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Andhra Pradesh Urban Development Vision 2029

Draft for Discussion December 1st 2015 Submitted by: Ernst & Young LLP (EY) CPG Consultants Pte Ltd

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Urban Development Sector Paper – Draft for Discussion

Table of Content EXECUTIVE SUMMARY ....................................................................................................... 9 2.

EXISTING SPATIAL ORGANIZATION & PHYSICAL CONDITIONS.................................. 17

3.

ENGAGING THE STAKEHOLDERS ............................................................................. 29

4.

INSTITUTIONAL CHALLENGES ................................................................................. 32

5.

SWOC ANALYSIS ..................................................................................................... 35

6.

VISION ................................................................................................................... 37

7.

AP URBAN STRUCTURE ........................................................................................... 50

8.

SPATIAL STRATEGIES .............................................................................................. 63

9.

KEY TARGET & GAP ANALYSIS ................................................................................. 72

10.

IMPLEMENTATION PROGRAMS .............................................................................. 87

11.

ANNEXURE I: URBAN POPULATION PROJECTION METHODOLOGY......................... 117

12.

ANNEXURE II: INFRASTRUCTURE INVESTMENT CALCULATION ............................... 121

13.

ANNEXURE III: MEETING MINUTES ....................................................................... 132

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List of Abbreviations AMRUT

Atal Mission for Rejuvenation and Urban Transformation

AP

Andhra Pradesh

APUFIDC

AP Urban Financial and Infrastructure Development Corporation

CAA

Constitution Amendment Act

CBIC

Chennai – Bengaluru Industrial Corridor

CDMA

Commissioner and Director of Municipal Administration

GDP

Gross Domestic Product

GSDP

Gross State Domestic Product

GIS

Geographic Information System

GoAP

Government of AP

GoI

Government of India

ICT

Information and Communication Technology

JNNURM

Jawaharlal Nehru National Urban Renewal Mission

KPI

Key Performance Indicator

MoUD

Ministry of Urban Development

MSME

Micro, Small and Medium Enterprise

NIMZ

National Investment Manufacturing Zone

PCPIR

Petroleum, Chemicals and Petrochemicals Investment Region

PPP

Public – Private Partnership

O&M

Operation & Maintenance

ULB

Urban Local Body

VCIC

Vizag – Chennai Industrial Corridor

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List of Tables Table 1: Wastewater generation and treatment...................................................................................................... 25 Table 2: Solid waste collection and treatment capacity of Andra Pradesh cities ........................................ 26 Table 3 : Service backlogs of urban road in percentage. Source: HPEC (2011). .................................................. 28 Table 4: Industrial nodes along VCIC. Source: Department of Industries & Commerce (2015) .......................... 51 Table 5: Classification of cities used in this report is based on HPEC’s Report on Indian Urban Infrastructure and Services (2011) ...................................................................................................................................................... 55 Table 6: Number of Size Class of Cities in AP. Data Source: Census of India 2001 and 2011 ............................ 56 Table 7: Population per Size Class of Cities in AP. Data Source: Census of India 2001 and 2011 ...................... 57 Table 8: Population per Size Class of Cities in AP. Data Source: Census of India 2001 and 2011 ...................... 58 Table 9: ULB classification based on population size. .......................................................................................... 59 Table 10: Percentage breakdown of AP urban structure for 2011, 2019, 2022, and 2029. ................................... 59 Table 11: Population of GoAP’s ‘Mega-Cities’ in 2011 and 2029 ....................................................................... 61 Table 12: Summary of Key Target and its Indicators ............................................................................................ 73 Table 13: Indicators’ alignment with state, national and international standards/initiatives ................................. 76 Table 14: Indicators to achieve Productive City .................................................................................................... 78 Table 15: Change in urban employment during 2014-2019, 2020-2022 and 2023-2029 periods. ........................ 79 Table 16: Growth of skilled labour during 2015-2019, 2020-2022 and 2023-2029 periods. ................................ 80 Table 17: Indicators to achieve Inclusive City ...................................................................................................... 81 Table 18: Phasing for slum upgrading program. ................................................................................................... 82 Table 19: Indicators to achieve Sustainable City................................................................................................... 83 Table 20: Indicators to achieve Smart City ........................................................................................................... 84 Table 21: Indicators to achieve Well-Governed City ............................................................................................ 85 Table 22: Investment cost of skill training. ........................................................................................................... 91 Table 23: Investment cost for urban road networks in AP .................................................................................... 92 Table 24: Strategies, programs, in-charge institutions and investment costs for key themes – Productivity ....... 92 Table 25: Investment for slum upgrading. ............................................................................................................. 95 Table 26: Investment for water supply network expansion. .................................................................................. 96 Table 27: Investment for water production. .......................................................................................................... 96 Table 28: Investment for sewerage network expansion. ........................................................................................ 97 Table 29: Investment for drainage network expansion. ......................................................................................... 97 Table 30: Investment for the expansion of solid waste collection service. ............................................................ 98 Table 31: Strategies, programs, in-charge institutions and investment costs for key themes – Inclusiveness ...... 98 Table 32: Investment for waste-to-energy facilities. ........................................................................................... 102 Table 33: Investment for the improvement of sewerage treatment ..................................................................... 103 Table 34: Investment for the improvement of solid waste treatment .................................................................. 103 Table 35: Investment costs per capita for transit and traffic support infrastructure. Source: HPEC (2011) ........ 104 Table 36: Investment for urban transit and traffic supporting systems................................................................ 104 Ernst & Young LLP | CPG Consultants

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Table 37: Strategies, programs, in-charge institutions and investment costs for key themes – Sustainability .... 104 Table 38: Investment for municipal GIS-based data hubs ................................................................................... 106 Table 39: Investment for Smart Cities ................................................................................................................. 107 Table 40: Investment for Mee-seva centers ......................................................................................................... 107 Table 41: Strategies, programs, and in-charge institution for key themes - Smart ............................................. 107 Table 42: Strategies, programs, and in-charge institution for key themes – Well-Governed ............................. 109 Table 43: List of critical vision projects .............................................................................................................. 110 Table 44: Prioritized programs for the first 3-year period ................................................................................... 111 Table 45: Summary of investment costs .............................................................................................................. 112

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List of Figures Figure 1: Three Pillars of Sustainable Urban Development at State Level ........................................................... 18 Figure 2: Concentration of Urban Population in Major Cities .............................................................................. 19 Figure 3: Concentration of Urban Population in certain districts. Data Source: Office of the Registrar General and Census............................................................................................................................................................. 19 Figure 4: Urban Development’s Impacts on Agricultural Land. Data Source: Office of the Registrar General and Census Commissioner 2011 .................................................................................................................................. 20 Figure 5: Urban Development’s Impacts on Ecologically Sensitive Areas. Data Source: Office of the Registrar General and Census Commissioner 2011 .............................................................................................................. 20 Figure 6: High Industrial Contribution on Districts Within Hyderabad – Bangalore – Chennai Triangle. Data Source: Office of the Registrar General and Census Commissioner 2011 ........................................................... 20 Figure 7: Concentration Of Low Value Land in South-West Districts. Data Source: Extracted from AP GIS land cover database ....................................................................................................................................................... 20 Figure 8: Major natural disasters in AP. Data Source: AP Natural Disaster Reduction Portal, National Institute of Disaster Management (NIDM), 2013 ................................................................................................................ 21 Figure 9: Urbanization rate of AP and India. Data Source: Office of the Registrar General and Census Commissioner 2011 ............................................................................................................................................... 21 Figure 10: Distribution of Urban Population Growth (1991-2011). Data Source: Office of the Registrar General and Census Commissioner 2011............................................................................................................................ 22 Figure 11: Limited Water Resource on South-West Region of the State. Data Source: Office of the Registrar General and Census Commissioner 2011 .............................................................................................................. 22 Figure 12: High Population Growth on South-West Region of the State. Data Source: Office of the Registrar General and Census Commissioner 2011 .............................................................................................................. 22 Figure 13: Proportion of Slum Population to Urban Population (2012). Data Source: Census of 2011, Ministry of Home Affairs, Government of India ................................................................................................................. 23 Figure 14: District-wise Percentage of Slum Households to Urban Households. Data Source: Census of 2011, Ministry of Home Affairs, Government of India. .................................................................................................. 23 Figure 15: High Proportion of Slum Population in Cities. Data Source: Census of 2011, Ministry of Home Affairs, Government of India. ............................................................................................................................... 23 Figure 16: Coverage of Solid Waste Collection Data Source: Census of 2011. .................................................... 25 Figure 17: Household Level Solid Waste Management Cover. Data Source: Census of 2011 ............................ 25 Figure 18: Road network density in km per 100 sqkm. Source: Infrastructure Sector Paper. ............................... 27 Figure 19: Road network availability in term of km per 1000 population. Source: Infrastructure Sector Paper... 27 Figure 20: Transport mode-Share (Visakhapatnam and class 1B cities). Data Source: Comprehensive Mobility Plan in Vaada 2013; Traffic and Transportation Policies and Strategies in Urban Areas in India, Final Report, Ministry of Urban Development, Government of India, New Delhi, March 1998. ............................................... 28 Figure 21: 4 Analytical Lenses – Analysis Framework ......................................................................................... 33 Figure 22: Vision Statement .................................................................................................................................. 38 Ernst & Young LLP | CPG Consultants

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Figure 23: The Process of Singapore's Early Development: Job Creation, Housing Development and Environmental Enhancement ................................................................................................................................. 39 Figure 24: Major sources of investment for City Development require Engagement Of Private Capital. ............ 40 Figure 25: Beyond Legal Protection and Institutional Enablers which are provided by Central and State Government, Market Positioning is the key for cities to distinct themselves from competitors. .......................... 40 Figure 26: Urbanization rate and GDP per capita (INR crore) of each district in 2011. Data source: Census 2011 ............................................................................................................................................................................... 41 Figure 27: A pathway to Productive and Inclusive City begins with Economic Positioning for Cities. ............... 41 Figure 28: Three steps to Housing Affordability and Slum Upgrading ................................................................. 42 Figure 29: Key measurements to achieve sustainability in urban development in AP. ......................................... 44 Figure 30: A Framework for City Sustainability in AP ......................................................................................... 44 Figure 31: Illustrative list of Smart Solutions (taken from Smart City Mission & Guidelines, MoUD, GoI, June 2015)...................................................................................................................................................................... 45 Figure 32: A Comprehensive Framework for AP Smart City ............................................................................... 46 Figure 33: Four pillar to form strong and well-managed ULBs ............................................................................ 47 Figure 34: Revenue realized by ULBs in AP. Source: Memorandum submitted to the Fourteenth Finance Commission by GoAP ........................................................................................................................................... 48 Figure 35: Revenue structure of ULBs in AP. Source: Memorandum submitted to the Fourteenth Finance Commission by GoAP ........................................................................................................................................... 49 Figure 36: cities selected for industrial development along VCIC and CBIC and industrial clusters of each AP's district. Source: Industry Sector Paper (2015) and AP Industrial Infrastructure Corporation. .............................. 52 Figure 37: 10 focused industrial sectors identified by GoAP. Source: Department of Industry & Commerce (2015) .................................................................................................................................................................... 53 Figure 38: Scale comparison between AP and South Korean. .............................................................................. 54 Figure 39: Interrelationship between industrial development policies and urban development policies in South Korean’s economic development strategy and GDP growth rate and Urbanization rate of South Korea from 1961 to 1976. .................................................................................................................................................................. 54 Figure 40: Urban Population Growth and Urbanization Rate 2015 – 2029........................................................... 55 Figure 41: 2011 urban system of AP based on GoI's classification. ...................................................................... 56 Figure 42: 2019 urban system of AP based on GoI's classification. ...................................................................... 57 Figure 43: 2029 urban system of AP based on GoI's classification ....................................................................... 58 Figure 44: Numerical breakdown of AP urban structure for 2011, 2019, 2022, and 2029. ................................... 59 Figure 45: Municipal Corporations, Municipalities, and Town Councils in AP in 2011. ..................................... 60 Figure 46: Ten most populous cities in AP in 2011. Data source: India Census 2011 .......................................... 60 Figure 47: Municipal Corporations, Municipalities, and Town Councils in AP in 2029. ..................................... 61 Figure 48: Major cities’ population in 2029. ......................................................................................................... 61 Figure 49: Annual growth rates of ULBs in AP from 2011 to 2029. .................................................................... 62 Figure 50: 10 fastest growing ULBs in AP from 2011-2029, based on cumulative growth rates. ........................ 62 Ernst & Young LLP | CPG Consultants

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Figure 51: Urban population distribution in 2011. Data source: Census Indian .................................................... 64 Figure 52: Projected urban population distribution in 2029. ................................................................................. 64 Figure 53: Unemployment rates of AP, India and the top-performance states. Source: Socio Economic Survey of Andhra Pradesh 2014-15 ....................................................................................................................................... 65 Figure 54: Rationale for Growth-pole Strategy ..................................................................................................... 66 Figure 55: Rationale for Industrial Node Strategy................................................................................................. 67 Figure 56: Mineral resources in each AP district. Source: Industry sector paper (2015). ..................................... 68 Figure 57: Smart Region is formed by an agglomeration of a city and surrounding rural areas to create a larger administration unit for efficient service delivery ................................................................................................... 69 Figure 58: Potential social services and infrastructure development tasks which can be managed efficiently by a Smart Region ......................................................................................................................................................... 69 Figure 59: AP urban system in 2029. .................................................................................................................... 70 Figure 60: Transformation directions set by AP Vision 2020. Source: GoAP ...................................................... 71 Figure 61: Composition of urban sector investment during 2015-2029 period. .................................................. 114 Figure 62: Investment for each vision theme. ..................................................................................................... 115

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Executive Summary

1. Executive Summary

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1.1. The context for urban development in Andhra Pradesh

2029 urban system of AP based on national city classification.

Andhra Pradesh (AP) is rapidly urbanizing. Urban population has grown by 7% in a decade, accounting for 30% of state population in 2011. This figure is expected to increase to over 43% in the next 15 years, contributing to an envisioned double-digit economic growth fueled by urban growth and development. Urban development encompasses the provision of employment opportunities, affordable housing, reliable and convenient services, clean and green environment, as well as building accountable and financially strong Urban Local Bodies (ULBs). The government has set a vision for AP to be among the leading three states in India by 2022 and a developed state by 2029, where paramount importance is placed on structured urban development. The potential for urban growth is exponential, given that AP cities currently house small- and medium-sized populations, rich in both human and natural resources, located in an economically strong region, and connected to global markets via India’s major seaports. Furthermore, the momentum set by the Smart City program, Industrial Investment initiatives and the building of Amaravati, a World-Class Capital City, offers the urban sector in AP a strong foundation and clear direction to move forward. However, the urban development in AP is not without challenges and this necessitates careful planning. This calls for environmental considerations, as prompted by the eminent threat of tropical storm surges along the coastal line, droughts in the West and current urban growth that encroach on ecologically-rich areas, such as the Krishna River Delta. Careful coordination at the state level is thus crucial to maintain long-term sustainability for both the natural environment and urban areas. The technical and financial independence of ULBs also needs to be addressed. At present, the heavy reliance on the state and central government to deliver sufficient urban

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service to urban populations has resulted in high proportions of urban population living in slum conditions and facing high unemployment rates. Through urban development in AP, the government aims to achieve three main goals namely: a better quality of life and social inclusion for urban residents, a higher rate of urbanization driven by industrialization and improvement of productivity, and sustainable urban growth that protects fertile lands and environmentally sensitive areas.

1.2. A vision for Andhra Pradesh cities AP cities are envisioned to be Productive, Inclusive, Sustainable, Smart and Well-governed. This vision reflects 10 key desired outcomes by 2029 that bring social, environmental and economic benefits to the residents and businesses of AP cities. The indicators and targets listed in each of the five categories are aligned with the tate, national and international’s major initiatives for sustainable and just development: 20 Nonnegotiable goals, Sustainable Development Goals 2015, Smart City and Atal Mission for Rejuvenation and Urban Transformation (AMRUT). The indicators are as follows:

Andhra Pradesh cities are envisioned to be Productive, Inclusive, Sustainable, Smart and Well-governed.

1.

Skilled labor force with low unemployed rate: Percentage of skilled labour sin urban areas will reach 78%, while the unemployed rate in AP cities will be as low as 0.6%; 2. High quality transportation systems: Urban road networks will be improved and expanded and public transport services will be provided in all major cities; 3. Slum-free cities: There will be no urban population living in slums; 4. 100% coverage of basic services: Coverage of all basic services such as water supply, drainage, sewerage connection, and solid waste collection will reach 100%; 5. 100% treatment of sewerage and solid waste: All collected sewerage and solid waste will be treated 100% to minimize the impact of urban development on the environment; 6. Greener environment: 9 sqm of green space per person across cities in AP will be provided to create healthier and greener environment; 7. Smart city: There will be at least 14 cities becoming a Smart City; 8. Smart infrastructure: Each ward will have a Mee-Seva center to serve as an information gateway for residents; 9. ULBs financial independence: All municipal corporations will achieve financial independence with regards to operation budgets; 10. Availability of ULB development master plan: All ULBs have an approved Master Plan. This ensures that AP cities’ performance are measured by parameters relevant to the state government’s policies and recognized by national and international institutions.

