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May 20, 2012

Four Civic Lessons From Four Cities – The Economic Times

Indian cities are known more for being urban sprawls than for their civic management. However, some cities give us a glimmer of hope. Powered by the $20-billion Jawaharlal Nehru National Urban Renewal Mission, these pockets of change show how with political will and planning, our urban spaces can become liveable again.

Here are initiatives from four cities

Bangalore
The Initiative
In 2008, Bangalore Mahanagar Palika launched a project to increase property tax collections and move to a dynamic system which allows for re-evaluation of property prices at regular intervals and also increase tax revenue.

Significance
Property tax is one of the main sources of revenues for cities. But its contribution remains small and inelastic because most cities do not know how to efficiently collect the tax. More importantly, they do not know how to make it dynamic and keep pace with the appreciation in property prices.

Bruhat Bangalore Mahanagar Palika (BBMP) is one of the first municipal bodies to show how this could be done.

The Plan
Typically, property tax is based on the rental value of the property and is often randomly decided by the assessing officer. This means two properties in the same area could be paying very different property tax. More importantly, the taxes don’t get revised frequently.

In 2008, BBMP, with 800 sq km and 30,000 streets was mapped with each streets categorised into six zones. For example, all posh area roads were classified as A. People knew which zone their property belonged to, what was the rate per square foot. The rates varied depending on the kind of construction, usage, age of the property and occupation status (self occupied or rented). BBMP set up an online tax calculator whereby people could just punch in their address and their property size to know their tax.

Once in three years, there was automatic revision of rates of 15% and the council was given the powers to revise it by up to 30%. There was also a provision of re-classifying the area zone depending on the developments in that area.

The area-based assessment of property tax first started in Bangalore in 2000 but it was not made mandatory. With minor tweaking, it was made mandatory in 2008. With sub-clauses like depreciation benefits to the older property, the response has been tremendous, says Vasanth Rao, the bureaucrat who championed it. Other states like Andhra Pradesh and Gujarat are also trying something similar with some tweaks to the model.

The Impact
Bangalore today collects more property tax than any other Indian city. The number of properties covered has increased from 7 lakh in 2007-08 to 12 lakh (out of total 15 lakh) in 2010-11. Property tax collected rose from 430 crore in 2007-08 to around 1,500 crore in 2011-12. Ahmedabad

The Initiative
To build India’s best BRTS, which is well integrated with other public transport systems, gains wide acceptance among citizens, is not a financial drain and eventually reduces thrust on private transport in the city.

Significance
Ahmedabad BRTS claims to be one of the cheapest BRTS in the world — its minimum fare is 3 against 5 in Delhi and 6 in Japan — and yet it typically achieved operational breakeven in 2.5 years.

Other cities such as Surat, Dharwad, Hubli and Indore too are looking at BRTS.

The Plan
Ahmedabad’s population will grow from 7.2 million to 11 million by 2035. To cater to its growing needs and ease thrust on private transport, the city is developing an integrated plan for public rapid transit system in which BRTS is one of the components. In future it will be integrated with the Ahmedabad Metro.

The work on BRTS began in 2006 end as part of the JNNURM programme. It opened its first stretch in 2009. By 2012 end, it will have a BRTS corridor of 85 km. The design of the bus stop was a big learning process. They began with a design where the bus stop was on the side, as it is traditionally and it cost 5-7 lakh. But eventually the bus station was redesigned for smooth flow of traffic and passengers, making it 50-m long with the station positioned in the middle. The cost went up to 45 lakh per stop but it substantially improved commuter experience. It has already won two international awards for the BRTS design and planning.

The bad experience in Delhi BRTS pushed the city authorities to do a cautious rollout in Ahmedabad. The prototype in Ahmedabad was kept open for six months for people to travel and give feedback. First the full-fledged operation started for two hours each in the morning and evening and people were allowed to travel on it for free. Then they scaled it up to day-long free service. Every week they invited different groups — businessmen, lawyers, schoolchildren — to experience the BRTSand give their feedback. Their first big test came during Navratras soon after which the regular BRTS started.

