Industry may run urban utilities

NEW DELHI: After unbundling of state electricity boards, the government wants to implement the same model in urban local bodies (ULB) and state municipalities. States have been asked to unbundle some of ULB services such as transport, water harvesting and other basic services. The urban development ministry has asked state governments to adopt a model municipal law for empowering local bodies to enter into public-private-partnership arrangements and raise resources.

“Basic services such as water supply, solid waste management, roads, flyovers, parking lots and mass rapid transit system can be managed by involving private sector. The guidelines on private sector participation and model concession agreement circulated by the ministry may be put to use,” urban development secretary M Ramachandran told ET.

“Although 15 years have passed since the 74th Constitution Amendment Act, 1992, was enacted, conditions of ULBs both in terms of functional and financial matters have not improved, as envisaged in the Act. With a view to provide reforms-driven, fast track and planned development of identified cities with focus on efficiency in urban infrastructure, the PPP model has been proposed under Jawaharlal Nehru National Urban Renewal Mission (JNNURM),” he said.

The Delhi government has already started exploring options to develop bus sheds on PPP models. The Delhi Transport Corporation (DTC) is considering utilising its surplus land to develop budget and star hotels on PPP model. According to government sources, water has always been a tricky issue for both Centre and the states. In 2005, the Delhi government’s move to privatise water had met such stiff opposition from NGOs that it had to be eventually stalled. Therefore, the government is of the view that water management should be implemented on PPP basis rather than complete privatisation.

Along with implementation of PPP model in services offered by ULBs, the state governments have also been asked to streamline property tax system. The unit area method for assessment of property tax and procedure for self-assessment by the property owner would be followed by the ULBs. Under JNNURM, linking unit area method with geographic information system (GIS) is one of the reform agenda. Broadly, GIS is a computer system capable of integrating, storing, editing, analysing, sharing, and displaying geographically-referenced information.