1.3. Vision Framework To guide the five major Visions for AP - Productivity, Inclusiveness, Sustainability, Smart and Good Governance, The government has developed five frameworks to serve as an overall direction to guide the development of AP cities over the next 15 years. First, AP cities will be the center of economic productivity through: ► 1/ strategic positioning based on local competitive advantages to attract investments into urban areas, particularly in industrial and infrastructure sector and form an ecosystem for growth;

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► 2/ State-level coordination in infrastructure and industrial development to reduce intra-state competition and achieve economies of scale; ► and 3/ skill training to enable a large portion of labour force entering manufacturing job market. Second, the growth of economy together with employment opportunities will form an enabling environment for an inclusive society where urban poor can have access to a decent income and quality housing. Affordable housing supply can be achieved through the relaxation of rental markets, land-use and density control. Slum areas will be developed into quality housing quarters through two initiatives: development control flexibility and planning integration. Slum areas will also be integrated into each city’s real estate market through infrastructure connection and service delivery. This increases land value for slum areas and unlocks housing equity for slum dwellers. Service delivery in urban areas will be improved significantly though Public - Private Partnership (PPP) interventions, which require effective and transparent ULB policies to monetize land, and separate regulatory bodies and municipal service delivery enterprises. Service deliver in small cities can continue to be effectively managed through the regional governance model, Smart Region Authority, where each city serves as a service hub for surrounding rural areas. Third, property ownership and job security incentivizes people to care for their living environment. There are three levels of environment management: State, City (i.e. ULBs) and Community levels. ► The State Government will conduct a Statewide Land-use Plan and coordinate among districts and cities to ensure urban development is controlled within economic and ecological carrying capacities. ► Cities will need to control urban growth through good planning, promote best practice in resource management and Disaster Management Plan. Cities will also engage communities and citizens into environmental protection activities through innovative programs that incentivize their participation. ► At Community level, education and grassroots movements are enforced to promote and instill individual awareness and care about sustainable, healthy living environments. Fourth, e-governance is crucial in the Smart AP Cities initiative, which capitalizes on Information and Communication Technology (ICT). The government proposes five dimensions in the development of smart cities: ► ► ► ► ►

Smart Ward: Delivering services to urban dwellers; Smart Planning: Forming urban physical environment; Smart Environment: Monitoring, managing and responding to environmental uncertainties; Smart Community: Educating, connecting and supporting great minds and their initiatives; Smart Living: Helping urban dwellers to have an affordable, secure and healthy living.

The implementation of this Smart City framework will be initiated through a State program to develop cities’ building capacity, ICT infrastructure planning and access to Central Government’s funding. The Government of Andhra Pradesh (GoAP) will also build integrated GIS-based Data Hubs for ULBs as smart decision-supporting systems for city planning and management including property tax information system. Lastly, strong urban governance is fundamental to implement all prior initiatives. AP ULBs are envisioned to be politically legitimate, financially independent and innovative, institutionally flexible, and citizens-and-businesses engaged. To achieve this vision, the government will execute three strategic initiatives as follows: ► Strengthening ULBs through the implementation of 74th Constitution Amendment Act (CAA), formulabased tax-transferring to ULBs, ownership of service-delivery parastatals and setting up a Urban Management Institute for municipal staff training; ► Reforming of revenue generation systems by setting up a GIS-based property tax system for ULBs and a Municipal Services Regulatory Commission at state-level to update ULBs service charges based on full O&M cost recovery basis; ► Consolidating land inventory in ULBs with Urban Development Authorities fully take charge of land planning, management and land sale to monetize land for PPP model. Ernst & Young LLP | CPG Consultants

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1.4. Spatial Strategies

AP urban system in 2029

AP’s existing clear urban structure consist of three agglomerations: Visakhapatnam in the North, Khrisna River Delta (i.e. Amaravati, Guntur and Vijayawada) in the Central and Chittoor in the South. With the State’s efforts in forming industrial clusters in every district to create balanced regional development, the concentration of urban population in these three regions is projected to decline slightly. In 2029, Krishna River Delta remains the most populous urban region, accounting for over 5 million people or 21% of all AP urban population. This is accredited to the Capital City, Amaravati, which is projected to be the fastest growing city in AP with an average growth rate of 26%. AP’s largest city, Visakhapatnam, forms a region of 4 million populations. Chittoor urban region, in contrast, is formed by a cluster of fast-growing medium-sized cities, with Tirupathi as the largest city in the region. ► While supporting the growth of these three large urban regions as key engines of urban growth in AP and striking a development balance across AP, GoAP will implement three Spatial Strategies: ► Growth-Pole Strategy: Despite funding and employment opportunity constraints,GoAP will initially focus on these three large urban regions to fulfill the State's vision to become India's gateway to AsiaPacific and a manufacturing hub. ► Industrial Node Strategy: AP’s coastline of 960 km and rich natural resources can be capitalized via the Industrial Node Strategy, which channels government and private funding into capital-intensive heavy industries in specialized cities along the coast and in Western districts in the next 15 years. ► Smart Region Strategy: Growth opportunities for small towns lie in their connection to and service for surrounding rural areas. Therefore, Smart Region Strategy allows agglomeration of towns and rural areas

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governed by regional development authorities that administer critical service delivery tasks. This contributes to regional coordination and achievement of efficiency through economies of scale. These strategic moves will be monitored and assessed by productive, inclusive, sustainable, smart and governance indicators which are adopted from international and national-recognized sets of indicators to allow a fast, compatible and sustainable integration of AP cities with the global economy.

Summary of Vision framework

1.5. Required Investment It is estimated that an investment of INR 52,300 crore for 2015-2019 period, INR 44,200 crore for 2020-2022 and INR 112,500 for 2023-2029 period to is required to realize productive, inclusive, sustainable, smart and well-governed AP cities by 2029. The average investment per annum will be INR 13,057 crore, lowest during the first period. The average annual investment increases to INR 14,733 crore during the second period and to 16,071 during the last period. This increment in annual investment overtime is necessary to support the increase in economic and population size of AP cities. GoAP recognizes the upmost importance of making AP cities economically vibrant and socially sustainable. Almost 90% of investment into AP’s urban sector will be mobilized to achieve these two development goals. Urban road improvement and expansion, slum upgrading, skill training and water-related infrastructure are sectors are recognized as investment-focused sectors.

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Investment into urban sector during three development period: 2015-2019, 2020-2022 and 2023-2029.

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Key issues & challenges

Guiding principles

Modest urbanization with rapid urban population growth

Cities as an engine of growth and support 2-digit economic growth

High level of unemployment rates and poverty in cities

Provision of job opportunities to all city residents

High percentage of urban population living in slum condition

Slum area upgrading and service delivery is at the priority of planning and housing policies

Insufficient urban infrastructure and basic services Exposure to natural disaster along coastal area and water shortage in Western districts

Basic service delivery to all households

Major urban regions should be planned to avoid exposure to environmental risks

Urban expansion affects fertile agricultural lands and ecologically sensitive areas

Protection of fertile agricultural land and environmental sensitive areas

Insufficient capacity in sewerage and solid waste treatment facilities

Protection of community and ecological health to ensure long-term urban livability and economic vitality

Opportunity to capitalize on advanced technologies to improve on service delivery and governance

Cities will capitalize on Smart City movement and AP’ strength in IT to transform their decision making systems and service delivery

ULBs lacking of management capacity and financial strength

ULBs must be political legitimate, management capable and financial independence in operation

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Strategic Priorities for the Vision

1.6. Summary of Key Initiatives Key themes

Strategic initiatives

Productivity

• • • •

Growth-Pole & Industrial Node Strategies State coordination in infrastructure and industrial investment Skill training for urban residents and migrants Improve and expand urban road networks

• • • •

Integration of slum into city development Smart Region Authority PPP model in service delivery Improve and expand to 100% coverage for water supply, sewerage, drainage and solid waste collection systems

Inclusiveness

Sustainability

• • • • •

Growth-pole Strategy position 3 major urban regions in low-risk locations Disaster management plan for ULBs State-level coordination in land use and environmental protection Innovative solutions for solid waste management Improve and expand to 100% treatment level of sewerage, solid waste systems • Building urban public transport systems for all Class-I cities

Smart

• Integrated GIS-based Urban Data Hub • Smart City development framework for AP cities • Expansion of information hub / Mee-seva centers to efficiently provide information and governmental services

Good governance

• Strengthening ULBs politically and financially • Reforms of revenue generation systems • Improve land inventory through planning and management to employ PPP model

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2.

Existing Spatial Organization & Physical Conditions

2. Existing Spatial Organization & Physical Conditions

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In analyzing the existing conditions, it is necessary to understand the spatial organization and physical conditions regarding inter-city and intra-city considerations. These include location, size, and the growth quality of urban development.

2.1. Analysis Framework

Figure 1: Three Pillars of Sustainable Urban Development at State Level

Formulating urban strategies at state level requires holistic integration of both inter-city and intra-city considerations. Inter-city considerations look into the formation of AP’s urban system in terms of where and the magnitude of urban growth should occur given the economic basis and carrying capacity of each location. Intracity considerations assess the quality of growth and look into how urban development offers better living conditions for people to maximize economic opportunities for businesses and promote healthy ecosystems. Without inter-city considerations, intra-city aspirations would be achieved at high financial and environmental costs. Without intra-city considerations, urban growth leads to overcrowding, poor quality of life for their residents and a burden on the city managers and politicians. However, urban development that has a holistic approach of both inter-city and intra-city considerations occurs at suitable locations, sustainable size and in healthy quality will be an engine of growth and a magnet of investment. Such developments, built upon Threepillars of sustainable urban development: location, size and growth quality, play a crucial role within the longterm visioning exercise of AP’s transformation into a developed state in the next fifteen years.

2.2. Location of Growth 2.2.1. Polarization in Urban Growth Due to the lack of job opportunities and amenities in small and medium towns, urban population is increasingly concentrated in few major cities in the North and central of AP, namely: Visakhapatnam and Vijayawada. These two largest cities contributed over 28% of urban population growth in the state during 1991-2011 and account Ernst & Young LLP | CPG Consultants

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for 22.7% of the total urban population in AP in 2011. The urban population has also grown at three-digit rates at district level in Northern and Southern districts of Visakhapatnam, Srikakulam, Cuddapah and Chittoor. Visakhapatnam, Krishna and Guntur districts combined together account for 37.8% of the total urban population of the state in 2011. With the fast growth of urban population in Chittoor district in the last two decades, AP now has three growth hubs: Visakhapatnam in the North, Krishna and Guntur in the central areas and Chittoor in the South. These growth hubs are also home of the three newly designated 'megacities': Visakhapatnam, the new state capital city and Tirupathi which will be planned to accommodate increasing demands of investment, production, housing, and public services. The development of these three megacities will help in achieving a balanced development among AP’s regions and harnessing the state’s strategic location within HyderabadBangalore-Chennai triangle.

Vijayawada

Visakhapatnam

Guntur

Chittoor

Figure 2: Concentration of Urban Population in Major Cities Data Source: Office of the Registrar General and Census Commissioner 2011

Vijayawada

Visakhapatnam

Guntur

Chittoor

Figure 3: Concentration of Urban Population in certain districts. Data Source: Office of the Registrar General and Census Commissioner 2011; Ministry of Home Affairs, Government of India

2.2.2. Urban Developments Impacts on Natural Environment The impact of location of growth of urban development on natural environment can be seen from two major factors: agricultural land and ecologically sensitive areas. Known as the “Rice Bowl of India”, AP’s agriculture sector contributes 27.29% (2012-2013) to the Gross State Domestic Product (GSDP). Figure 4 depicts the spatial distribution where agriculture is the predominant land use in the state of AP. In respect, with four major rivers of India (Godavari, Krishna, Penna, and Thungabhadra) flowing through the state, agricultural land is heavily concentrated in their deltas. Godavari and particularly Krishna River Deltas have the most fertile agricultural land in the country and also high concentration of urban population. Guntur and Krishna Districts house almost a quarter (24%) of AP urban residents. Rapid urbanization has caused massive conversion of crop land into nonagricultural uses. Over a 12 year period from 1996 to 2007, East Godavari and West Godavari Districts alone have acquired 87,443 acres of crop land for non-agricultural purposes. Without careful planning, rapid urban growth in these deltas may threaten valuable crop land. Geographically, most cities in AP are located away from ecologically sensitive areas. Sri Venkateswara National Park, Machilipatnam Coastal wetland, and Coringa Wildlife Sanctuary are examples of ecologically sensitive areas that are in close proximity to major cities: Tirupathi, Machilipatnam, and Kakinada. To minimize impacts of urbanization on ecologically sensitive areas, cities that are located at the edge of ecologically sensitive areas will require more cautious planning growth controls such as adopting a growth control boundary.

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Vizi Hy Raja

Sri Visak Kakinada

K

Machilipatnam

G

K

O An

Major urbanization

N C

Ecologically

Agricultur in fertile

Tirupathi

sensitive

al land

Ti C

Ba

Figure 4: Urban Development’s Impacts on Agricultural Land. Data Source: Office of the Registrar General and Census Commissioner 2011

Figure 5: Urban Development’s Impacts on Ecologically Sensitive Areas. Data Source: Office of the Registrar General and Census Commissioner 2011

2.2.3. Rapid Industrialization And Urbanization the South-West Area of AP

Vizi Hy Raja

Hyderabad

Sri Visak

K G

K

O An

N Low value land

Bangalore Ba

C

Ti C Chennai

Figure 6: High Industrial Contribution on Districts Within Hyderabad – Bangalore – Chennai Triangle. Data

Figure 7: Concentration Of Low Value Land in South-West Districts. Data Source: Extracted from AP GIS land cover

Source: Office of the Registrar General and Census Commissioner 2011

database

Excluding Visakhapatnam in the North, industrialized districts are located in the South-West of the state and have been growing relatively decent due to their strategic location within Hyderabad – Bangalore – Chennai Triangle. As a consequence, urban population has increased significantly in this area, particularly in Chittoor and Cuddapah Districts where urban population almost doubled within 20 years from 1991 to 2011. In contrary, these districts mostly have low land values with abundant fertile land for agricultural production with limited supply of water. The latter is critical since the large agricultural land and heavy industrial sectors require extensive amount of water for production. This underscores the need for careful planning for industrialization in order to position industry sector as a sustainable growth engine in this region.

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2.2.4. Urban Developments Exposure to Natural Disasters AP coastal belt is likely to be the most vulnerable region in the State due to cyclones. Coastal districts from Srikakulam to Nellore, especially areas between the city of Ongole (Prakasam) and Machilipatnam (Krishna), are most vulnerable to high storm surges. In addition, with four major rivers flowing through the State, certain areas would be flood-prone and thus need further considerations. Coastal and river cities, particularly those located within Krishna and Godavari Deltas such as Ongole, Machilipatnam, Kakinada (East Godavari), Vijayawada (Krishna), etc. are also exposed to flooding. In contrast, the Western part of AP experiences drought risk that has severely impact the region’s GDP. As such, the high storm surges, drought risks, and flooding should be taken into considerations as growth control factors.

Kakinada

Ongole

Machilipatnam

Figure 8: Major natural disasters in AP. Data Source: AP Natural Disaster Reduction Portal, National Institute of Disaster Management (NIDM), 2013

2.3. Size of Growth 2.3.1. Modest but Rapidly Increasing Urbanization Based on the Census of 2011, AP is modestly urbanized at a rate of 29.6%, which is lower than the national average rate of 31.2%. However, urbanization in AP is happening at a faster pace: from 2001 to 2011 the urban population increased by 41.5% from 10.3 million to 14.6 million while rural population increased by only 2.9% during the same period. As a result, the urbanization rate of AP increased from 22.8% in 2001 to 29.6% in 2011. Figure 9: Urbanization rate of AP and India. Data Source: Office of the Registrar General and Census Commissioner 2011

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2.3.2. Informal Urbanization

Ward of outgrowth 9%

The growth of urban communities in rural and peri-urban areas (i.e. 'census towns') was very significant, contributing about 25% of urban population growth from 1991 to 2011. The lack of proper planning institutions and necessary urban infrastructure required to support these urban settlements eventually lead to severe social, health, and environmental issues. The effect of this is far more prevalent in census towns.

Census town 25%

Nagar Panchayat 4% Municipal Corporatio n 36% Municipali ty 26%

Figure 10: Distribution of Urban Population Growth (1991-2011). Data Source: Office of the Registrar General and Census Commissioner 2011

2.3.3. Distribution of Water Resources The water capacity per capita varies from North to South in AP. Water resources are mainly concentrated at the central and Northern area of the State, while the South-West area lacks in water resources. The water capacity per capita in central area, like Krishna district and East Godavari, can reach up to 4,000 to 9,000 m3 while the South-West area has the lowest with 0-200 m3 per capita – nearly 1/30 of those in central areas. Despite lacking water resources, the Southern districts grow relatively fast from 2001 to 2011. In contrary, the Northern region experienced relatively low population growth albeit having better conditions of water resources. Looking at these contradictions, further actions on water supply provision is required in order to support the population growth.

