Centre opens urban projects to RWAs, private players

NEW DELHI: Now, resident welfare associations, real-estate developers and private entities can undertake civic projects, including water and sanitation, with the Centre opening up urban development space through the newly-sanctioned Urban Challenge Fund.

Civic and urban development projects of a city will no longer be only the responsibility of cash-strapped municipalities. Multiple RWAs can organise themselves into a group, identify a civic issue, frame a project proposal and send it to the civic agency to address the local issue related to water, sanitation or even laying a new sewer line. If a real estate developer's upmarket apartment complex has waterlogging on the access roads, the developer can be allowed to propose and then undertake a project outside the colony. The new approach, under the Urban Challenge Fund, will see the state and the
Centre funding half the project cost with the remaining being raised from the market.


The Rs 1 lakh crore Fund will see cities proposing different projects to the state government and then competing against each other to tap into this fund. The Centre has earmarked Rs 20,000 crore per year for the next five years. The state governments will match up the Centre's share and the remaining will be raised from the market, either as bank loans or through private participation or through municipal and citizen bonds.

Under Urban Challenge Fund, cities will be supported to do projects under three verticals - creative redevelopment of cities, cities as growth hubs and water and sanitation. A senior official told ET, "The whole idea is that urban infrastructure cannot be funded by public finance alone. It has to access the market through bankable projects." The approach has been taken further by allowing RWAs and private developers who have long been complaining about civic infrastructure not matching their expectations.

One of the biggest focuses would be rejuvenation of city cores with refurbishment of legacy infrastructure. Greenfield and semi greenfield cities will be promoted as growth hubs. The ministry of housing and urban affairs has already funded several projects under Special Assistance to States for Capital Investment (SASCI) scheme in the current fiscal.