PURA Pilots – A new paradigm in delivery of services in rural areas

1. PURA Pilots – A new paradigm in delivery of services in rural areas Mr. Rajesh Bhushan Joint Secretary, Department of Rural Development 17th July 2012

2. Agenda 1 Introduction 2 Restructured PURA Scheme 3 Progress on the first round of pilots under Restructured PURA Scheme 4 Second round of pilot projects under Restructured PURA Scheme

3. 1. Introduction

4. Growth and transformation of PURA Concept Origin: PURA – President Kalam’s address on eve of Republic Day 2003 • Vision of transformation to a ‘developed’ India by empowering the rural people by creating physical, electronic and knowledge connectivities leading to economic connectivity in villages. • Such model of establishing circular connectivity among the rural village complexes will accelerate rural development • PURA to be a business proposition economically viable and managed by entrepreneurs, local people and small scale industrialists • Government’s support should be in the form of empowering such management agencies, providing initial economic support and finding the right type of management structure and leaders to manage and maintain

5. Pilot Phase • Prime Minister announced implementation of PURA on Independence Day 2003 • Planning Commission moved a Cabinet Note on PURA scheme and this was approved in-principle in January 2004 • A pilot phase was implemented from 2004-05 till 2006-07 with consent of Planning Commission and a total budget of Rs. 30 crores • Cabinet gave ex post-facto approval to pilot phase in March 2006 for investing Rs.4 - 5 crores per cluster (over a period of 3 years) in 7 clusters in 7 States to provide connectivities: transport, power, electronic, knowledge, market and provision of drinking water and health facilities

6. NIRD study on the Pilot Projects Independent evaluation by National Institute of Rural Development in July 2008 revealed that: • Scheme was open-ended without specific guidelines and no in-built business plan • Largely infrastructure centric without factoring lead economic activities • Site selection was not based on growth potential • Did not allow for convergence with other schemes of rural development or other Departments, hence having limited impact on holistic development of rural areas • Recommended restructuring of the scheme

7. Restructuring Process After appraising the pilot phase in 2007, Planning Commission advised redesigning PURA as a demand-driven PPP scheme with following key features: • Selection of lead agency / anchor partner with a clear articulation of the roles, rights and responsibilities of the lead agency • Selection of clusters on the basis of economic growth potential • Commitment of State Government for facilitation support • Financial outlay for a cluster to the tune of Rs. 70-80 crores wherein Central Government participation be limited to Rs. 20-25 crores • Focus on livelihood opportunities • Creation of sustainable revenue model to encourage commercial banks and private sector to participate

8. PURA PPPs...1 Poor infrastructure prevents unlocking of full economic value in rural areas which in turn accelerates migration to urban areas The challenge lies in creating an economic regeneration in existing rural clusters - It is well accepted that access to physical infrastructure enhances household welfare through greater economic growth, thereby mitigating chronic and transient poverty. Constraints were identified for the low impact of large spending and for lower levels of citizen satisfaction in rural areas: • Delivery of different schemes is not simultaneous • Inadequate/no resource provisioning for maintenance • Schemes operate autonomously and there is little synergy in implementation • Low service delivery standards for infrastructure in rural areas

9. PURA PPPs...2 • Extensive consultations undertaken by MoRD with Planning Commission, Line Ministries, State Governments, Private Sector, Chambers of Commerce, etc during 2007-09 • Planning Commission approved Plan ceiling of Rs. 248 crores in the XI Plan for PURA scheme • ADB TA supported in the formulation of a project and financial structure • Restructured scheme proposal was circulated to different Ministries and views incorporated in preparing Cabinet Note • Cabinet approved restructured PURA scheme in Jan 2010 • Guidelines notified and scheme launched in April 2010

10. 2. Restructured PURA Scheme

11. PURA Mission Statement 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 Objective • To bridge the rural urban divide thereby reducing the migration from rural to urban areas

12. PURA Strategy & Uniqueness • To address defects and incorporate new learnings, the strategy was based on combining rural infrastructure development with livelihoods creation • Implementation of scheme through PPP concession between Gram Panchayat (GP) and private sector partner • Core financing from PURA scheme of MoRD and additional support through convergence of other Central Government schemes • PURA structured as a composite “Project” and not a scheme / programme – Private sector to bring in investment and operational expertise on basis of a detailed business plan • It is not a CSR activity - Private sector partner to select its PURA project, and, earn from the same

13. What does PURA aim to achieve • Simultaneous delivery of key infrastructure required in villages leading to optimal use of resources • Provision of funds for O&M of assets for 10 years post construction period, along with capital investment for creation of assets • Transforming several schemes into a single project to be implemented as per set standards in defined timeframe – while the requirements of each scheme is kept intact • Combining livelihoods creation with infrastructure development in rural areas • Standards of service delivery in rural areas almost at par to those set for urban areas • Enforcement of service standards through a legally binding arrangement

