Recent Developments

Significant number of new projects approved

In the past year, the urban infrastructure sector witnessed several positive developments pertaining mainly to project sanction and capacity augmentation. Several new projects were approved under the recently launched centrally sponsored programmes – the Swachh Bharat Mission (SBM), the Smart Cities Mission and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) scheme. The year also saw the completion of some of the biggest water and sewage treatment plants. A number of metro rail projects were approved in a bid to improve public transport services in urban areas. Besides, there was an increased thrust on information and communications technology-enabled solutions to enhance service delivery.

Indian Infrastructure takes a look at some major developments that took place over the past year…

  • On the policy front, the Ministry of Environment, Forest and Climate Change notified the Solid Waste Management Rules, 2016. The draft rules had been released by the ministry in June 2015 for suggestions from stakeholders. The new rules lay down guidelines for the segregation and storage of solid waste, the duties of various stakeholders, the criteria for waste-to-energy (WtE) processes and the steps to be taken for solid waste management (SWM) in hilly areas. The rules also specify the time frames mandated for various solid waste management measures.
  • The three major programmes launched by the central government also made considerable headway. Under the Smart Cities Mission, a total of 33 cities were shortlisted for development at an estimated investment of Rs 807.89 billion. Meanwhile, round two of the competition is currently under way, with participation from 54 cities. Under the AMRUT scheme, which aims at improving basic water supply, sanitation and drainage services in urban areas, the first instalments of central assistance have been sanctioned. In 2015-16, about Rs 19.48 billion was sanctioned and Rs 24.96 billion has been sanctioned up to June 2016 for the year 2016-17. Meanwhile, SBM, which was launched in October 2014, saw the completion of several projects. Till June 2016, about 5,713,440 applications have been received for setting up individual household toilets across states. So far, work has been completed on 1,721,743 toilets. A total of 70,190 community toilet seats and 11,825 public toilet seats have been constructed. Further, under the Namami Gange programme, a total of 231 projects worth Rs 15 billion were launched across the country.
  • The water supply and sanitation segments saw a pronounced surge in activity. The past year witnessed the completion and approval of several water supply and sewage treatment plants. A 735 million litre per day (mld)  water treatment plant (WTP) was operationalised in Medak, Telangana, and another 100 mld WTP was commissioned in Maradu, Kerala. Further, construction work commenced on a 210 mld WTP in Uttar Pradesh. About 25 sewage treatment plants (STPs), each with a treatment capacity of over 100 mld, were approved across the country. One of the biggest STPs, with a design capacity to treat about 847 mld of sewage, was approved for Malad, Maharashtra. The Bangalore Water Supply and Sewerage Board in Karnataka also received approval to set up 10 STPs with a total capacity of 336 mld. The combined cost of the STPs is estimated at Rs 2.5 billion.
  • A number of water supply augmentation projects were also approved during the year. A drinking water supply project worth Rs 4.84 billion was approved in Tamil Nadu. A water supply augmentation and drainage project worth Rs 4.35 billion was approved in Kolhapur, Maharashtra. The Madhya Pradesh government sanctioned water supply and sewerage projects worth Rs 9.27 billion for Ujjain. Besides, a sewerage project worth Rs 1.9 billion was approved for Belagavi, Karnataka. The concept of 24×7 water supply also received increased interest from various stakeholders. The government approved projects worth Rs 9.13 billion for providing 24×7 water supply to several cities in Himachal Pradesh and Karnataka. Meanwhile, two major water supply augmentation projects – the Rs 12.95 billion Vellore Combined Water Supply Scheme Project and the Rs 1.8 billion Dindigul Water Supply Augmentation Project – were completed during the year.
