Provision of Urban Amenities in Rural Areas, India

1. The Federation of Andhra Pradesh Chambers of Commerce and Industry Federation House, 11-6-841, Red Hills, Hyderabad – 500004 Provision of Urban Amenities in Rural Areas (PURA) Scheme NATIONAL SEMINAR & EXHIBITION ON RURAL DEVELOPMENT & PURA Dr. N. SaiBhaskar Reddy 8.6.11 CEO, GEO | http://e-geo.org

2. PURA Mission “Holistic and accelerated development of compact areas around a potential growth centre in a Panchayat (or group of Panchayats) through Public Private Partnership (PPP) by providing livelihood opportunities and urban amenities to improve the quality of life in rural areas.” Objectives Provision of livelihood opportunities and urban amenities in rural areas to bridge the rural urban divide thereby reducing the migration from rural to urban areas.

3. Salient features of PURA To bridge the rural - urban divide and achieve balanced socio – economic development by providing physical and social infrastructure, as given below, in identified rural clusters to further their growth potential:- Road, transportation and power connectivity Electronic connectivity in the form of reliable telecom, internet and IT services Knowledge connectivity in the form of good educational and training institutions Market connectivity to enable farmers to get the best prices for their produce Provision of drinking water and up-gradation of existing health facilities.

4. Salient features of PURAcontd…… Intervention should be over and above the existing schemes. Intervention should aim at the cluster becoming growth centre. Intervention to cover amenities and livelihood factors. Convergence of existing schemes to be ensured. Land cost and salaries not to be booked in the scheme.

6. The Restructured PURA Scheme

7. PURA Strategy Implementation of scheme through PPP PPP between Gram Panchayat (GP) and Private Sector partner Core funding from PURA scheme of MoRD Additional support through convergence of Central Govt Schemes Private sector to bring in investment and operational expertise Project based and risk sharing among stakeholders

8. Structure of the PPP Cell Ministry of Rural Development (MoRD), Govt of India Under the overall guidance of Dr. ArvindMayaram, Additional Secretary & Financial Advisor (AS&FA), MoRD PPP Cell functional since Oct 2009 under Joint Secy (Admin) with a PPP Expert provided under ADB T.A. Mandate of the Cell Promoting PPP in rural infrastructure development Support PPP initiatives of the Ministry as well as related Departments / Ministries Design and implementation of India-wide pilot phase of Provision of Urban Amenities in Rural Areas (PURA) through PPP Capacity and awareness building of staffs and stakeholders as part of different programmes Involving lowest tiers of Governance (Panchayats) in PPP

9. Urban Amenities to be provided under PURA Under MoRD Schemes:- 1. Water and Sewerage 2. Village streets 3. Drainage 4. Solid Waste Mgt 5. Skill Development 6. Development of Economic Activity Under Non MoRD Schemes:- 7. Village Street Lighting 8. Telecom 9. Electricity, etc. Add-on Projects i.e. Revenue earning projects (Indicative) :- 10. Village linked Tourism 11. Integrated Rural Hub, Rural Market 12. Agri – Common Services Centre, etc . 13. Any other rural economy based project

10. Business Model • Leveraging public funds with private capital & management for creation & maintenance of rural infrastructure. • Due to thin revenue base, most CAPEX from Govt. schemes. • Community Development schemes ordinarily included. • O&M of assets and services for 10 years. • Private Developer to have flexibility in choosing PURA project area & revenue generating projects as add-ons. • Capital Grant limited to 35% of project cost for meeting viability gap. • Cost of each PURA project limited to Rs. 120 crores. • Actual Capital Grant to vary from project to project

12. Land • For the public amenities, Gram Panchayat / State Govt to provide land free of cost. • For the Add-on activities Revenue sharing between GP and Private Partner if land provided by GP / State Govt. Such add-on facilities to revert back to GP / State Govt at the end of concession period. • In case the private developer has to purchase the land from open market, cost of land not to be included for the estimation of capital grant

13. Agreements Related Concession Agreement – Between GP and Private Developer. Will include minimum service level standards, performance guarantees etc. State Support Agreement – Tripartite Agreement between Central Govt, State Govt and Private Developer. – State Govt. commitment for core facilities like roads, water and power to the PURA area. Independent Engineer – To supervise and monitor performance during project life cycle. – Cost of Independent Engineer financed under PURA.

14. Selection Process Through open competitive bidding process. • Expression of Interest from reputed Infrastructure Companies. • No financial bidding and evaluation based on technical capability and pre approved evaluation methodology. • Short listed bidders invited to pre-bid conference. • Emphasis on rural development priorities as well as developers perspective on an economically viable project. • DPR to form the basis of determining capital grant admissible. To be vetted by Independent Engineer. • Inter Ministerial approval committee to approve final cost and capital grant.

15. ADB Technical Assistance (T.A.) • ADB views PURA as a critical initiative to bring PPP into rural infrastructure sector • Has provided a full time PPP Expert, Transaction Advisor and Legal Advisor to assist in the preparatory stages and conceptualization of PURA pilot phase • Extended 3-year support towards mainstreaming PPP in PURA • The support is for policy framework development, institutionalization of PPP unit in MoRD, capacity building of MoRD and identified Gram Panchayat besides rollout of pilot projects

16. Next Steps CCEA has approved PURA pilot projects on 21stJan • 7-8 pilot projects are expected to be taken up within the outlay of Rs. 248 crores in the 11th Plan. The implementation of the scheme will test the principles on which it is based. This will help in upscaling the scheme in future. • Rollout of the ADB programme by MoRD • Calling „Expression of Interest‟ from established infrastructure developers. • Scaling up after experience of pilot phase

17. DPRs Approved IL&FS Limited in Jaipur District, Rajasthan IL&FS Limited in Rajsamand District, Rajasthan IL&FS Limited in Dehradun District, Uttarakhand Infrastructure Kerala Limited in Thrissur District, Kerala Infrastructure Kerala Limited in Mallapuram District, Kerala Marg Limited in Karaikal District, Puducherry Megha Engineering Infrastructure Limited in Krishna District, Andhra Pradesh (Kondapalli and Ibrahimpatnam gram panchayats) SVEC Constructions Limited in Warangal District(ParvathagiriMandal-10 villages), Andhra Pradesh

18. Transaction structure

19. Overview of the Concession Agreement

20. Next Steps Under PURA only 2 per state – limited number of projects supported. Independent PPP Models in consultation with the state for development of more clusters. Possibilities…………….

21. Thank you. Ref: http://............