14. Amenities to be provided under PURA • Under MoRD Schemes (Existing and PURA): • Water and Sewerage • Village streets • Drainage • Solid Waste Mgt • Skill Development • Development of Economic Activity • Under Non MoRD Schemes: • Village Street Lighting • Telecom • Electricity, etc. • Add-on Projects i.e. Revenue earning projects (Indicative): • Village linked Tourism • Integrated Rural Hub, Rural Market • Agri – Common Services Centre, etc . • Any other rural economy based project • Schemes such as NRDWP, TSC, Special SGSY, etc will be converged in CAPEX provision of PURA • Access schemes for dovetailing in PURA

15. What is a PURA village? • A Gram Panchayat / a cluster of geographically contiguous Gram Panchayats with a population of about 25,000 – 40,000 • Water supply • Piped water supply of 100 lpcd through individual household connections • Sustainability of water supply through water harvesting and water recharge activities • Sewerage • 100% coverage of sewerage connections to individual households • Solid waste management • 100% coverage of SWM services to individual households • Scientific treatment of solid waste • Village streets and drainage • 100% of village streets paved along with storm water drains and covers the entire rural populace • 100% of village streets have street lighting • Increase in employment • Skills building program to cover 50% of candidates in BPL households • Assure placement for at least 75% of the trainees

16. Business Model • Leveraging public funds with private capital & management for creation & maintenance of rural infrastructure • Schemes included are ones focused on community development and not targeted towards individuals • O&M of assets and services for 10 years after a construction period of 3 years • Private Developer to have flexibility in choosing PURA project area & revenue generating projects as add-ons

17. 3. Progress on the first round of pilots under Restructured PURA Scheme

18. Flow chart of PURA Project Cycle (1/2) Expression of Interest • Issue of Expression of Interest. • Response to EOI (93 EOIs received) • Identification of Qualified Bidders (45 Biddersqualified) • Issue of draft RfP to Qualified Bidders • Pre-bid meeting to obtain suggestions on draft RfP and Concession Agreement • Issue of final RfP • Submission of Proposals incl. Concept Plan (14 proposals received) • Evaluation of Proposals by Project Screening and Monitoring Committee and sanction by Inter-Ministerial Empowered Committee Request for Proposal Issue of “Letter of Intent” to 6 Selected Bidders for preparation of DPRs for 11 PURA projects

19. Flow chart of PURA Project Cycle (2/2) • Preparation of DPRs by Private Developers. • Appraisal of DPRs by Project Screening & Monitoring Committee & sanction by Inter-Ministerial Empowered Committee including approval of PURA Grant • Execution of Concession Agreement between the Private Developers & participating Gram Panchayats (GPs) & execution of State Support Agreement Execution of transaction documents Current status • Project execution by Private Developer • O&M of project facilities by Private Developer • Monitoring and impact assessment of PURA projects by Project Screening & Monitoring Committee • Hand over of project facilities to the Gram Panchayats at the end of the concession period. Project Construction and Operations & Maintenance (O&M) Transaction documents for two projects have been executed and the balance will be signed by August 2012

20. Executed projects Malappuram district, Kerala Thrissur district, Kerala Balance projects Dehradun district, Uttarakhand Jaipur district, Rajasthan Rajsamand district, Rajasthan Sangli district, Maharashtra Warangal district, Andhra Pradesh Krishna district, Andhra Pradesh Karaikal district, Puducherry N Qualified PURA projects for which DPRs have been received Map for representation only Dehradun Uttarakhand Jaipur Rajasthan Rajasmand Maharashtra Warangal Andhra Pradesh Sangli Krishna Puducherry Malappuram Thrissur Kerala Major themes • Rural tourism • Food / Meat processing • Apparel Park • Agriculture Park / Support • Micro & Small Industries • Rural Business Hub

21. 4. Second round of pilot projects under Restructured PURA Scheme

22. Second round of pilot projects (1/2) • Given the success of the first batch of pilot projects, MoRD has received a sanction, from the Planning Commission, Government of India, to initiate the procurement process for the second batch of 10-15 pilot projects. • The experience of these pilot projects will help MoRD in conceptualizing the upscaling of the PURA scheme in the 12th Plan period. • Key differences from the earlier phase: • The PURA cluster is defined additionally as a Census Town to provide services to these non-catered areas. • The Non MoRD projects shall now be converted to basket of schemes so as to simply the approval process and formulate a single window mechanism for the private developers and also to reduce the time taken from selection to implementation. • Increased involvement of the State Governments in the project approval process. • Greater involvement of the public in observing and monitoring the operations by public reading of the IE reports in the Gram Sabha

23. Second round of pilot projects (2/2) • The notice for Expression of Interest (EOI), conveying the initiation of the procurement process for the second batch of pilot projects, has been issued. • The last date for receiving applications is 23rd July 2012.

24. Thank you