Region with limited water resource

Region with high population growth

Figure 11: Limited Water Resource on South-West Region of the State. Data Source: Office of the Registrar General and

Figure 12: High Population Growth on South-West Region of the State. Data Source: Office of the Registrar General and

Census Commissioner 2011

Census Commissioner 2011

2.4. Quality of Growth Similar to many other cities in India, the quality of urban development in AP plays a crucial role within the longterm visioning exercise to transform into a developed state in the next fifteen years. Through discussions among key government personnel, local experts and stakeholders, the following issues are raised as critical considerations for the future of AP’s cities: slum alleviation, affordable housing, access to clean water and

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sanitation, solid waste management and dependence on private transportation modes and traffic congestion 1. The growth of the cities will be the foundation for social welfare and stimulation for economic development if AP can resolve these issues.

2.4.1. Slum Population 45.0%

38.3%

40.0% 35.0% 30.0% 25.0% 20.0%

17.4%

15.0% 10.0%

4.5%

5.0%

2.9%

1.3%

0.0% India

Andhra Pradesh

Assam

GOA

Kerala

Figure 13: Proportion of Slum Population to Urban Population (2012). Data Source: Census of 2011, Ministry of Home Affairs, Government of India

Andhra Pradesh Kurnool Ananthapuram Kadapa Chittoor SPSR Nellore Prakasham Guntur Krishna West Godavari East Godavari Visakhapatnam Vizianagaram Srikakulam

38.3% 44.5% 40.9% 36.3% 26.4% 32.8% 34.2%

44.1% 38.2% 42.2% 34.0% 40.8%

44.2% 32.0%

Figure 14: District-wise Percentage of Slum Households to Urban Households. Data Source: Census of 2011, Ministry of Home Affairs, Government of India.

Figure 15: High Proportion of Slum Population in Cities. Data Source: Census of 2011, Ministry of Home Affairs, Government of India.

With 38.3% urban population living in slum areas, the state of AP has the highest ratio of slum population to urban population in India. Nationwide, 17.4% of total urban populations are living in slum, less than half of AP’s figure. Slum population usually faces a shortage of basic infrastructure and services to sustain a healthy living environment. In slum area, 32.18 % households do not have safe drinking water facility, 17.64% households do not have latrine within house or nearby, 40.26% of households live in houses with single room or no room, and 9.29% households do not have cooking facility in the house and 13.67% use firewood for cooking 2.

1 2

AP State Government, 1999 and the authors’ interview with state government’s key personnel National Health Mission – Program Implementation Plans, 2013 - 2014

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At the district level, the top three districts with the highest ratio of slum households to urban households are Kurnool, Vizianagaram, and Guntur with 44.5%, 44.2%, and 44.1% respectively. In India, Kerala has the best performance with lowest slum population ratio of 1.3% in the urban area.

2.4.2. Access to Drinking Water Availability and access to safe drinking water improves human health and contributes to economic productivity. Listed below is the current condition of provision and coverage of drinking water supply in AP, in comparison to nationwide standards. ► Coverage Level of Drinking Water The average ratio of urban households in India with drinking water provision is 92%. Puducherry, which has the best performance of drinking water coverage, managed to provide 99.3% of urban households with drinking water. The state of AP is doing relatively well in providing drinking water to urban households with 88.8% coverage.3 ► Water Supply per Capita The national average for water supply per capita is 76 liters per capita per day (lpcd). In the state of AP, the water supply per capita per day is 115.6 lpcd which is almost 40% higher than the national average. However, this is still considered low and way below the benchmark of 135 lpcd.4 Among the 13 districts in AP, Visakhapatnam has the best performance with 167.2 lpcd of water supply per capita per.5 ► Frequency of Drinking Water Supply Despite high performance in water supply coverage and quantity, the frequency of drinking water supply is very limited. At present, 29 ULBs (26% of all ULBs) in AP receive supply twice a day, 48 ULBs (45% of all ULBs) have drinking water only once a day while 27 ULBs (22%) are having drinking water supply either once every two or three days.6

2.4.3. Waste Management ► Sewage Coverage The coverage of sewerage network is very low in AP cities. Sewerage network services are available only in 6 Mission cities. These cities include: 10% in Guntur, 18% in Proddatur, 19.56% in Vizag, 49% in Kadapa, 70% in Vijayawada and 79% in Tadipatri7. The latest data available on sewerage connection reveal that the average coverage level is only 31% in pre-bifurcation AP8.

3

Census of 2011, Ministry of Home Affairs, Government of India Draft for Suggestions, Strategy Paper Urban Mission AP, Government of AP, 2014 5 Ministry of Urban Development, January 2012 6 Ministry of Urban Development, January 2012 7 Ministry of Urban Development (2015). Andhra Pradesh seeks to ensure basic infrastructure in 31 AMRUT cities at a cost of Rs.28,756 cr. Retrieved from http://pib.nic.in/newsite/PrintRelease.aspx?relid=128541 8 Ministry of Urban Development (2012). Service levels in Urban water and Sanitation sector. New Delhi: Ministry of Urban Development. 4

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Table 1: Wastewater generation and treatment

City/town

STP location

STP commissioned in (Year)

Capacity

Technology employed

1.

Rajahmundry

Hukumpet

2009

30 MLD

UASB

2.

Tirupathi

Tukivakam

1999

50 MLD

Oxi-Pond

3.

Pulivendula

Pulivendula

2007

6.5 MLD

Oxi-Pond

Ramlingeshwar Nagar

2005

10 MLD

Ex-Aeration

Jawahar nagar auto nagar

2004

10 MLD

Ex-Areation

Ajith Sing nagar

1968

27 MLD

ASP

Ajith Nagar

2011

40 MLD

UASB

Ramalingeswar nagar

2012

20 MLD

UASB

Appugarh

2001

25 MLD

UASB

Old city, VSP

2009

38 MLD

MBR

Mudasalova

2011

13 MLD

MBR

GVMC Madeenbagh, VSP

-

2 MLD

MBR

4 MLD

MBR

No

4.

5.

Vijayawada

Vishakhapatnam

Kommadi 6.

Tadipatri

7.

Puttaparthi

CPI Colony

2008

8 MLD

OP

Yallanur

2008

3.5 MLD

OP

Durgamma Temple

1999

0.5 MLD

OP

Sai nagar

1999

0.5 MLD

OP

100.0%

94.0%

95.6%

80.0% 61.7%

60.0% 40.0%

39.0%

37.0%

41.9%

20.0% 0.0%

Figure 16: Coverage of Solid Waste Collection Data Source: Census of 2011.

Figure 17: Household Level Solid Waste Management Cover. Data Source: Census of 2011

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On average, the sewerage treatment rate in AP cities is 21.4%9, lower than the national average at 32.0% and less than 50% of Karnataka’s treatment rate of 67% (highest among all states in India). Krishna District has the highest treatment capacity rate which is 71.1%. In contrast, there are five districts (Kurnool, Nellore, Prakasham, West Godavari, and Srikakulam) in AP with no indication of sewerage treatment facilities. ► Coverage of Solid Waste Collection and Service The coverage of solid waste collection in AP is 87.1% which is double compared to national average level at 39%10. At the district level, East Godavari has the highest coverage at 102.3% and SPSR Nellore with the lowest coverage at 55.7%. Three big cities in AP have been chosen to undertake evaluation on the coverage of solid waste treatment – namely Guntur, Vijayawada, and Visakhapatnam. Compared with the national average at 39%, these three cities in AP have a very good performance with more than double of the national figure. They also perform much better compared to the average of cities within the same class. However, to reach the recommended target of 100%, AP still has some room for improvement. ► Treatment of Solid Waste The total Municipal Solid Waste (MSW) generated in the state of Andhra Pradesh is 7,033 TPD (tons per day). Out of the total MSW generated in the state, Vishakhapatnam generates 19.5%, Rajahmundry region generates 28.5 %, Guntur region generates 24.3% and Anathapur region generates 27.8%. The total MSW treated (by composting /vermi-composting) is only 7% of the total MSW generated. The capacity of waste treatment facilities in Andhra Pradesh is significantly inadequate. Table 2: Solid waste collection and treatment capacity of Andra Pradesh cities

Name of district

Waste generated (TPD)

Collection of waste (TPD)

Total waste processed (TPD)

Total waste disposed (TPD)

Collection efficiency (%)

Treatment efficiency (%)

Vishakhapatnam Municipal Corporation

941

722

0

687.28

77%

0%

Kakinada Corporation

240

220

2

218

92%

1%

Rajahmundry Corporation

280

280

2

218

100%

1%

Eluru Corporation

82

82

12

70

100%

15%

Vijayawada Municipal Corporation

550

450

0

450

82%

0%

Guntur Municipal Corporation

450

450

10

428

100%

2%

Ongole Corporation

116.5

114

0

113.5

98%

0%

9

Waste water generation is estimated based on rule-of-thumb basis and evaluated during stakeholder consultation meetings. The generation is calculated as 80% of total water supplied to each district 10 Ministry of Urban Development, January 2012

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Nellore Corporation

250

250

0

250

100%

0%

Ananthapur Corporation

125

116

0

116

93%

0%

Chittor Corporation

65

65

0

63

100%

0%

Tirupathi Corporation

190

190

20

160

100%

11%

Kurnool Corporation

210

205

0

0

98%

0%

Kadapa Corporation

206

180

5

5

87%

2%

2.4.4. Urban Road Network There is a very strong positive correlative between a city’s economic development and the quality of its road network and Road system as they provide connection between production sites and markets, people and job opportunities.. Therefore an important KPI on productivity is to address the extension of road network. Although there is no data available on the urban road network in AP, information on the overall state road network reveal that AP’s road infrastructure is lagging way behind as compared to India average network density and population accessibility.

Figure 18: Road network density in km per 100 sqkm. Source: Infrastructure Sector Paper.

Figure 19: Road network availability in term of km per 1000 population. Source: Infrastructure Sector Paper.

HPEC reports on urban infrastructure provide an alternative view of the condition of road networks at municipal level (Table 3). The data show that there is a high level of service backlog in both major roads in larger cities and in non-major roads in smaller cities.

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Table 3 : Service backlogs of urban road in percentage. Source: HPEC (2011).

City class size

Major roads

Collector roads

Access road spaces

Class IB

80

66

63

Class IC

37

85

80

Class II

0

92

35

Class III

0

92

35

Class IV+

0

92

35

2.4.5. Transit Mode Share With regards to transit mode-share in AP cities, data is available only for Visakhapatnam, the state’s largest city. At present, Visakhapatnam has a higher percentage of public transport share compared to national average level. However, there is still much room for improvement to reach the desirable 50%-60% public transport share proposed by Ministry of Urban Development (MoUD). Meanwhile, the private transport share in Visakhapatnam is very low at 17% compared to the national figure of 31%. Steps have been taken for initiating the metro rail project for Visakhapatnam and Vijayawada. The work is expected to begin by June 2015 and one section of the metro is expected to be commissioned by 2019.

2.4.6. Living Environment One of the critical elements affecting the livability of cities and towns is air pollution. With the rising of vehicular population and industrialization, there has been a drastic deterioration of air quality. In major industrial hubs such as Visakhapatnam, Suspended particulate matter (SPM) and Respirable Suspended Particulate Matter (RSPM) are the pollutants of major concern. Visakhapatnam used to be one of the Critically Polluted Areas identified by Comprehensive Environmental Pollution Index (CEPI).

80% 70%

National Average for Class IB Cities Visakhapatnam

60% 50% 40% 30% 20% 10% 0% Mass Public Transport

Walk+ Cycle

Private Vehicle

Figure 20: Transport mode-Share (Visakhapatnam and class 1B cities). Data Source: Comprehensive Mobility Plan in Vaada 2013; Traffic and Transportation Policies and Strategies in Urban Areas in India, Final Report, Ministry of Urban Development, Government of India, New Delhi, March 1998.

On the other hand, global warming also imposes threat on the quality of urban environment: An increase in the temperature by 2-3 degree C may increase the incidence of malaria by about 3-5the rising trend in rainfall patterns also heightens the risks of increased vector borne diseases.

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3. Engaging the Stakeholders

3. Engaging the Stakeholders

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The government engaged with the relevant stakeholders to understand the existing context and conditions, as well as required elements for the growth in urban development of AP. Below is the summary of stakeholder meetings that have been conducted for the Urban Sector Mission. The detailed outcome of each meeting is described in Appendix III. ► STAKEHOLDER MEETING 1 Agenda: Meeting with Mr. Giridhar Armanee (Principal Secretary to Government MAUD) Date: 14th March 2015

Time: 9 .30 am

Venue: Secretariat Building

Attendees Stakeholder: Principal Secretary to Government MAUD Consultant: Mr. RBSR Prasad (Project Lead – EY)

► STAKEHOLDER MEETING 2 Agenda: Meeting with Mr. Thimma Reddy director of DTCP Date: 25th March 2015

Time: 5 .30 pm

Venue: DTCP Office Mythri Vihar, Ameerpet, Hyderabad.

Attendees Stakeholder: Director, Directorate of Town and Country Planning and other staff members Consultant: Mr. RBSR Prasad (Project Lead – EY), Ms. Padmaja (EY), Mr. Riddhi Vyas (EY)

► STAKEHOLDER MEETING 3 Agenda: Presentation on vision framework and discussion with members of AP Urban Mission to understand the issues & needs in urban development sector, particularly at ULB level Date: 30th April 2015

Time: 9 am-3:30 pm

Venue: ISB, Hyderabad

Attendees Organizers: Prof. S. Ramanarayan (ISB), Prof. Rajeshwar Upadhaya (ISB), Ms. Mamatha Reddy (ISB). Stakeholder: Members of Urban Mission including Mr. Madhusudan Reddy (APUFIDC), Ms. Lavanya (APUFIDC) Consultant: Mr. Karthik Karkal (CPG), Mr. Nguyen Do Dung (CPG), Ms. Riddhi Vyas (EY)

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► STAKEHOLDER MEETING 4 Agenda: Attending Urban Mission Induction Program – Environment and Disaster Management Date: 1st May 2015

Time: 9 am-3:30 pm

Venue: ISB, Hyderabad.

Attendees Organizers: Prof. S. Ramanarayan (ISB), Prof. Rajeshwar Upadhaya (ISB), Ms. Mamatha Reddy (ISB). Stakeholder: Members of Urban Mission including (APUFIDC)

Mr. Madhusudan Reddy (APUFIDC), Ms. Lavanya

Consultant: Mr. Karthik Karkal (CPG)

► STAKEHOLDER MEETING 5 Agenda: Presentation to the Principal Secretary to Government MAUD – Proposed Urban Strategies to Support 2-digit Growth and Implementation Programs Date: 4th May 2015

Time: 12.30 – 1.30 pm

Venue: Secretariat Building

Attendees Stakeholder: Mr. Giridhar Armanee (Principal Secretary to Government MAUD) Consultant: Mr. Karthik Karkal (CPG), Mr. Nguyen Do Dung (CPG)

► STAKEHOLDER MEETING 6 Agenda: Presentation to the Representative of Urban Mission – Proposed Urban Strategies to Support 2-digit Growth and Implementation Programs

Date: 5th May 2015

Time: 4.30 – 5.30 pm

Venue: Office of Municipal Administration and Urban Development, Secretariat Building, Hyderabad

Attendees Stakeholder: Ms. G.Jayalakshmi (Representative of Urban Mission and Secretary of Municipal Administration and Urban Development) Consultant: Mr. Karthik Karkal (CPG), Mr. Nguyen Do Dung (CPG)

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4. Institutional Challenges

4. Institutional Challenges

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Institutional challenges deal with all the intangible factors that influence urban development in the state of AP. Four analytical lenses are used to analyze these intangible factors.

4.1. Analysis Framework: Four Analytical Lenses The Four-analytical Lenses streamline the complex sets of information into a more logical and measureable framework to transform the vision into implementable goals and programs. These lenses are used as the main analysis framework for two major stages – initially to identify and diagnose issues, and subsequently to develop strategies and creating pertinent solutions. The Four-analytical lenses are categorized into Ecosystem, Governance, Institutional Structure, and Funding. Following herewith are some of the benefits of The Four Analytical Lenses: ► ► ► ► ►

Streamline concerns and issues Performing measurable assessments Identify gaps Proposing targeted solutions to the pertinent concerns Robustness and completeness in highlighting issues and proposing solutions ► Ease in translating solutions based on international benchmarks and local context ► Ease in attracting investments into the city ► Ability to use this to evaluate the KPIs of agency or statutory board. Figure 21: 4 Analytical Lenses – Analysis Framework

These Four-analytical lenses are used as a framework to analyze the institutional challenges in the form of issues and opportunities that AP cities are facing through meetings between the key government personnel and stakeholders.

