New Delhi: As many as 309 private companies are in the race to set up urban projects—from water supply and housing to river transport—in eight cities of Uttar Pradesh (UP) as part of the first phase of a state government programme that is estimated to cost Rs16,000 crore.
These companies are vying for 41 projects that will be built in the public-private partnership model in which the developer finances and constructs the projects and derives revenues from them, said two officials with the firms providing consulting services for the state’s ambitious urban renewal plan.
Model development: A file photo of work at a village in Uttar Pradesh. The renewal projects will be built through public-private partnership. Harikrishna Katragadda / Mint
However, a number of these projects will not be financed through user charges but through land development rights given to developers, they added, asking not to be named as they are not authorized to speak to the media.
The names of the companies in the running were not disclosed.
The two consultants for the two-phased programme, called the Integrated Urban Rejuvenation Plan, are Kolkata-based Srei Infrastructure Finance Ltd and Mumbai-basedDarashaw and Co. Pvt. Ltd.
The programme will cover Ghaziabad, Aligarh, Meerut, Agra, Allahabad, Varanasi, Lucknow and Kanpur.
The second phase is estimated to exceed Rs25,000 crore, according to the officials.
“The projects will be funded through a mix of user charges and sweeteners such as land. In projects like car parks, the user fees will generate revenue, but for some other projects, land will have to be given,” one official said.
The plan includes water supply, solid waste management, sanitation, building drainage systems, sewage disposal, riverfront development, riverine transportation as well as education, public health and housing.
The initial bids for the first phase of the programme closed on 6 October.
Analysts say leveraging land to pay for infrastructure projects is inevitable, especially in areas where most people don’t pay user charges for public utilities such as roads and water.
“The principle is fine, but the question is how it is regulated,” said V.K. Shrinivas, CEO of India Urban Spaces Foundation, a not-for-profit organization. “I believe that land has to be leveraged. The question is: How do you use it to fund public infrastructure?”