  • Further, the government approved a number of projects to improve SWM practices in India. The Tamil Nadu government approved the Vellore cluster SWM project at an investment of Rs 1.5 billion. Further the Karnataka government signed an MoU with Dutch consortium Waste2Value to set up a 600 tonne per day (tpd) waste processing plant in Bengaluru. The project is estimated to entail an investment of Rs 4.7 billion. The government has also laid special emphasis on developing WtE plants that are capable of meeting the twin goals of waste management and energy production. The Nagpur WtE plant, which will have a capacity of 600 tpd, was approved by the Maharashtra government and the 300 tpd Brahmapuram WtE plant in Kerala also received in-principle approval.
  • After a lull period, the metro rail segment witnessed a spurt in activity across the country. About 29.5 km length was added to the operational network. Some of the major metro rail projects completed during the year are the 4.4 km Jahangirpuri-Samaypur Badli stretch and the 14 km Badarpur-Faridabad Line of the Delhi Metro and the 6.4 km Mysore Road-Magadi Road stretch of the Bangalore Metro. Further, in a major development, the government approved 13 metro rail projects with a total network length of 589.39 km during the past year. These projects are likely to involve a combined investment of over Rs 2 trillion. Key metro rail projects approved include the 105.95 km Delhi Metro Phase IV Project at an approved cost of Rs 550 billion and the 108 km Gurgaon-Manesar-Bawal Metro Rail Project worth Rs 274 billion.
  • With regard to bus rapid transit (BRT) projects, construction work on the Amritsar BRT project in Punjab was completed. The 31 km system has been developed at a cost of Rs 4.95 billion. The Pune BRT project in Maharashtra spanning over 16 km was also completed. Moreover, the 9.09 km long Nashik Phata-Wakad corridor (Corridor III) and the Sangvi-Kiwale stretch of Corridor II under the Pimpri Chinchwad BRT Project commenced commercial operations.
  • Given the government’s limited funds and the poor financial health of urban local bodies (ULBs), a major portion of investment requirements for the sector continues to come in the form of multilateral grants and aid. During the past year, the Asian Development Bank extended Rs 30 billion for the Rajasthan Urban Infrastructure Development Project. It also provided Rs 4 billion for the Pali Water Supply and Sewerage Project in Rajasthan and Rs 13 billion to augment the water supply and drainage system in Kolkata. At the same time, the Japan International Cooperation Agency (JICA) sanctioned Rs 15.35 billion for Phase II of the Odisha Integrated Sanitation Improvement Project. JICA also sanctioned Rs 10 billion for pollution abatement of the Mula-Mutha river in Pune, Maharashtra, and Rs 351 million for the Dindigul Water Supply Augmentation Project in Tamil Nadu. Further, the World Bank extended financial assistance worth Rs 4.77 billion for the 24×7 water supply project in Belgaum, Karnataka.
  • A number of ULBs introduced online services in a bid to improve customer satisfaction and service delivery. Online portals and applications to apply for new water and sewerage connections were introduced in Kolkata, Mumbai and Bengaluru. At the same time, spot water billing and online bill payment services were launched in Delhi, Ludhiana, Chandigarh and Kolhapur. Besides, local bodies are also adopting smart solutions to enhance customer coverage and increase revenue collection. Smart water meters were installed in Thane and Ahmedabad to curb water theft and increase municipal revenues. In addition, water utilities in Bhubaneswar, Delhi and Varanasi have set up water ATMs to meet the water requirements of areas facing water scarcity.
  • To conclude, the urban infrastructure sector received considerable support from the government in the form of sector-specific policies and programmes. All four subsectors – water supply, sanitation, metro rail and BRT – witnessed the approval of some major projects. Besides, the water supply, sewerage and metro rail segments saw the completion of several important projects as well. To maintain the growth momentum, the inherent issues hindering sector growth need to be urgently addressed. Most importantly, ULBs need to be made fiscally independent. There is also a need for capacity building and the introduction of more training programmes for ULBs. Further, private sector participation needs to be encouraged to attract private investment as well as technical expertise into the sector. Finally, the government needs to simplify the process of obtaining approvals and clearances for timely and successful implementation of approved projects.

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