4.2. Ecosystem This lens seeks to analyze issues and challenges that hinder the prevalence of a planned & clear value proposition of the city and a strong ecosystem to support the urban agglomeration. Some of the key challenges are: ► Lack of Context-based Positioning: Cities will need to conduct studies on their competitive advantages as well as local resource availability issues such as lack of water, skilled labour and natural resources. These issues are important considerations to ensure that every decision made will respond to specific problem and issues that exist on the ground. ► Inadequate Development Vision and Direction: Central and state government’s plans and visions need to be align so that ULBs can receive funding. However, city development visions and directions for ULBs are not initiated with adequate positioning and are not aligned with central and state government’s plans. This result in an unclear and unplanned development direction for ULBs and more importantly, ULBs may fail to meet pre-requisites for funding allocation. ► Lack of Development Impact Assessment: Many urban development projects in AP are executed without sufficient impact assessment. Some of the cases that require higher level of attention from implementation bodies are resettlement and rehabilitation of villages affected by the new development, land title and acquisition issues, as well as housing unavailability. Development impact assessment is one of the aspects

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often being taken for granted. Without a development impact assessment, any good initiative will become a burden for the planned development.

4.3. Governance This lens seeks to analyze issues and challenges relating to capacity building of the various statutory bodies and agencies in realizing and managing the projects. Some of the key challenges are: ► Poor ULB Capacity Building Schemes: Poor ULB staff capacity is a common issue raised by both state and city administrators. There are schemes initiated to train ULB staffs. However, low staff attendance and IT problems during training compromise the success of those initiatives. ► Insufficient Staff at ULBs: Lack of staff for projects preparation, implementation, and monitoring are the basic issues other than staff’s capacity that occurs in most cases. This issue will need to be solved with appropriate programs and policies. ► Needs for an Enhancement of E-Governance Initiatives: Simplified and standardized web interface with Government is the fundamental issue if e-government initiatives are to be realized. This lens seeks to analyze issues and challenges on creating an institutional structure with clearly defined roles, legal framework and governing power. Some of the key challenges are: ► Lack of Clear Institutional Role Definition: There is a lack of clarity in institutional role on project funding, policy making, and project implementation that causes confusion. ► Incomprehensive Government Data Hub: Although there have been many efforts completed in data collection, access to government’s data is still a challenge due to the fragmentation in data storage and ineffectiveness in data integration initiatives. Initiatives on building a common Data Hub will require supports by all stakeholders involved. ► Ineffective Interdepartmental Coordination: Weak coordination in project management and long periods of time taken to grant permission causes time-lag and spillover problems like dragging of project duration, unnecessary cost escalation, abandonment of ongoing projects, etc.

4.4. Funding This lens seeks to analyze issues and challenges of financial mechanism at various levels from state machinery to urban local bodies (ULBs) and translate plans into implementable projects. Some of the key challenges are: ► Insufficient Funding for ULBs: Insufficient funding provision and incorrect funding estimates that lead to abandonment of projects is one of the main issues. Insufficient funding occurred in some cases are caused by absence of clearly planned development (e.g. lack of funding from Jawaharlal Nehru National Urban Renewal Mission (JNNURM)), and unreachable funds that are being managed by the state. ► Weak Funding Control at ULBs’ Level: Long and ineffective State-ULB and inter-departments funding permission protocol are the main signs of weakening funding control. Without any ability to control their own funding, ULBs will always be dependent on the state which will lead to unbalance development within the state and ULBs. ► Lack of Revenue Generated Charge Scheme: ULBs must look for new user-charge schemes to increase revenue instead of fully depending on direct taxes and funding allocation from higher-levels of government.

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5. SWOC Analysis

5. SWOC Analysis

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Base on both analysis on physical/spatial conditions and institutional challenges of AP, qualities and development context of AP cities are categorized into strength, weakness, opportunities and challenges. Strengths

Weakness

► Emerging three urban growth hubs with high concentration of population and industrial development near major mega infrastructures (i.e. airports, ports, highways, etc.) to form economic agglomerations ► Rapid urbanization with many national and state government’s investment initiatives to attract private capital ► State with the second longest coastline with one of the largest ports in the country ► High water supply capacity per capita and high solid waste collection service coverage in urban areas help to enhance liveability ► Strong willingness to improve government efficiency

► Low capacity of sewerage and solid waste treatment may cause environmental consequences ► High proportion of slum population in urban areas affecting residence’s wellbeing and city image ► Lack of water in the South-West of the state ► Weak ULB governance ► Lack of development vision and direction for cities

Opportunities

Challenges

► Strategic location within Hyderabad – Bangalore Chennai industrial triangle and the potential to be the gateway to the Asia-pacific. ► Opportunity of developing Vizag – Chennai and Bangalore – Chennai Industrial Corridors ► The development of the new capital to provide a strong momentum for change

► Risk of natural disaster ► Environmental management and agriculture protection against urban expansion ► Lack of full control of major water resources ► Competition from other surrounding urban regions

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6. Vision

6. Vision

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6.1. Vision Statement

Figure 22: Vision Statement

Through analysis of current conditions and stakeholder engagement, five visions for AP cities are proposed as follow: ► Productive City: AP Cities will be national and international hubs for production and business that offer a majority of residents with a means to earn their living. ► Inclusive City: AP Cities will be the societies that afford all residents opportunities and capacities to live in decent housing condition, have access to basic services and share equitably the social benefits of city life. ► Sustainable City: AP Cities will be pioneer developments in minimizing the impact on fertile agricultural lands, ecologically sensitive areas and reducing per capita consumption of natural resources to sustain communities and enhance their liveability. ► Smart City: AP Cities will be incubators that relentlessly capitalize on advanced technologies to find new ways to inform policy making, manage complexity, increase efficiency, reduce costs of service delivery and improve quality of life for all residents. ► Well-governed City: AP Cities will be the centre of accountable, efficient and open governance with strong and independent finance system that empower citizens and support growth.

6.2. Vision Framework The government is embarking on a grand vision to transform the new state of AP into a developed state in the next fifteen years. In the post industrial world that we currently live in, economic development is one of the key measure of success for governments and its citizens. Based on this vision document, the government will move AP towards economic success by promoting job creation through industries over the next fifteen years. This will position cities of AP to be at the forefront of economic growth and the catalytic incubators for this economic transformation. For this urbanization to be managed and set in the right direction, the government has introduced a five-pronged vision for the future cities of AP: Productive City, Inclusive City, Sustainable City, Smart City and WellGoverned City. The framework for each of the vision items defined below is created as a tool to guide the urbanization in the future cities. The framework under each vision item is tailor-made to fit the context of AP. Ernst & Young LLP | CPG Consultants

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Case Study: Singapore In the 1960s, Singapore faced similar challenges which AP experiences today: a small and premature manufacturing sector, high unemployment rate, fast growing population, and over 30% of the city residents living in slum condition. Singapore government, led by Prime Minister Lee Kuan Yew, identified job creation through labor-intensive industries as the first priority of the government. At the same time, the government also started to think about forming an economic cluster for entreport-trade related processing industries to leverage on Singapore’s locational competitive advantage. After growing the economy (GDP increased by 2.5 times in 10 years from 1960 to 1970) and increasing workers’ income, Singapore government then could pour its resources into a massive public housing development program to house Singaporeans. After industrial development and public housing, Singapore is transformed into a competitive economy and a livable city was greening Singapore through Tree Planting Campaign. Prime Minister Lee envisioned greening and cleaning Singapore to distinct this city-state from other Third World cities and therefore attracted businesses and tourism.

Figure 23: The Process of Singapore's Early Development: Job Creation, Housing Development and Environmental Enhancement

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Key for Success: Market positioning for cities The largest city in AP, Visakhapatnam invested about USD 52 per capita into infrastructure development, much higher than the national average of USD 1711 but still far below the required funding of USD100 – USD134 as estimated by McKinsey9 and Dr. Chetan Vaidya (2011). It has become a common policy direction around the globe that cities must find ways to tap on private capital to finance their growing demand for infrastructure and development. This direction lead to the importance of market positioning for each city to offer strategic reasons, beyond land accessibility and fiscal incentives, for private Figure 24: Major sources of investment for City Development require Engagement Of Private Capital. investors to put their capital into the city.

Figure 25: Beyond Legal Protection and Institutional Enablers which are provided by Central and State Government, Market Positioning is the key for cities to distinct themselves from competitors.

11

McKinsey Global Institute (2010). India’s urban awakening: Building inclusive cities, sustaining economic growth.

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6.2.1. Productive City

Figure 26: Urbanization rate and GDP per capita (INR crore) of each district in 2011. Data source: Census 2011

Figure 27: A pathway to Productive and Inclusive City begins with Economic Positioning for Cities.

Industrialization and urbanization are usually parallel processes. Industrial activities offers relatively higher productivity and income for workers compared agricultural production. As a result, rural migrants move to cities for jobs with better pay. This phenomenon is evidently demonstrated from the correlation between urbanization rate and GDP per capita of all districts in AP. Visakhapatnam, home of AP’s largest cities, has a highest rate of urbanization, 47.5%, and also enjoys highest income per capita. In contrast, Srikakula has only 16.2% of its population living in cities and the lowest income, equal to only 40% of Visakhapatnam. However, not all districts with high urbanization rate enjoy high income. Chittoor, the Southern-most district of AP and located in proximity to economic powerhouses Bangalore and Chennai, has the second highest rate of urbanization but its per capita income ranks third from the bottom. This raise a critical question for Chittoor’s in particular and all AP’s cities in general, on what are the directions of urban development to maximize their economic potential and address their social and environmental challenges. In order to attain the objective of raising the growth rate of AP to double digit, cities with their concentration of human resource, business and enabling institutions and infrastructure should lead the effort. The creation of economic clusters with clear positioning will help attract investment to ensure robust economic activity. The formation of economic clusters will ignite job creation through an increased industrial activity and an ecosystem of supporting businesses. The promotion of thrust sectors like textiles, food processing, chemicals and petrochemicals, auto and auto-components will result in a marked increase in factory employment, with textiles and food processing, in specific, as key promoters of light and low skill manufacturing. Productivity enhancement through value-chain strengthening will result in high employment multipliers through creation of indirect and induced jobs in ancillaries and related industries. In addition to major industrial developments, robust and registered MSMEs will serve as an important source of organized employment, particularly, to enable participation in economic activities for women and disadvantage groups. The development of traditional industries will also help to strengthen job opportunities for both urban poor and rural migrants. Since majority of employment opportunities in the manufacturing sector demand skilled workers, skill training for the future labor force is essential for them to enter the job market. This will be the first critical step for

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development. When the majority of the urban dwellers particularly the urban poor are gainfully employed, the city will be transformed into a productive and an inclusive city. The government will leverage on the industrial sector development as a catalyst where job creation by industrial expansion will clearly be the way forward along with social security policies to solve poverty problems. This will result in poverty reduction through the expansion of value-added and employment in higher productivity non-primary sectors at the cost of the lower productivity primary sector. The large scale migration of labour out of primary activity should raise labour incomes and result in inclusive and poverty reducing growth. This followed by restructuring within the industrial sector which will be discussed in Industry Sector Paper.

6.2.2. Inclusive City With 38.2%12 of urban population housed in slum areas but only 5.8%13 of them living below poverty line compared to 13.7% nationwise 9, the major social equity challenge for Andra Pradesh cities lie in their housing affordability. In fact, that high slum population will lower Andra Pradesh’s Multidimensional Poverty Index which measures people’s ability to maintain their living standards. Previous research on Indian slum problem have identified four major factors14: 

Limited transport options that force employees to choose substandard housing in exchange of job accessibility;

Lack of serviced land for residential development due low floor space index allowance;

Limited access to housing finance reducing low and middle-income households to enter formal real estate market;

and lack of rental options due to regulation constraint;

Figure 28: Three steps to Housing Affordability and Slum Upgrading

Under the 74th Constitution Amendment Act, urban poverty alleviation has been entrusted to ULBs as per the XII Schedule. In particular, Go’s Rajiv Awas Yojana (RAY) program has set the mandate to give ‘property rights’ to slum dwellers and to enact legislations to earmark 10-15% of and or 20-25% dwelling units for affordable housing projects as well as to set specific timelines for legislative modification of the Rent Control Act. Rajiv Awas Yojana is providing up to 50% and 75% of financial need for slum alleviation projects in cities with over-5-lakhs population and less-than-5-lakhs respectively. AP through the setting up Mission for the Elimination of Poverty in Municipal Areas (MEPMA) has adopted innovative approach which focuses on building community structures and integration of skills and livelihoods as central components of the slum alleviation programs15. This approach responses to the fact that majority of bread earners for slum households are casual workers and self-employed whose income varies from 2,000 to 4,000 INR per month as indicated by a survey in Vijayawada 16. Building on Rajiv Awas Yolanda’s guidelines and the

12

Indian Census 2011 Socio-Economic Survey 2014-2015 14 World Bank (2012). Indian Urbanization Review 2012 15 Vijayawada Municipal Corporation (2013). Slum Free City Plan of Action for Vijayawada Municipal Corporation. 16 Vijayawada Municipal Corporation (2013). Slum Free City Plan of Action for Vijayawada Municipal Corporation. 13

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foundation of MEPMA initiatives, the government will alleviate slums conditions in AP by focusing on five major directions: 

Provision of skill training and livelihood to slum dwellers to ensure income stability;

Integration of tenable slum areas into the entire city through master planning and provision of basic infrastructure and services to increase their land value;

Recognition of land ownership for slum dwellers at non-hazardous, tenable locations to allow monetization of land for improvement and redevelopment;

Resettlement of slum dwellers from hazardous, untenable locations;

Removal of restrictions on rental market and revision of regulations to allow higher development density to increase housing supply.

These policy directions aim to create a legal and infrastructure framework for self-transformation of slum areas through market mechanisms. As the land value of slum areas are recognized, individuals and communities can monetize to gain capital for housing and infrastructure upgrading. At the same time, to meet the high demand for affordable housing and service provision, the government aims to implement PPP model through a variety of different formats. Consideration for PPP model will include both engaging private sector to finance and build infrastructure (i.e. Build-Transfer, Build-Operate-Transfer and Build-Own-Operate models) and allowing private enterprise to participate in service delivery to residents. At national level, Steering Committee on Urban Development & Management estimates that 13-23% of total investment in urban infrastructure during the 12 th Plan period can be funded through PPPs17.

6.2.3. Sustainable City Given the substantial urban population growth envisaged for the state, there is also an expected shrinking of urban green and open space and proportional increase in resource consumption, waste water/solid waste generation, encroachment of development into fertile lands and ecologically sensitive areas and cities’ exposure to natural disaster along the coast. The impacts of increasing urbanization can be illustrated below: 

Energy consumption in urban sector is expected to increase five times by 2029 due to the improvement of living standard.

Increased private transportation leading to congestion on roads and the increased emissions / air pollution

Increasing average temperature/extended summer every year leading to increase in HVAC load

The current treatment capacity for waste water is only 288 million liters per day, only over 20% of the amount generated. Waste water generation is expected to double by 2029.

Currently, only 7% of 7033 tons of solid waste generated is being treated. It is expected that the waste generation in 2029 will increase by four times of 2015 amount. In addition, there is only one Treatment, Storage and Disposal Facility (TSDF) for hazardous waste while the amount of hazardous waste will increase significantly overtime with the rapid growing of industrialization in AP.

Rapid urbanization in Godavari and Krishna River Deltas will threaten fertile agricultural lands.

Growth of urban population in low delta and coastal region would lead to increased vulnerability to flooding, storm surge and cyclone.

17

Steering Committee on Urban Development & Management (2011). Report of the Working Group on Financing Urban Infrastructure

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To tackle these challenges, there are six critical sustainable solutions which can be grouped into 3 groups: clean and green living environment, low impact in natural environment and low disaster risk (Figure 29). Urban Development Sustainability

Clean & Green Living Environment

Greening living area

Low Impact on Natural Environment

Collection of sewerage and solid waste

Treatment of sewerage and solid waste

Protection of fertile lands and ecological sensitive areas

Low Disaster Risk

Avoid urban development in high-risk areas

Disaster Management Plan for vulnerable cities

Figure 29: Key measurements to achieve sustainability in urban development in AP.

Figure 30: A Framework for City Sustainability in AP

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The government will address the issues of sustainability at all levels of the Government (Figure 30) as it is a responsibility that will need action from all, policy makers, city managers, and the citizens. At the State level, the government will set development policies that are sensitive to the natural environment. At the municipality level, managing growth through good planning practice and promoting best practice in resource management will be emphasized. At the community level, forming community-based actions for healthier living environment and raising awareness through public education will be highlighted.

6.2.4. Smart City In June 2015 the Ministry of Urban Development (MoUD) of Government of India (GoI) released the Smart Cities Mission Statement and Guidelines18. The document establishes the framework and guidelines to develop Smart City in India. As the concept of Smart City varies depending on the level of development, willingness to change and reform, resources and aspirations of the city residents, hence there is no universally accepted definition of Smart City. Pertaining to this Smart City Mission, GoI defines Smart City as developing the entire urban eco-system represented by the four pillars of comprehensive development – institutional, physical, social and economic infrastructure – adding on layers of ‘smartness’. The objective is to promote cities that provide core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment and application of ‘Smart’ Solutions, focusing on sustainable and inclusive development on area-based developments. This drives economic growth and improves the quality of the people by enabling local area development and harnessing technology, especially those that leads to Smart outcomes.

