector. According to Reddy, the PPP model will be adopted for the Hyderabad metro rail too.

Besides, the MRTS in cities like Indore, Bhopal, Pune and Hyderabad will also be operated in partnership with the private sector.

Drinking water supply projects in cities and towns as well as collection and transportation of garbage are other areas where the government proposes to involve private enterprise.

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