The Impact
A lot of road traffic has moved to BRTS. There is a bus every two minutes. Today, up to 1.4 lakh people travel on BRTS per day and by 2013, this is expected to cross 5-lakh plus. BRTS is helping move a lot of two-wheelers and cars off the road. Nagpur

The Initiative
In a city where 30% of the houses do not have tap water supply and almost half the houses which get tap water are not charged, the project aims to offer 24×7 supply to all households. It also plans to decrease the non-revenue houses to under 20% in five years.

Significance
All Indian cities face the challenge of providing 24×7 water supply to its citizens. Un-billed households and poor water quality only add to the problems. With its PPP model, Nagpur is attempting to show the way.

The Plan
In 2009, in an experiment under JNNURM, the Nagpur Municipal Council (NMC) asked French giant Veolia to do a pilot project in Nagpur providing 24×7 water supply to 10,000 households spread over 10 water distribution zones. The project helped reduce non-revenue water connections from 52% to 27%.

Encouraged by the project, in 2010, the NMC decided to bring in a private operator to take care of the water supply,
infrastructure management and revenue collections. All water-related assets and services were transferred to a new NMC subsidiary called NESN. The subsidiary then picked Orange City Water (ORW is a 50:50 joint venture between Vishvaraj Environment and French MNC Veolia) as the operator for the project.

All the assets are owned by the NMC and the tariff too is decided by it. The operator has the responsibility to build,
upgrade and maintain water infrastructure in the city, ensure 24×7 water supply at certain quality levels, issue bills and collect revenue from the users. It gets paid on the basis of units of water it bills and collects. The project cost is estimated at around 450 crore, part of which comes from the JNNURM and Orange City chips in the balance.

The Impact
The work began in December 2011 and ORW is currently doing hydraulic modelling planning of the entire city so that the water infrastructure can be augmented accordingly. A newly-commissioned water treatment plant has increased the water supply by 100 million litres per day.

Vijayawada
The Initiative
The commercial capital of Andhra Pradesh has a population of 11.8 lakh with a large percentage (over 25%) living in over 111 slums. With cooperation from farmers, a pro-active government and some good infrastructure initiatives, Vijayawada is in the middle of relocating many of its slum dwellers to a well-developed colony equipped with all the basic amenities.

Significance
Most big Indian cities grapple with a large percentage of its population living in slums with no basic amenities. Starting from Dharavi in Mumbai, slum re-development has been on city planners’ minds but very few have succeeded so far.

Vijayawada’s slum re-development plan offers some hope.

The Plan
Vijayawada Municipal Corporation (VMC) partnered with land-owning farmers in Jakkampudi and Gollapudi villages, on the outskirts of Vijayawada, to build houses for urban poor under JNNURM programme. In the 60:40 arrangement, VMC gets 40% of the farmers’ land share (on which it builds houses for urban poor) and the farmers retain 60% but benefit from infrastructure development that the government undertakes.

The project is being executed in two phases. Phase I covers an area of 226 acres with 8,000 houses that have been built already. Phase II will cover 787 acres. Altogether, the project is expected to build 25,000 houses.

With the completion of the first phase, the area has now been connected to the main city with 40-ft wide all-weather BT roads. VMC has built a flyover over a railway crossing that alone has reduced the distance by 4 km. It has also built an inner ring road, integrating the area to the main city. The colony is now just 5-8 km away from the central business district. The state government’s bus service has begun and the work on bus shelters, street lights, water supply etc is being smoothened.

Within the colony the government has built a school, a hospital, a community hall, a park and one fair price shop.

Going forward, 32 flats, or a block, has been organised into a owner’s RWA association where they will take charge of
maintenance of the building and other common issues even as the government will take care of the infrastructure issues.

The Impact
Already, 3,000 families have moved. The work on the second phase will begin by the middle of this year. Farmers too are happy as their land rates have shot up from 20 lakh per acre earlier to 70 lakh per acre.

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