Figure 31: Illustrative list of Smart Solutions (taken from Smart City Mission & Guidelines, MoUD, GoI, June 2015)

MoUD has identified the core infrastructure elements in a Smart City as follows: ►

Adequate water supply

Assured electricity supply

Ministry of Urban Development, Government of India, “Smart Cities, Mission Statement and Guidelines”, June 2015

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Sanitation, including solid waste management

Efficient urban mobility and public transport

Affordable housing, especially for the poor

Robust IT connectivity and digitalization

Good governance, especially e-Governance and citizen participation

Sustainable environment

Safety and security of citizens, particularly women, children and the elderly

Health and education

In addition to core infrastructure elements, the supplementary layer of Smart Solutions was established as shown in the illustrative list below. Developed as an Area-based Smart City Development, 3 + 1 strategic models were established, namely Retrofitting (city improvement), Redevelopment (city renewal), and Greenfield Development (city extension) plus a Pan-city initiative where Smart Solutions are applied covering larger parts of the city. These strategic models are not prescribing any particular model to be adopted by Smart Cities. Each city has to formulate its own concept, vision, mission and plan (proposal) for a Smart City that is appropriate to its local context, resources and levels of ambition. A Smart City Proposal will have to be prepared by each city to be submitted to the Government where a vigorous selection mechanism will be conducted.

Figure 32: A Comprehensive Framework for AP Smart City

GoI has allocated 3 (three) cities in in the state of AP to be developed as Smart Cities, based on urban population and number of statutory towns. These cities are Visakhapatnam, Tirupathi, and Kakinada. The Chief Minister of

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AP however, has identified 14 cities to be developed as Smart Cities. Hence, these 3 cities will be the first phase of Smart City development in the state of AP. The framework for the smart cities of AP sees an opportunity to create cities that become benchmarks for the future urban areas. In order to provide effective citizen service delivery, citizen engagement, integrated service delivery, and to support the informed decision making so that the government is perceived as responsive, the government have created a comprehensive framework. A framework that addresses five key dimensions of urban development: Governance, Planning, Environment, Community and Living. This comprehensive framework will help create a platform that is powered by the cutting-edge ICT technologies of today and the future for an integrated process of urban management.

6.2.5. Well-Governed City To transform each urban area of AP into a productive, inclusive, sustainable and smart city, it is required that the city has a strong municipal government. GoAP commits to policy reforms that will give the ULBs more authority and independence to ensure the success of the future cities of AP. The areas of policy changes recommendations are political legitimacy, financial independence, institutional structure flexibility and community engagement. Political legitimacy: The first step to build strong municipal governments is to endorse their political legitimacy and hold them accountable. The 74th Constitutional Amendment Act of 1992 (CAA) recognizes this fundamental and therefore constitutionalize the role of ULBs (ULBs) as the third tier of government. Under CAA, an election to Urban Local bodies every five years is mandatory. Besides the constitutional recognition of ULBs, CAA also enlists 18 municipal functions which state governments are supposed to transfer to ULBs. In AP context, ULBs were already entrusted with 13 functions out of 18 functions listed in the Constitution. Recently, four more functions including planning for development, urban forestry, and welfare of weaker sections and promotion of cultural and educational aspects are transferred to ULBs. This offers to ULBs a full control of land-related management which is critical for the successful development of city governments.

Figure 33: Four pillar to form strong and well-managed ULBs

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Financial Independence: Transfer of functions is not sufficient to make city governments functional. The challenge is that functional devolution to ULBs hasn’t been supported by adequate transfer of revenue sources. Further, the financial autonomy of ULBs has been undermined as they have to seek state government approval for enhancement in tax rates and user charges beyond the limits mentioned in municipal laws. Furthermore, ULBs have limited powers to institute new taxes. ULBs need to have separate revenue sources from the state government and national counterpart as well as a formula-based transfer from higher levels of government that allow them to be independent in operational budget. With an independent operational budget, a ULB can maintain a consistency in service delivery. ULBs are also authorized to levy taxes and fees and received tax shares from the state government. GoAP will support ULBs to set-up/upgrade their property and other land-value based tax systems which reflect the performance of those cities from economic and infrastructure development. In addition, ULBs in AP have fulfilled all 9 conditionalities to get eligibility for the performance grants and are going to receive grants less than 10 days after the state’s receipt from GoI. Statistics (Figure 34 and Figure 35) of ULB revenue from 2007-2008 to 2012-2013 financial year reveal that municipal revenue is increasingly depending on its own sources as well as state funding. Internal sources such as property tax, other taxes and non-tax charges account for only 28% of municipal revenue in 2007-2008 financial years. This figure is increased to 44% in 2012-2013financial year. Property is the major internal source of revenue for ULBs and increasing substantial in term of both absolute value and contribution percentage overtime. In contrast, other tax and non-tax revenue remain unchanged in percentage contribution. As AP is moving toward developing a more business-friendly environment, municipal government will increase the contribution of non-tax revenue, i.e. user-charge schemes, and decrease their dependence on taxes. On the other hand, since property tax contributes significant amount revenue to ULBs’ budgets, it is critical to have an up-todate information system on properties and developments for tax collection purpose.

Figure 34: Revenue realized by ULBs in AP. Source: Memorandum submitted to the Fourteenth Finance Commission by GoAP

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Figure 35: Revenue structure of ULBs in AP. Source: Memorandum submitted to the Fourteenth Finance Commission by GoAP

Institutional Structure Flexibility: Institutional structure of each ULB must reflect its priority in service delivery. For example, Tirupathi Municipal Corporation, AP tourist destination, are to have a section in charge of tourism promotion while Visakhapatnam Municipal Corporation will dedicate one department to help reducing the city’s large slum population. In addition, service delivery functions will be transferred from parastatals to ULBs to form in-charge municipal departments. GoAP will allow and support ULB and their subordinate agencies’ managerial and operational autonomy in institutional structure and human resource management as these are prerequisites to build service-oriented and efficient municipal governments. Community Engagement: Having emerged as the third tier of government in India, ULBs now must own “the political accountability” for the roles assigned to them under the 74th Amendment and JNNURM. This means that municipal governments must ensure a democratic platform to engage stakeholders, i.e. communities, citizens, organizations and businesses, during decision making process. Stakeholder engagement will help to make ULB governments stronger, more transparent and efficient as consensus and ownership being built across all stakeholders.

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7. AP Urban Structure

7. AP Urban Structure

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There are many key drivers to urbanization like provision of higher-income and stable jobs, access to affordable housing and basic amenities, etc. All of these key drivers are a result of government policies, the location of the urban agglomeration as much as they are of economic positioning, historical/cultural context, etc. Urban areas in AP are not growing evenly and at the same pace or size. In addition, given the vision for double digit growth in the next 15 years with limited public resources and a rural-background society, government investment into urban development will be strategic, focused and with high priority to economic hubs to create high impact on the economy and job creation. In order to address efficacy of the strategies or policy changes or programs proposed, it is important to identify the classification of cities based on size and spatial context. A detail discussion on the impact of AP’s aggressive economic development on urban structure, projection of urban population growth and change in urban structure and recommended spatial strategies will be discussed in this chapter.

7.1. Economic and Industry development initiatives in AP Table 4: Industrial nodes along VCIC. Source: Department of Industries & Commerce (2015)

Industrial Node

Cluster

Focus Sectors

Visakhapatnam (Visakhapatnam)

Pydibheemavaram Atchuthapuram Nakkapalle Bheemunipatnam

Pharmaceuticals, metallurgy, non-metallic minerals, chemical, petrochemicals and food processing

Kakinada

Food processing, chemical and petrochemical, paper and non-metallic minerals

Gangavaram Kankipadu

Pharmaceuticals, metallurgy, food processing and nonmetallic minerals

Srikalahasti-Yerpedu Sri City

Electrical equipment, textiles, food processing, metallurgy and non-metallic minerals

Kakinada (East Godavari) Gannavaram-Kankipadu (Krishna) Yerpedu-Srikalahasti (Chittoor & Nellore)

Under both Government of India (GoI) ’s ‘Make in India’ initiative and GoAP’s industrial development policy, Visakhapatnam-Chennai Industrial Corridor (VCIC) and Chennai-Bengaluru Industrial Corridor (CBIC) are cornerstones to develop manufacturing infrastructure. VCIC, being developed with support from Asian Development Bank (ADB), is expected to receive an investment of over 1 lakh crore in 10 to 15 years, provide at least 50,000 jobs and help to increase GDP of districts along the corridor by 6 folds 19. VCIC will help to strengthen to the following proposed industrial hubs along the coast: Visakhapatnam, Kakinada, and Gangavaram-Kankipadu in the North and Yerpedu-Srikalahasti in the South16. Among these four, Visakhapatnam and Yerpedu-Srikalahasti are prioritized nodes in the first phase of the corridor development. The government and private investment into the corridor will result in a significant improvement of infrastructure and exponential growth in industrial production which lead to rapid urbanization in Northern region (i.e. Visakhapatnam and East Godavari districts) and Southern region (Chittoor and Nellore districts) of AP.

19

Department of Industries & Commerce (2015). Industry Mission Document.

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Figure 36: cities selected for industrial development along VCIC and CBIC and industrial clusters of each AP's district. Source: Industry Sector Paper (2015) and AP Industrial Infrastructure Corporation.

CBIC is a mega infrastructure project by GoI crossing three Southern states (Tamilnadu, AP and Karnataka) to boost commerce between South India and East Asia by upgrading transportation links between Chennai and Ennore ports and their hinterlands. A study is underway to prepare a master plan for the corridor which will consist of 8 potential industrial nodes identified20. Three of them will be in AP: Krishnapatnam of Nellore, Kalikiri of Chittoor and Hindupur of Ananthapur. Together with two Chittoor nodes of VCIC (i.e. SrikalahastiYerpedu and Sri City) and Chittoor National Investment and Manufacturing Zones, the development of CBIC will significantly strengthen industrial growth in South AP, particularly Chittoor District. Besides industrial corridors, GoI has other industrial initiatives in AP including AP Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) which clustering petrochemical sector in Visakhapatnam, Nakkapalli and Kakinada and National Investment Manufacturing Zone (NIMZ) which setting two large industrial zones with a minimum of 5,000 hectares in Chittor and Prakasam 21. In total, GoI-initiated corridors and investment zones provide a land bank of 118, 297 acres for industrial development in AP 22. GoAP also put up progressive policies and incentives to attract investment and promote industry development. GoAP has come up with a list of 10 focused industrial sectors.

20

AP Industrial Infrastructure Corporation’s website AP Industrial Infrastructure Corporation’s website 22 AP Industrial Infrastructure Corporation 21

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Figure 37: 10 focused industrial sectors identified by GoAP. Source: Department of Industry & Commerce (2015)

23

The list includes labour-intensive industries such as food processing and garment to create jobs for the mass and resource-based, capital-intensive industries such as petrochemicals and energy for import substitution and to support the growth of the overall economy23. The state government also promotes technical-intensive manufacturing such as electronics and aviation20. While labourintensive and technical-intensive industries will favor large urban agglomerations, i.e. Visakhapatnam, Krishna River Delta and Chittoor, resource-based and capital-intensive industries will offer growth opportunities to smaller cities and towns along the coast and in resource-rich regions. Therefore, these directions of industrial development bring opportunities of growth for every urban region.

Department of Industries & Commerce (2015). Industry Mission Document.

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Case study: South Korea South Korea’s first 15 years after Korea War is a good case study for AP since this East Asian country was beginning its economic development effort with similar challenges AP is facing today and able to overcome them. South Korea in 1960: •

Poorer than Sub-Sahara African countries

Small manufacturing sector contributed less than 10% of GDP

Modest urbanization rate at 28% with only 2 million-plus cities (Seoul: 2.4 million; Pusan: 1.2 million)

Achieved an average GDP growth rate of 9.3% in 15 years from 1961 to 1976

which

In South Korea’s economic development strategy, Figure 38: Scale comparison between AP and South Korean. urban development played an pro-active role in supporting industrial development policies: •

Since the growth engine was Export-oriented Industries to provide jobs to a large population  Central government aimed to control over urban development with clear focus in some particular regions to achieve efficient provision of land, labor and capital given limited resources, infrastructure and rural background.

In return, city and infrastructure building also contributed significantly to GDP growth

South Korean’s economic development policy has evolved through four stages and have implications on urban development: •

1961 – 1972: Export-oriented/Labor-intensive industries  Urban agglomeration happened in Seoul and Pusan regions to utilize available port/infrastructure, labor pool and business services

Figure 39: Interrelationship between industrial development policies and urban development policies in South Korean’s economic development strategy and GDP growth rate and Urbanization rate of South Korea from 1961 to 1976. Source: Yu Min Joo (2011) and World Bank (2014)

1972 – 1980: Capital-intensive heavy industries (steel, ship-yard and petrochemical)  Balanced growth with emerging of coastal specialized industrial towns

1980 – 1990: Emerging needs to serve left behind rural areas  Cities as regional service hubs

Post 1990: Focusing on financial services and high-tech industries  Developing Seoul and Pusan into Global cities.

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7.2. Urban Structure of AP 7.2.1. Urban Population Projections

Figure 40: Urban Population Growth and Urbanization Rate 2015 – 2029

Urban population projections for three scenarios namely the short- (2019), medium- (2022) and long-term (2029), are determined based on population data from census 2001 and 2011. District-wise urban population are projected by using a cohort-component model with 5 years age groups interval per cohort while taking into account components such as mortality, death, fertility and net migration rates. Some key assumptions are made in the urban population projections. Under 5 Mortality Rates are reduced by 0.104704 for the periods 2011-2015 and 2016-2020, and 0.084746 for the periods 2021-2026 and 2026-2030. Death rates are reduced by 0.021802 and 0.016598 for 2016-2021 and 2021-2031 respectively. Fertility rates are also considered to reduce by 0.043478 for 2016-2021 and by 0.090909 for 2021-2031. Migration rates of 0.03%, 0.25%, 1% from 2015-2031 is accounted as well to capture possible fluctuations of inter and intra state migrations. Due to incomplete listings of cities and towns within the sub-district level for each of the 13 districts, population projections were performed at best on available urban agglomerations data and information. The projected district-wise urban population are then disaggregated into cities proportionately based on historical and average growth rates to determine the respective cities’ size and urban population. These cities are subsequently classified into different city size class depending on their urban population for 2019, 2022 and 2029 accordingly as shown in the following tables. Table 5: Classification of cities used in this report is based on HPEC’s Report on Indian Urban Infrastructure and Services (2011)

Class Population

Class IA > 5 million

Class IB 1 - 5 million

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Class IC 100,000 - 1 million

Class II 50,000 100,000

Class III 20,000 50,000

Class IV+ < 20,000

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Figure 41: 2011 urban system of AP based on GoI's classification.

Table 6: Number of Size Class of Cities in AP. Data Source: Census of India 2001 and 2011

Summary Total Number of Size Class Cities for All Districts in AP City Size Class

2011

2019

2022

2029

Class IA

-

-

-

-

Class IB

2

2

2

6

Class IC

30

37

44

44

Class II

40

53

50

51

Class III

76

56

52

45

-

-

2

148

148

148

Class IV+* Total

148

*excluding for others unincorporated urbanized areas in total number of size class cities in class IV+

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Figure 42: 2019 urban system of AP based on GoI's classification.

Table 7: Population per Size Class of Cities in AP. Data Source: Census of India 2001 and 2011

Summary Total Urban Population per Size Class for All Districts in AP City Size Class

2011

2019

2022

2029

Class IA

-

-

-

-

Class IB

3,057,728

4,055,461

4,456,382

8,996,598

Class IC

6,734,656

10,418,974

12,232,519

11,077,242

Class II

2,581,508

3,833,296

3,527,382

3,633,230

Class III

2,524,343

1,925,722

1,807,548

1,658,211

Class IV+*

-

-

-

38,413

Total

14,898,235

20,233,453

22,023,831

25,403,693

*excluding for others unincorporated urbanized areas in total number of size class cities in class IV+

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Figure 43: 2029 urban system of AP based on GoI's classification

Table 8: Population per Size Class of Cities in AP. Data Source: Census of India 2001 and 2011

Summary Total Urban Population per Size Class for All Districts in AP City Size Class

2011

2019

2022

2029

Class IA

-

-

-

-

Class IB

3,057,728

4,055,461

4,456,382

8,996,598

Class IC

6,734,656

10,418,974

12,232,519

11,077,242

Class II

2,581,508

3,833,296

3,527,382

3,633,230

Class III

2,524,343

1,925,722

1,807,548

1,658,211

Class IV+*

1,287,074

2,128,268

2,636,494

4,627,659

Total

16,185,309

22,361,721

24,660,326

29,992,939

*Including others unincorporated urbanized areas in total urban population per size class in class IV+

7.2.2. Changing urban structure of AP Current Urban Context AP’s urban local bodies (ULBs) can be classified into three main categories based on their governance status. Contingent on its population size, AP’s urban structure comprises following governance statuses: Municipal Corporations, Municipalities, and Town Councils (Table 9). Based on the 2011 census, 148 ULBs have been identified to meet the minimum threshold population size definition of 20,000. Amongst these 148 ULBs, a clear pattern of the distribution of AP’s urban population among these three categories can be observed. Ernst & Young LLP | CPG Consultants

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Municipalities comprise more than half the total number of ULBs (54.1%), while Town Councils (37.2%) and Municipal Corporations (8.8%) make up the remainder (Table 10 and Figure44). It is also noted that in 2011, a new capital city, Amaravati, was formalized as a Municipality with a population size of 265,065. It is one of the three mega-cities identified by the GoAP, leading urbanization in AP with key urban development plans put in place alongside government funding and incentives. These three mega-cities will be discussed shortly on the sub-chapter on Key Growth Points.

