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LATEST NEWS UPDATES | Nine firms selected to provide urban amenities in rural areas

Nine firms selected to provide urban amenities in rural areas

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published Published on Oct 12, 2010   modified Modified on Oct 12, 2010

In a first step of its kind, nine private companies have been shortlisted by the Union rural development ministry to develop infrastructure in the rural areas and maintain it for a period of 10 years.

The project, envisioned as part of former President A P J Abdul Kalam’s pet scheme, Provision of Urban Amenities in Rural Areas (PURA), will see these nine private players undertaking pilot projects in January next year and will be completed within three years. As many as 15 such projects, straddling seven states and a Union territory, have been designed. If successful, they’ll be rolled out on a wider scale in during the 12th Five Year Plan.

The nine private companies include Jindal Steel and Power Ltd , IL&FS Ltd, SVEC, A2Z Maintenance and Engineering Services Ltd., Infrastructure Kerala Ltd, Marg Ltd , Megha Engineering Infrastructure Ltd and Srei Infrastructure Finance Ltd. They were shortlisted from a group of 45 firms which had been selected at the Expression of Interest stage. “Even though some of the larger corporate entities, such as the IDFC, Reliance, Shree Cement, ACC and TATA Power opted out, a significant number of companies have demonstrated their stamina and determination to become part of India’s rural development story,” B K Sinha , rural development secretary said here on Monday.

PURA, according to Mr Sinha, would represent “a paradigm shift’’ in rural infrastructure development. “This scheme represents twinning of rural infrastructure development with economic re-generation activities. This is the first ever attempt at delivering infrastructure and amenities through the private public partnership (PPP) model in the rural areas,’’ he pointed out.

Funding for the projects under PURA are likely to come from four sources: ministry of rural development (MoRD) schemes, non-MoRD schemes, private financing and capital grant under PURA. The scope of private funding comes in where financing from government sources proves inadequate.

``It is possible that the essential infrastructure may not get fully funded by government schemes wherein the developer shall invest some capital of its own to fund the capital expenditure of such infrastructure and to meet the operations and maintenance costs. O&M of infrastructure assets and provision of services will be for a project period of 10 years. Financing of commercially viable add-on projects will be done fully through private funding,’’ the business model drafted by the ministry states.

The add-on facilities, which would enable the private players to draw revenue, could include village-linked tourism, rural marketing centres, agriculture common services centre, industrial estate for village industries and technical/vocational training institutions.

The average size of the project, according to the rural development secretary, is about `100 crore. “The total investment in these would be to the order of `1,300 crore. The average grant sought is 35% of and this in all the projects would be about `425 crore. As the total funds available to us during the 12th Five Year Plan are to the tune of `248 crore, we may need to reduce the number of projects,’’ Mr Sinha said, adding, ``However, we’re confident that the additional funds would be mobilised in consultation with the Planning Commission and the finance ministry.’’

The seven states which will be the beneficiaries of the pilot project, include Maharashtra, Tamil Nadu, Kerala, Orissa, Andhra Pradesh, Uttarakhand and Uttar Pradesh.

The lone Union territory is Puducherry. Each cluster would cover a population of 20,000-30,000.


The Economic Times, 12 October, 2010, http://economictimes.indiatimes.com/news/politics/nation/Nine-firms-selected-to-provide-urban-amenities-in-rural-areas/articleshow/6733070.cms


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