Table 9: ULB classification based on population size.

ULB Classification Municipal Corporation

P ≥ 300,000

Municipality

40,000 < P <300,000

Town Council

20,000 ≤ P ≤ 40,000

AP’s Changing Urban Structure Table 10: Percentage breakdown of AP urban structure for 2011, 2019, 2022, and 2029.

Government status

2011

2019

2022

2029

Municipal Corporation

8.8%

9.5%

10.1%

11.5%

Municipality

54.1%

62.2%

64.9%

68.9%

Town Council

37.2%

28.4%

25.0%

19.6%

Total

100.0%

100.0%

100.0%

100.0%

Based on 2011 census data, urban population projections for the 110 ULBs and 38 unincorporated urban areas (with population over 20,000) in AP have been carried out for 2019, 2022, and 2029. It is evident that AP’s urban structure changes over these three years, with the number of larger urban areas (Municipalities and Municipal Corporations) increasing over time to exhibit an upward growth trend (Table 10 and Figure 44). Conversely, the smaller urban areas (Town Councils) decrease in number over time to give a downward growth trend. This can possibly be accounted for when considering the greater agglomeration effects offered by bigger urban areas – offering more economic opportunities and betterdeveloped urban infrastructure systems.

Changing Urban Structure in Andhra Pradesh 110 100 90

No. of ULBs

80 70 60

Municipal Corporation

50

Municipality

40

Town Council

30 20 10 0

2011

2019

2022

2029

Figure 44: Numerical breakdown of AP urban structure for 2011, 2019, 2022, and 2029.

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Key Growth Points Urban growth points are of key concern to the State and planning authorities. Urban growth points can be identified two criteria – (i) population size, or (ii) growth rate. In 2011, the largest three Municipal Corporations are Visakhapatnam (population size of 2,035,900), Vijayawada (1,021,800) and Guntur (670,073). There are in total 13 Municipal Corporations, 80 Municipalities and 55 Town Councils (Figures 45 and 46).

Figure 45: Municipal Corporations, Municipalities, and Town Councils in AP in 2011.

10 Largest ULBs by Population Size (2011) VISAKHAPATNAM (VUDA)

2,035,922

VIJAYAWADA (CRDA)

1,021,806

GUNTUR (CRDA)

670,073

NELLORE (APMDP)

547,621

KURNOOL

460,330

RAJAHMUNDRY

341,831

TIRUPATHI (TUDA)

331,389

KADAPA (APMDP)

318,916

KAKINADA

312,538

ANANTAPUR (APMDP)

261,004

Figure 46: Ten most populous cities in AP in 2011. Data source: India Census 2011

In 2029, the number of Municipal Corporations and Municipalities increases across AP, though noting that Municipalities still remain as the majority ULB type across the years (Figure 47). There are 17 Municipal Corporations, 102 Municipalities and 29 Town Councils. There is also a change in the largest three Municipal Corporations from 2011. Visakhapatnam remains the largest Municipal Corporation with a population size of 3,156,597, and the new capital city of Amaravati follows after with population size of 1,545,355 (Figure 48). Together with Tirupathi, these are the three ULBs that have been designated by the GoAP to be the three megacities in AP. It should be noted that the city of Tirupathi is in close proximity with a number of ULBs to form a key growth region with a combined urban population of 1,416,426 in 2029 (Table 11).

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Figure 47: Municipal Corporations, Municipalities, and Town Councils in AP in 2029.

10 Largest ULBs by Population Size (2029) VISAKHAPATNAM (VUDA) AMARAVATI (New Capital City) VIJAYAWADA (CRDA) NELLORE (APMDP) KURNOOL GUNTUR (CRDA) KADAPA (APMDP) TIRUPATHI (TUDA) RAJAHMUNDRY KAKINADA

3,156,597 1,545,355 1,171,266 1,057,482 1,048,835 1,017,063 966,594 811,253 613,270 533,453

Figure 48: Major cities’ population in 2029. Table 11: Population of GoAP’s ‘Mega-Cities’ in 2011 and 2029

Absolute Growth (20112029) +1,280,290

An alternative means of identifying urban growth points is based on ULB urban growth rate. This measures the absolute percentage 1,545,355 AMARAVATI urban growth rate from 2011 to 2029. The total +1,120,675 VISAKHAPATNAM 3,156,597 change in urban population growth rate of AP’s TIRUPATHI ULBs from 2011 to 2029 varies widely – 811,253 +479,864 City ranging from ULBs demonstrating negative 1,416,426 +832,837 Region* population growth to high, accelerated growth * Includes the following ULBs: Puttur, Srikalahasti, Akkarampalle, (Figure 49). Some ULBs with small population Avilala, Renigunta and Tiruchanu. sizes in fact exhibit fast accelerated population growth, such as the Municipality Avilala, having a population of 53,417 but growing at a quick cumulative absolute population growth rate of 115.05% from 2011 to 2029. ULB

Population Size (2029)

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Figure 49: Annual growth rates of ULBs in AP from 2011 to 2029.

600.00% 500.00%

483.01%

400.00% 300.00% 203.09% 200.00%

177.88%

177.88%

177.88%

177.88%

177.88%

152.92%

100.00% 0.00%

Figure 50: 10 fastest growing ULBs in AP from 2011-2029, based on cumulative growth rates.

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8. Spatial Strategies

8. Spatial Strategies

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8.1. Growth-Pole Strategy A clear urban structure emerged in AP with three agglomerations: Visakhapatnam in the North, Khrisna River Delta (i.e. Guntur and Khrisna Districts) in the central and Chittoor in the South. Together, these three regions house 67 lakh people or 46% of all urban population in 2011. With the state’s efforts in forming industrial clusters in every district to create a balance in regional development, it is projected that the concentration of urban population in those three regions will slightly decline. In 2029, Visakhapatnam, Khrisna River Delta and Chittoor will be the home of 99 lakh people or 42% of AP’s urban population at that point of time. Among three regions, only Chittoor, due to the concentration of national industrial initiatives and its strategic location between Chennai and Bangalore, increases its share of the state urban population. AP Urban Growth-Pole Strategy – the first and foundational strategy to transform AP urban system into an economically efficient and vital one – aims to focus urban investment into the state’s three largest urban regions: Visakhapatnam, Khrisna River Delta and Chittoor regions.

Figure 51: Urban population distribution in 2011. Data source: Census Indian

Figure 52: Projected urban population distribution in 2029.

The growth of Visakhapatnam, Krishna River Delta and Chittoor regions are critical to the economic success of Andhra Pradesh, particularly in the early stage of 2015-2029 development period, justified by below context considerations: •

24

Geographic Context: As Andhra Pradesh positioned itself as India’s gateway to Asia-Pacific24, the state economy will be shaped by international trade which is facilited through transportation and logistics hubs. This development context offers Visakhapatnam, Krishna River Delta and Chittoor regions comparative advantages as the state gateways to the world market. Visakhapatnam has the state’s only international airport and the fifth busiest port in India in term of cargo tonnage. Krishna River Delta has a domestic airport with potential for upgrading into an international hub East of India. Krishna River Delta will be also an important logistics hub due to its location at the crossroad of National Highway 65 connecting with Hyderabad and Mumbai and National Highway 16 running along the east coast of India. Chittor region also has one of four operating airports in AP and is located within proximity to major international airports in Chennai and Bengaluru as well as Chennai port, the most busiest port along the east coast of India. In addition to their access to transportation hubs, the

Department of Industries & Commerce (2015). Industry Mission Document

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dispersion of three regions in North, central and South of AP will allow to support more balanced development of the State, particularly in the South and South-West. Economic Context: National industrial initiatives such as VCIC, BCIC and Chittoor NIMZ with identified industrial clusters concentrated in Visakhapatnam, Krishna River Delta and Chittoor districts will give economic boost as well as require infrastructure investment in these three regions. The state of AP will leverage on these opportunities with funding from GoI and international institutions (i.e. ADB and JICA) to kick off its aggressive economic programs in general and industrial development in particular. This effort will require GoAP’s focus in the three regions in term of financing, planning and capacity building. Fiscal Context: State Finances have been under stress for well over a decade on account of various factors such as increase in the establishment costs (salaries and pensions), rising interest payments, welfare commitments, power sector expenditure. Fiscal stress is the result of expenditure commitment rising faster than revenue receipts, less than anticipated returns from major projects in irrigation, power etc., and the increasing debt burden on the Government. On the other hand, the state aims for doubledigit growth which requires up to 43% investment of GSDP while the saving rate in the past was about 30%25. With a constraint in government budget while there is a high demand on government funding to support rapid economic growth in the next 15 years, GoAP will focus its investment for urban sector in the Visakhapatnam, Krishna River Delta and Chittoor regions. This focus of urban investment will accelerate agglomeration in these regions and ultimately increase productivity as well as efficiency of AP economy.

Figure 53: Unemployment rates of AP, India and the topperformance states. Source: Socio Economic Survey of Andhra Pradesh 2014-15

• Social Context: AP cities are facing high levels of unemployment: an average of 43 unemployed people per 1000 working population26. Apart from the low quantum of employment, the quality of employment also remains a concern in the State. Around 94% of the workers in the state are in the unorganized sector and in fact, the State reports the highest employment in the unorganized/informal economy. High unemployment and informality undermine both current consumption and potential output and productivity growth in the long-term. To enhance the employment rate and percentage of job in formal sectors, AP cities will first attract export-oriented labour-intensive industries such as garment, food processing and electronics which require access to both labour pools and seaports. No other region but Visakhapatnam, Krishna River Delta and Chittoor districts can offer these prerequisite conditions.

The focus of urban investment into three regions is well aligned with GoAP’s early vision to develop three mega-cities: Visakhapatnam, State capital city Amaravati and Tirupathi. These three mega-cities will form the engine for growth in each region. As these cities grow, they will wield enormous influence in the regions

25 26

Economic Sector Paper Socio Economic Survey of Andhra Pradesh 2014-15

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they belong to and in some cases it may even go beyond the boundaries of the state as well. The growth of these three mega-cities and their regions will help to expedite industrialization process and bring enormous benefit for Andhra Pradesh as a whole.

Figure 54: Rationale for Growth-pole Strategy

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8.2. Industrial Node Strategy Industrial Node Strategy aims at investing into small and medium-sized cities with capital-intensive and heavy industries which require direct access to natural resources and major transportation infrastructure such as railway, highway and seaport for goods movement. The growth of medium-sized industrial towns is critical to the economic success of Andhra Pradesh, particularly in the late stage of 2015-2029 development period, justified by below context considerations:

Figure 55: Rationale for Industrial Node Strategy

Geographic Context: AP is endowed with natural resources such as limestone in the West and oil and gas along the central coastal area which are critical construction material and energy inputs for the economy. In addition, the state has a long coastal line with many natural deep-sea formations for port development. Only few of them can become large container port due to their good access to productive hinterlands such as Visakhapatnam and Krishnapatnam ports, the rest should be transformed into specialized ports to serve heavy and resource-based industries. Economic Context: To support the growing export-oriented manufacturing and achieve trade surplus, AP will need to grow its resource-based and heaving industries to complete production value chains and substitute import products. Financial Context: Heavy industries are usually capital-intensive. Visakhapatnam-Kakinada PCPIR, for example, will need an investment of INR 3.43 lakh crore in total. A petrochemical complex projected to be developed near Atchutapuram or Nakkapalli will require an investment of INR 40,000 crore. Given this capital intensity, heavy industries usually emerge only in the later stage of development when the market demand is already established and significant to absorb that large

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investment and the government budget is sizable to fund fully or partially supporting infrastructure for those projects. Social Context: After the implementation of Urban Growth-pole Strategy which channel government’s investment into three largest urban agglomerations in AP, there will be a need to balance the level of development among different regions and districts. Industrial Node Strategy will provide a timely solution to spread out industrial development outside the three main regions.

Figure 56: Mineral resources in each AP district. Source: Industry sector paper (2015).

Andhra Pradesh is endowed with rich mineral wealth, making it a mineral powerhouse of the country. The extensive mineral resources place Andhra Pradesh at a strategic advantage for developing its mineral based industries like cement, steel and petro-chemical. Every district in AP is placed at a competitive advantage, being endowed with distinct mineral resource base. Therefore, based upon the district specific mineral endowment, minerals mapping has been done to understand the potential of local economies (districts) to be developed as mineral based industrial agglomerations. Cities with potentials for the development of resource-based industries are listed below:

Cement industry concentrates in Western districts such as Kadapa, Anantapur and particularly Kurnool districts with large limestone reserve available. Construction material clusters will be formed in three district headquarters Kurnool, Anatapur and Kadapa. Petro-chemical industry concentrates in coastal Krishna and East Godavari with abundant of oil and gas reserves. Petro-chemical clusters will be formed in coastal cities Machilipatnam (Krishna district) and Kakinada (East Godavari).

Besides resource-based industrial clusters, there are other clusters emerged in small and medium-sized AP cities due to their strategic locations and/or significant government investments: • • • • •

Automotive manufacturing clusters in Sri City and Nellore (Nellore district) Texttile clusters in Prakasam NIMZ (Prakasam district) Food processing clusters in Hindupur (Anantapur district) Aerospace and defense clusters in Nellore (Nellore district) Logistics cluster in Krishnapatnam (Nellore district)

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8.3. Smart Region Strategy It’s estimated that the average population size of 637 mandals in AP, excluding 32 urbanized mandals containing class IB and IC cities (cities with population above 100,000 people), is about 61, 642 people. Some mandals even has population size below 10,000 people. In addition, about 35% of all ULBs or 38 towns with population below 40,000 people. The small size of local government posts a challenge in the delivery of some services such as planning, operation of transport system and disaster management27. A larger population size will allow the local government to provide those services at lower unit or per capita costs or deliver better quality services at the same cost by capturing economies of scale. The Growth-Pole and Industrial Node Strategies are aimed to attract economic activity through the formation of economic and industrial clusters. These strategies will benefit only large urban regions and few selected industrial nodes. The rest of AP towns will be part of a Smart Region Strategy where they can amalgamate with surrounding villages to form a larger regional government to enhance the quality and efficiency of service delivery. Regional governance is not new to Andhra Pradesh. Under the implementation of 74th Constitution Amendment Act, District Planning Committee (DPC) and Metropolitan Planning Committee (MPC) was envisaged as an inter-institutional platform for regional planning coordination. In Andhra Pradesh, only DPC has been constituted and set up. Regional planning task at metropolitan level is assigned to Urban Development Authorities (UDA) such as Vijayawada–Guntur–Tenali– Mangalagiri UDA whose jurisdiction covering two municipal corporations and two municipalities. However, UDA format is limited to consolidating plans prepared by municipalities instead of setting a encompassing vision for a region and only applicable to larger cities.

Figure 57: Smart Region is formed by an agglomeration of a city and surrounding rural areas to create a larger administration unit for efficient service delivery

Figure 58: Potential social services and infrastructure development tasks which can be managed efficiently by a Smart Region

With Smart Region Strategy, the formation of regional government will create economies of scale for efficient service delivery at the local level in smaller urban regions, help strengthening the management capacity of the 27

Callanan, M. (2011). Review of international local government efficiency reforms. Dublin, IR: Institute of Public Administration.

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smaller ULBs and also enhance their role as service delivery hubs. Smart Region can be a transitional stage in the process of power, responsibility and financial devolution from state to ULBs. The government body of a Smart Region, Smart Region Development Authority (SRDA), is a substitute to mandal government or ULB. Instead, SRDA will focus only on infrastructure development and service delivery that require regional coordination such as disaster management, healthcare, higher education, water supply, power supply and planning (including both land-use and transportation planning).

Figure 59: AP urban system in 2029.

8.4. Vision 2020 SwarnAndhra 2029 vision for urban development is built upon Andhra Pradesh Vision 2020 which also emphasize on making AP cities economically productive, socially just and environmental sustainable. Vision 2020 also recognizes the importance of municipal governance which should be participatory, responsive and people-oriented and set the objective for balanced urban development through developing alternative urban centers as countermagnets. SwarnAndhra 2029 vision goes beyond recognizing the need for better urban governance and balanced urban development by making building capable, independent and responsible ULBs one of 5 vision theme and proposing three Spatial Strategies that provide specifically growth directions for all cities, big and small, in the state.

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Figure 60: Transformation directions set by AP Vision 2020. Source: GoAP

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9. Key Target & Gap Analysis

9. Key Target & Analysis

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9.1. Summary SwarnAndhra Vision 2029 aims to develop the state of AP as one of the best developed states in India. Development in urban sector is one of the essential elements to achieve the ‘developed state’ status. As such, a set of key targets/planned outcomes for urban development in the state of AP by 2029 needs to be established. Along with a set of indicators, these key targets and indicators will guide the growth of urban development, setting projection based on the growth trend, as well as monitoring the trend until 2029. The key targets and its indicators are grouped based on five categories of cities that are envisioned for AP’s cities, namely Productive City, Inclusive City, Sustainable City, Smart City, and Well-Governed City. The indicators and targets listed in each of the five categories are aligned with key state, national and international initiatives including 20 Non-negotiable goals (state government policy), Sustainable Development Goals 2015 (SDG 2015), Smart City (national program) and AMRUT (national program). • • • • • • • • • • • • • • •

Job creation: aligned with 20 Non-negotiable goals and SDG 2015 Local human resources: aligned with 20 Non-negotiable goals Slum: aligned with 20 Non-negotiable goals, SDG 2015 and Smart city Water supply: aligned with SDG 2015, Smart city and AMRUT Sanitation: aligned with 20 Non-negotiable goals, SDG 2015 and AMRUT Drainage: aligned with AMRUT Tree coverage: aligned with 20 Non-negotiable goals Wastewater: aligned with 20 Non-negotiable goals and SDG 2015 Solid waste: aligned with SDG 2015, Smart city and AMRUT Water conservation: aligned with 20 Non-negotiable goals Urban transport: aligned with Smart city and AMRUT Smart city: aligned with Smart city ICT infrastructure: aligned with 20 Non-negotiable goals ULBs financial independence Availability ULB development master plan: aligned with 20 Non-negotiable goals

Key reason for this alignment is to ensure AP cities’ performance being measured by parameters that are relevant to the state and national government’s policies so that ULBs can as well as recognized by national and international institutions. The table below shows the summary of the indicators required in monitoring the entire key target/planned outcome to achieve the envisioned cities in AP. These Indicators are statistics used to measure current conditions as well as to forecast the trends of growth or contraction of the programs within the five visions stated above. Table 12: Summary of Key Target and its Indicators No.

Key Target

Indicators

Unit

Baseline Existing (Data year)

1

1.1

Target Year 2019

Target Year 2022

Target Year 2029

Target Benchmark

0.6

Benchmarked to Singapore (average annual rate 2005-2014)

PRODUCTIVE

Job Creation

Unemployment rate in AP cities

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%

4.3 (2014)

3.9

0.8

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No.

Key Target

Indicators

Unit

Baseline Existing (Data year)

Target Year 2019

Target Year 2022

Target Year 2029

Target Benchmark

Local Human Resources

Percentage of skilled labour in the working age group (18-55 years old)

%

1.3

Road Infrastructure

Quality road density

Km/km2

Data to be collected

2

INCLUSIVE %

38.3 (2011)

25.0

17.4

0

Smart City indicator, 20 Nonnegotiable goals & SDG 2015

%

88.8 (2011)

93.8

95.6

100

Smart City indicator

Liter

115.6 (2012)

124.2

127.5

135

Smart City indicator

%

31% (2011)

61.7

73.2

100

Smart City indicator

%

67 30 (2011)

82

87

100

Smart City indicator

%

87.1 31 (2012)

92.6

94.8

100

Smart City indicator

9

20 Nonnegotiables & World Health Organization (WHO)

1.2

2.1

Slum

2.2

Water Supply

2.3

Water Supply

2.4

Sanitation

2.5

Drainage

2.6

Solid waste collection

3

SUSTAINABLE

3.1

Tree Coverage

Ratio of slum population to urban population Percentage of urban household with access to water supply Water supply quantity per capita per day Percentage of urban household with sewerage connections Percentage of urban household with drainage connection Percentage of urban population with solid waste collection

Green space per person

8.2%28 19.3

52.0

78.0

(2014)

sqm

Data need to be collected

12.25

Benchmarked to Singaporeâ&#x20AC;&#x2122;s Labour Force composition in 201429 According to the High Powered Expert Committee for Estimating the Investment Requirements for Urban Infrastructure Services

28

Labour Bureau (2014).Fourth Annual employment & Unemployment survey report. Chandigarh: Ministry of Labour & Employment 29 Ministry of Man Power (2014). Labour Force in 2014. Retrieved from http://stats.mom.gov.sg/Pages/Labour-Force-InSingapore-2014.aspx 30 Urban Mission Strategy paper, data date is unknown 31

Ministry of Urban Development (2012)

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No.

Key Target

Indicators

Unit

Baseline Existing (Data year)

Target Year 2019

Target Year 2022

Target Year 2029

Target Benchmark

3.2

Wastewater

Percentage of wastewater treated in the sewerage system

3.3

Solid Waste

Percentage of solid waste treated

%

7 (2015)

Water Conservation

Percentage of household with water harvesting structure attached

%

Data need to be collected

100

According to 20 Non-negotiables

3.5

Urban Transit

Percentage of modal share by transit in Class I cities

%

Data need to be collected

75

Ministry of Urban Development target

4

SMART CITIES

4.1

Smart City

Number of Smart City in AP

Number of cities

0 (2015)

3

6

14

GoAP target32

4.2

ICT Infrastructure

Number of Mee-seva centers

Number of service centers

822

1322

2143

3465

According to 20 Non-negotiables

4.3

ICT Infrastructure

%

To be addressed in e-Government sector paper

According to 20 Non-negotiables

100

Financial independence in city operation budget is critical to ensure reliable, continuous and efficient basic service delivery to urban residents

100

20 Nonnegotiable goals

3.4

5

Percentage of internet connectivity per 100 populations WELL-GOVERNED

5.1

ULBs independence

Percentage of Municipal Corporations that have financial independence in operation budget

5.3

Availability of ULB Development Master Plan

Percentage of ULBs has approved Master Plan

%

21 (2015)

41

61

100

Smart City indicator

50

67

100

Smart City indicator

%

Data to be collected

%

49 33

75

100

Periodic monitoring of these indicators is required to ensure that the growth and development of those identified cities in AP is on the appropriate track according to the growth projection. Any deviations from the projected track could thus be managed and dealt at the earliest time possible to avoid any drawback.

32 33

Source: http://www.thehindu.com/news/national/andhra-pradesh/plan-to-develop-14-smart-cities/article6380448.ece Source: Status of Master Plan 07-03-2015

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The details of the monitoring agent/body and monitoring period are listed in each section of indicators for each of the five visions of AP’s cities. Monitoring of these indicators will be carried out from the launch of the AP Vision 2029 until 2029. Table 13: Indicators’ alignment with state, national and international standards/initiatives

No 1

Key Target

Indicators

20 Non-negotiable Goals

SDG 2015

Goals 8: Decent Work and Economic Growth Target 5: By 2030, achieve full and productive employment and decent work for all women and men

1.1

Job Creation

Un-employment rate in AP cities

1.2

Local Human Resources

Percentage of skilled labour sin the working age group (1855 years old)

3. SHGs and youth have access to skills development

1.3

Road Infrastructure

Road density

2

INCLUSIVE

2.2 2.3

2.4

AMRUT

PRODUCTIVE

2. Every household has diversified livelihood opportunities and/or micro-enterprise

2.1

Smart City

Slum

Water Supply

Sanitation

Ratio of slum population to urban population

Coverage of urban area with access to water supply Water supply quantity per capita

Coverage of urban area with sewerage connections

1. Housing for all with access to toilet, safe-drinking water and regular power

6. End open defecation

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Goals 11: Sustainable Cities and Communities Targets 1: By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums

Affordable housing, especially for the poor

Goals 6: Clean Water and Sanitation Targets 1: By 2030, equitable access to safe and affordable drinking water for all

Adequate water supply

Goals 6: Clean Water and Sanitation Target 3: By 2030, improve water quality, halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally

1. Household level coverage of direct water supply connection

5. Coverage of sewerage network services

Goals 11: Clean Water and Sanitation Targets 2: By 2030, achieve access to adequate and equitable sanitation and hygiene for all and end open defecation

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No

Key Target

Indicators

2.5

Drainage

Coverage of drainage network

2.6

Solid waste

Coverage of solid waste collection

3

SUSTAINABLE

3.1

Tree Coverage

3.2 Wastewater

Green space per person

20 Non-negotiable Goals

Percentage of solid waste treated

3.4

Water Conservation

Percentage of household with water harvesting structure attached

3.5

Urban Transit

Percentage of modal share by transit in MC

4

SMART CITIES

4.1

Smart City

Number of Smart City in AP

ICT Infrastructure

Number of Mee-seva centers

4.2

AMRUT

Sanitation, including solid waste management

6. Efficiency of collection of sewerage

Sanitation, including solid waste management

7. Efficiency in treatment

efficient urban mobility and public transport

9. Service coverage of urban transport in the city

15. Every ward has green trees all over its geographic boundaries

Percentage of wastewater treated in the sewerage system

Solid Waste

Smart City

8. Coverage of storm water drainage network

5. Has functional solid/liquid waste management system

3.3

SDG 2015

Goals 6: Clean Water and Sanitation Target 3: By 2030, improve water quality, halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally Target 6a: By 2030, expand international cooperation and capacity-building support to developing countries in water- and sanitation-related activities and programmes, including water harvesting, desalination, water efficiency, wastewater treatment, recycling and reuse technologies Goals 11: Sustainable Cities and Communities Targets 6: By 2030, reduce the adverse per capita environmental impact of cities,

16. Every ward has functional water conservation and harvesting structures

17. Every Ward has functional information center, computer lab, and Mee-Seva Centre

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No

Key Target

4.3

ICT Infrastructure

5

20 Non-negotiable Goals

Indicators

Percentage of internet connectivity per 100 populations WELL-GOVERNED

5.1

ULBs financial independence

Percentage of Municipal Corporations that have financial independence in operation budget

5.3

Availability of ULB Development Master Plan

Percentage of ULBs has approved Master Plan

SDG 2015

Smart City

AMRUT

18. Every ward has telecom/internet connectivity

14. Every ward has its own dynamic development plan prepared by community participation

The indicator and target for 2029 listed in each section for each of the five vision of AP’s cities is aligned with the 20 non-negotiable goals, SDG 2015, smart city and AMRUT criteria.

9.2. Productive City In order to develop AP cities into a hub for business and production offering means to earn a living for majority of its residents, the following indicators are required to monitor the trend and execute the necessary programs. The productive indicator will include measuring the following items: ► Job Creation: To measure the unemployment rate in AP cities. ► Local Human Resources: To measure the percentage of skilled labour in working age population. ► Road Infrastructure: Quality road density to measure the level of accessibility and connectivity in AP cities The table below shows the summary of indicators required to achieve a Productive City status for AP cities by 2029. The monitoring agent/body for each indicator and its monitoring period are listed herewith.

Table 14: Indicators to achieve Productive City

S/No.

1.1

Indicators

Baseline Existing

Target Year 2019

Target Year 2022

Target Year 2029

Monitoring Agent

4.3

3.4

2.3

0.6

State Government of AP

Monitoring Period

Job Creation Unemployment rate in AP cities

1.2

Unit

%

Annual

Local Human Resources

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S/No.

Indicators

Percentage of skilled labour in the working age group (18-55 years old) 1.3

Unit

%

Baseline Existing

Target Year 2019

Target Year 2022

Target Year 2029

Monitoring Agent

8.2

19.3

52.0

78.0

State Government of AP

every 6 months

12.25

ULBs

Annual

Monitoring Period

Urban Road Infrastructure Road density

Km/km2

Data to be collected

â&#x2013;ş GAP ANALYSIS Cities are the engines of economic growth with significant contribution to national economy and GDP. Contribution of urban sector to GDP in the state of AP is about 65%. However, the potential of urban areas is not yet fully understood and utilized. In order to fully utilize the cities and achieve the vision of Productive City, cities in the state of AP must close the gap/disparity in unemployment rate, percentage of skilled labour in working age population and urban road infrastructure. Job Creation: The reduction of unemployment rated in AP cities from 4.3% to 0.6% means creating almost 7.3 million jobs during 2015-2029 period. The average annual growth of employment in AP cities is about 4.7%, slightly faster than the urban population growth at 4.4% during 2014-2029 period. To lower unemployed rate to 3.4% (national average rate) and 2.3% (top three state rate) and finally 0.6% (benchmarked Singapore rate), the periodic average job growth rate will be faster than urban population growth rate of the same period (Table 15). In 2014-2029 period, there will be 3.23 million jobs created. This figure in 2020-2022 and 2023-2029 periods are 1.23 and 2.83 million. Table 15: Change in urban employment during 2014-2019, 2020-2022 and 2023-2029 periods. Periodic average annual pop. growth rate

Urban working age pop.34

Urban Workforce35

Unemployed rate

Employed pop.

Periodic average annual job growth rate

Add. Job created during each period

Year

Urban pop.

2011

13,806,181

9,755,000

6,828,500

2014

15,740,633

11,121,821

7,785,275

4.30%

7,450,508

2019

22,361,721

7.3%

15,800,067

11,060,047

3.40%

10,684,005

7.5%

3,233,498

2022

24,660,326

3.3%

17,424,187

12,196,931

2.30%

11,916,401

3.7%

1,232,396

2029

29,992,939

2.8%

21,192,039

14,834,427

0.60%

14,745,420

3.1%

2,829,019

34

Base on an assumption that working age population will remain accounting for 64.5% of total urban population as recorded in 2011 35 Base on an assumption that labour force participation rate will be 70%

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Local Human Resources: To allow more residents of AP cities to participate into the workforce and at the same time achieve higher productivity, they will be trained in various fields. The percentage of skilled labour in the working age group in AP cities will increase from 8.2% (national average) to 78%. The 2029 target for urban areas is set at 78%, higher than 70% target for the state of AP since there is a higher concentration of skilled labour in the cities. To meet this target, AP government together with private sector will provide training for over 11 million youth and working age adults in urban areas. During the first two periods of 15-year development, 80% of training activities will be provided to urban residents and rural migrants to support industrial development in the state. The numbers of trainees during 2015-2019, 2020-2022 and 2022-2029 periods are approximately 17 lakhs, 42 lakhs and 53 lakhs to increase the percentage of skilled labour in the urban areas to 19.3%, 52.0% and 78.0% respectively. Table 16: Growth of skilled labour during 2015-2019, 2020-2022 and 2023-2029 periods.

Period

Total trained labours in AP36

Percentage of trainees are urban residents

Total trained labour in AP cities

2011 2019 2022 2029 Total

Urban Workforce

Total skilled labour in AP cities

Percentage of skilled labour in AP cities

6,828,500

559,937

8.2%

2140000

80%

1,712,000

11,060,047

2,134,977

19.3%

5200000

80%

4,160,000

12,196,931

6,342,347

52.0%

12600000

42%

5,273,301

14,834,427

11,570,853

78.0%

19,940,000

56%

11,145,301

Urban Road Infrastructure: Road system has a major role in economic development as it provides connection between production sites and markets, people and job opportunities. There is a very strong positive correlative between a city’s economic development and the quality of its road network. Therefore, an important KPI on productivity is to address the extension of road network. GoAP and ULBs will collect and monitor data on road density to provide timely and sufficient policy support and investment to the road network of every AP city.

9.3. Inclusive City Being inclusive means equitable opportunities and social benefits of city life to all residents regardless of age, gender, and caste structure. The following indicators are required to monitor the inclusiveness of AP cities. ► Slum Upgrading: Proportion of slum population to urban population. ► Public Facility Coverage: indicators relating to tree coverage, water supply, sewerage network, solid waste collection and drainage network. The table below shows the summary of indicators required to achieve an Inclusive City status for AP cities by 2029. The monitoring agent/body for each indicator and its monitoring period are listed herewith.

36

According to Skill Development Sector Paper

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Table 17: Indicators to achieve Inclusive City

S/No.

2.1

Indicators

Unit

Baseline Existing

Target Year 2019

Target Year 2022

Target Year 2029

Monitoring Agent

Monitoring Period

Slum Upgrading

2.1.1

Ratio of slum population to urban population

% of population

38.3

25.0

17.4

0

Commissioner and Director of Municipal Administration

Annual

ULBs 2.2

Public Facility

2.2.1

Coverage of urban area with access to water supply

% of population

88.8

93.8

95.6

100

ULBs

Annual

2.2.2

Increase of water supply quantity per capita

liter

115.6

124.2

127.5

135

ULBs

Annual

2.2.3

Coverage of urban area with sewerage connections

% of population

31

61.7

73.2

100

ULBs

Annual

2.2.4

Coverage of Drainage Network

% of population

67

82

87

100

ULBs

Annual

2.2.5

Coverage of solid waste collection

% of population

87.1

92.6

94.8

100

ULBs

Annual

â&#x2013;ş GAP ANALYSIS Being an Inclusive City, AP cities should reduce the number of urban population living in slum condition, and to provide basic services in the cities. Urban poor constitute close to 40% of urban population and their productivity is constrained by non-availability of housing and basic services. In order to achieve SwarnAndhra Vision 2029, AP cities will upgrade slum areas with a target to reduce the percentage of urban population/households living in slum areas from 38.3% in 2011 to zero in 2029. This will assist in alleviating the urban condition and reduce the slum population from 38% to 0% by 2029. The slum upgrading will be phased as follow:

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Table 18: Phasing for slum upgrading program.

Year

Number of slum households

Percentage of urban households living in slum

2011 2019 2022 2029 Total

1,589,480 372,695 126,463 0

38.3% 6.5% 2.0% 0%

Number of households benefit from slum upgrading 1,216,785 246,232 126,463 1,589,480

Even though coverage of services in AP cities is generally better than the national average in India, there is still room for improvement. At present, out of 107 ULBs in AP, only 64 ULBs supply water on a daily basis, while the rest is either on alternate days, once in three days, or once in four days. The upgrading program in water supply thus will aim to improve both network coverage from 88.8% urban households in 2011 to 100% in 2029 and supply quantity from 115.6 liters per capita per day in 2012 to 135 liters in 2029. With regards to sewerage system and drainage system, there is no ULB in the state with 100% sewerage system and only few class 1 cities have partial sewerage system and drainage system. Overall, drainage coverage service level is only 67%. The lowest service coverage in infrastructure is sewerage system. It is estimated that only 31% of urban population in AP served by sewerage system. Programs to increase the coverage of urban area with access to water supply, sewerage connections and drainage connections will be put in place and provide 100% coverage to urban areas. These efforts will particularly benefit urban poor and slum dwellers that usually live outside the reach of service networks.

9.4. Sustainable City One of AP Vision 2029 is to create cities that will be pioneer developments in minimizing the impact on fertile agricultural lands, ecologically sensitive areas and natural resources that sustains the settlement and makes it livable. The future cities of AP will promote sustainable technologies practices for instance increasing public transportation share, low-impact development, etc. This aligns directly with the 12th Five Year Plan (2012 – 2017) prepared by the Planning Commission of India which emphasize on sustainability and green mechanism seeking to fulfil a “Faster, Sustainable, and More Inclusive Growth”. Indicators to achieve Sustainable City include the following: ► ► ► ► ►

Tree Coverage: Measuring the green space area per capita. Wastewater Treatment: Measured by the percentage of wastewater treated in the sewerage system. Solid Waste Management: Measured by the percentage of solid waste being treated in urban areas. Water Conservation: Measured by the percentage of household with water harvesting structure attached. Urban Transport: Measured by the percentage of modal share by transit in Municipal Corporation.

The table below shows the summary of indicators required to achieve Sustainable City status for AP cities by 2029. The monitoring agent/body for each indicator and its monitoring period are listed herewith.

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Table 19: Indicators to achieve Sustainable City

S/No.

Indicators

Unit

3.1

Tree Coverage

3.1.1

Green space area per capita

3.2

Water Resources

3.2.1

Wastewater treated in the sewerage system

3.3

Waste Generation

3.3.1

Treated solid waste

3.4

Water Conservation

3.4.1

Household with water harvesting structure attached

3.5

Urban Transport

3.5.1

Modal share by transit in Class I cities

Baseline Existing

Target Year 2019

Target Year 2022

Target Year 2029

Monitoring Agent

Monitoring Period

sqm

Data need to be collected

9

ULBs

Annual

%

21

41

61

100

ULBs

Every 6 months

%

7

50

67

100

ULBs

Every 6 months

%

Data need to be collected

100

ULBs

Every 6 months

%

Data need to be collected

75

ULBs

Annual

► GAP ANALYSIS Based on the indicators proposed for AP cities to reach Sustainable City target, the gaps can be summarize into: environmental protection and transportation plan. The current tree coverage norm is not exist, and to bridge the gap, State needs to have a control plan that will lead to sustainable urban development and a better protection of natural environment. For environmental protection, gaps on environmental protection indicate that wastewater treatments need to be better by 80% overall or 6% annually from 21.4% to 100% and solid waste treatment by 93% overall or 7% annually from 7% to 100%. Both figures on environmental protection are based on central government’s Benchmarks for Smart Cities that indicate to treat 100% of municipal wastes. Due to water shortage in the state, GoAP makes rainwater harvesting mandatory in all municipal corporations, and municipalities. With this effort, number of household with water harvesting structures will reach 100% by 2029. With regards to the tree coverage, water conservation and urban transport, data need to be collected for the baseline year so that both the gaps and investment required can be estimated. Ernst & Young LLP | CPG Consultants

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9.5. Smart City Developing Smart City as one of AP Vision 2029 aligns with India Central Government’s plan to upgrade urban India through building 100 Smart Cities – cities outfitted with high-tech communication capabilities – across the country. Prime Minister Narendra Modi who took office in May 2014 launched the program stating that building new cities is a way to deal with the country’s rapidly urbanizing population. 37 What makes a city smart? Generally this concept refers to cities using technology to solve urban problems. 38 These indicators for Smart City relate to Smart Region initiatives described in Section 8.3 Smart Region of this document. Indicators to achieve Smart City include the following: ► Smart City Program: Measured by number of Smart Cities established in AP. ► ICT infrastructure: Measured by number of Mee-seva centers and percentage of internet connectivity per 100 populations. The table below shows the summary of indicators required to achieve a Smart City status for AP cities by 2029. The monitoring agent/body for each indicator and its monitoring period are listed herewith. Table 20: Indicators to achieve Smart City

S/No.

Indicators

Unit

4.1

Smart City Program

4.1.1

Number of Smart Cities Established

4.2

ICT Infrastructure

4.2.1

Number of Mee-seva centers

4.2.2

Internet connectivity per 100 populations

Number of cities

Number of service centers

%

Baseline Existing

0

822

Target Year 2019

3

1322

Target Year 2022

6

2143

Data need to be collected

Target Year 2029

Monitoring Agent

14

Commissioner and Director of Municipal Administration

Annual

3465

Commissioner and Director of Municipal Administration

Annual

Commissioner and Director of Municipal Administration

Annual

Monitoring Period

► GAP ANALYSIS Unintegrated, unconnected data storage, and lack of effectiveness in data integration implementation gaps can be bridged by developing an integrated data hub. Although there are some initiatives already present to bridge the gap, AP cities need to raise the percentage of Municipal Corporations that are using technology-based integrated 37

Tolan, Casey, Cities of the future? Indian PM pushes plan for 100 ‘smart cities’, 18 July 2014, http://edition.cnn.com/2014/07/18/world/asia/india-modi-smart-cities/ 38 Ibid.

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system for urban planning and management system. Geographical Information System (GIS) is one of the technologies that are widely used by governments around the world as efforts to bridge the gaps. In order for AP’s cities to become smart cities, initiatives and programs are needed from every stakeholders involved. Smart City programs that are endorsed by the Chief Minister targeted AP to have 14 Smart Cities by 2029. This initiative will be supported by the government in every district and most importantly reinforced by adequate funding. With regards to ICT infrastructure, GoAP will increase the coverage of Mee-seva centers to every ward in the state. Therefore, by 2029, total number of 3465 Mee-seva center would be set up to support both the improvement in governance as well as Smart City initiative.

9.6. Well-Governed City A Well-Governed City is fundamental in ensuring a healthy growth of the city. Without an efficient and comprehensive system in governing the city, the vision of a Productive, Inclusive, Sustainable, and Smart City may not be achieved. Monitoring the performance management of the city governance will be done periodically by the government to ensure that the city’s governance functions properly. Indicators to achieve a Well-Governed City include the following: ► ULB Independences: Measured by percentage of Municipal Corporations that has financial independence in operation budget. ► Availability of ULB Development Master Plan: Measured by percentage of ULBs has approved master plan. The table below shows the summary of indicators required to achieve a Well-Governed City status for AP cities by 2029. The monitoring agent/body for each indicator and its monitoring period are listed herewith. Table 21: Indicators to achieve Well-Governed City

S/No.

Indicators

Unit

Baseline Existing

Target Year 2019

5.1

ULBs Independence

5.1.1

Ratio of Municipal Corporations that has financial independence in operation budget

5.2

Availability of ULB Development Master Plan

5.2.1

Percentage of ULBs has approved Master Plan

%

%

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Data to be collected

49

75

100

Target Year 2029

Monitoring Agent

Monitoring Period

100

Municipal Administration and Urban Development

Annual

100

ULBs & Municipal Administration and Urban Development

Annual

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► GAP ANALYSIS ULBs’ financial independence in operation budget is critical since it ensures the reliability and continuity of funding to support important local service delivery such as water supply, waste collection, emergency services, etc. Without financial independence, service provision at local level may be disrupted by political and administrative conflicts at higher levels of government which ULBs have no control. Therefore, it is important that at least all Municipal Corporations of large cities with population above 3 lakhs are able to achieve this target by 2029. Currently, even the largest city, Vishakhapatnam, fails to meet this target since the city still use a small proportion of the State and Central government’s funding for operational purposes. To achieve the target, it requires Municipal Corporations to improve effectiveness and efficiency of their revenue generation as well as service delivery. Three key initiatives will be proposed to help Municipal Corporations to do so: updating their property tax collection system using GIS technology to include new urban areas, revision of their service charges to reflect the full cost of operation and maintenance, and lastly, allow private sectors to participate in service delivery to improve its efficiency. In order to achieve a well-governed city, it is important to have a master plan to guide the socioeconomic development of the city. By 2022 onwards, it is targeted that every ward has its own comprehensive dynamic development plan to guide the growth of the overall city development top achieve each target set by the government.

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10. Implementation Programs

10. Implementation Programs

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10.1. Programs & Investment Given the reality that state funding for urban development is very limited, only 4.2% of the state expenditure during 2013 -2014 final year, programs for urban development sector should look for alternative funding sources including central government funding and private capital through PPP model. Therefore, the overall direction to implement programs is to focus on policy making through planning exercises, institutional building and fiscal incentives in order to create enabling environment that empowers ULBs to take leadership in city building, to tap on central government grants and to engage private capital.

10.1.1. Productive City To help AP cities becoming more productive and attractive to investments, the government proposes four major initiatives: ► Growth-Pole Urban Regions:  Program description: As urban population and economic activities will be increasingly concentrated in three major regions in AP: Vishakhapatnam, Capital Region and Chittoor Region, preparation of land and infrastructure to accommodate growth is critical. Therefore, the primary and major program to support Productive City vision is Comprehensive Metropolitan Master Planning Program (CMMPP) for each of the three Growth-Pole Urban Regions. The ultimate goal of the program is to ensure a sufficient supply of land, housing and infrastructure at market competitive prices in each urban region to maintain their competitive edge among Indian metropolitan areas. This program will include continuing data collection, preparation of master plans, public/business consultation, implementation monitoring and revision of the plan every five years. The difference between the proposed CMMPP and Metropolitan Planning Committee (MPC) is that the former aims to be a top-down planning guidance to all participated local governments while the latter is a consolidations of all locally-adopted plans. With this new approach, CMMPP has the authority to coordinate development activities and discourage fierce competitions among ULBs for funding and investments. AP Context Metropolitan Planning Committees (MPCs) have been established across India to oversee the developments in metropolitan areas with large populations of 10 lakhs or more. In AP where MPC is not yet constitutionalized, Urban Development Authorities (UDA) are in charge of consolidating local development plans prepared by its municipalities and panchayats, but extent and nature of investment is ultimately made by the agencies of the GoI39. However, aside from this one administrative body consolidating and regulating these individual local plans, it is perhaps more effective for the UDA to develop a comprehensive overarching plan for the entire state. This will ensure a top-down and coordinated means of regional planning, rather than piecing together various individual local plans. Case Study: National Capital Region Plan-202140

39 Jawaharlal Nehru National Urban Renewal Mission (JNNURM), Regional Capacity Building Hub (2011) Module 1 – Urban Governance 40 National Capital Region Planning Board, Ministry of Urban Development, Government of India (2012) Annual Report (2011-2012)

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Urban Development Sector Paper – Draft for Discussion This is a unique and good example of inter-state regional development planning in India, comprising the collaboration of four State governments of the National Capital Territory of Delhi, Haryana, Uttar Pradesh and Rajasthan – with NCT Delhi as it core. The vision of the plan is to develop the entire NCR as a region of global excellence, aiming to promote economic growth and balanced development of the region with minimal adverse environmental impact. This includes efficient transportation, power, communication, drinking water, sewerage and drainage networks well integrated with existing land use patterns. For example, improving connectivity in the region is addressed collectively under this plan. The NCR Planning Committee conducts studies on the feasibility and existing infrastructure in the four states to make informed decisions at the regional scale, before implementing financing and upgrading mechanisms to be implemented accordingly for each state. An example would be the Planning Committee’s focus on developing a comprehensive mass commuter system. This has resulted in the extension of the Delhi Metro being extended to Noida, Gurgoan and Ghaziabad. There are also presently new rail projects to upgrade existing rail lines and construct new ones. 

Funding estimation: Based on experience of other Asian countries, the cost of preparation for a high quality comprehensive master plan by internationally renowned consultants including market analysis/positioning, spatial planning, financial modelling and promotion of the plan varies from USD 2.4 million to USD 3.5 million. The total cost for the Government can be estimated by adding another 20% for administration and chargeable taxes. In summary, the total investment into a comprehensive master plan can vary from INR 18.3 crore to INR 26.7 crore for each region or INR 54.9 to INR 80.1 crore for all three Growth-pole regions. This planning effort should be repeated every 5 years. Planning period Funding required (crore) (cumulative)

2016-2020

2021-2025

2026-2030

54.9 – 80.1

54.9 – 80.1

54.9 – 80.1

► State-Level Coordination in Infrastructure and Industrial Investment:  Program Description: It is critical to have state-level coordination in term of industrial and trunk infrastructure (port, airport, expressway, etc.) developments which require economic clusters and economies of scale to achieve efficiency and competitiveness. This initiative could be implemented through three programs:  Market Positioning for Industrial Node Cities: Feasibility studies to determine the market positioning are critical as they identify competitive advantage of each city and provide directions on both investment promotion and infrastructure development.  State Infrastructure Master Plan: Development of trunk infrastructure such as airport, seaport, expressway and railway are highly capital-intensive and require economies of scale to achieve operational efficiency. Therefore, having clear direction and coordination at the state level is critical to attract private capital. The State Infrastructure Master Plan can be a ‘one-stop’ policy paper that inform and guide the market on the availability of industry-supporting infrastructure. No funding estimation is provided for this program since its scope go beyond urban development sector. AP Context

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Urban Development Sector Paper – Draft for Discussion The Government of AP drafted the AP Infrastructure Policy in 2000 41, which served to facilitate the undertaking of Mega Infrastructure Projects in the State and to attract industries, for the overall development of the State. This policy aimed at improving private sector participation in infrastructure development and has seen impressive developments in AP’s road, airport and port sectors. Case Study: Ministry of Shipping’s Maritime Agenda 2010-202042 This plan comprises a comprehensive policy framework for the development and modernization of the major ports in India, to further their collective development. This includes the construction of new berths and terminals, berth upgrading and expansion projects, mechanization of cargo handling operations and enhancing port connectivity. An interesting initiative under this Agenda is the establishment of the Electronic Data-Interchange-Port Community System (EDI-PCS). This was introduced at all major ports to computerize the Port Community System, to create a uniform and centralized online exchange hub for all stakeholders involved in the port sector to gain relevant information and complete transactions smoothly. This has heralded a paperless regime in India port businesses across all major ports, enhancing access to India’s port industry. 

State Industrial Infrastructure Corporation: To avoid unnecessary competition for industrial investment among different cities and districts in AP, most of the investment into land and infrastructure for industrial developments should be controlled by a state-level corporation. This entity already exists in AP and would continue receiving high support from the state government to become an effective market-oriented policy tool for the State. No funding estimation is needed for this existing entity. AP Context Wholly owned by the Undertaking of the Government of AP, APIIC is vested with the objective of providing industrial infrastructure through the development of industrial areas. APIIC currently maintains information on land availability but there is currently a lack of a transparent system through which investors can access necessary information. This has been accredited to the lack of a multiple level detailing that affects land identification and selection by investors. Case Study: Delhi Mumbai Industrial Corridor (DMIC) Project43 AP can learn from the DMIC Project which is implemented under a four-tier institutional framework. The DMIC holds the objective of expanding India’s manufacturing and services base, to develop DMIC as a “Global Manufacturing and Trading Hub”. Given the large number of projects within the DMIC, it’s a four-tier institutional framework proves to be very effective. For example, there is the Delhi Mumbai Industrial Corridor Development Corporation (DMICDC), which is in charge of coordinating with various Union Ministries, State Governments, Financial Institutions and Infrastructure development agencies. This is complemented with State-Level Coordination Entities, which are in charge of acquiring and assisting in land acquisition and other necessary local protocols as needed for setting up of infrastructure. This ensures a well-regulated and organized governing institutional body that deals with managing different aspects and scales of the corridor’s development.

41

Government of AP (2000) AP Infrastructure Policy Government of India, Ministry of Shipping (2011) Maritime Agenda: 2010-2020 43 Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India (Aug 2007) DelhiMumbai Industrial Corridor Concept Paper 42

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Funding estimation: Most, if not all, Industrial Node Cities are located within two designate industrial corridors in AP: Visakhapatnam – Chennai Corridor (VCIC) and Chennai – Bangalore Corridor (CBIC). Studies for the nodes of the former are already funded by Asian Development Bank. Therefore, the program on market positioning and feasibility studies for Industrial Node Cities will only need to fund studies for cities of the latter corridor. The cost for conducting these market positioning and feasibility studies for Industrial Nodes in CBIC will be assumed to be similar to ADB’s funding for VCIC studies which is USD1.5 million or INR 9.5 crore. Term of investment

2019

Market positioning study for Industrial Node Cities (INR crore)

2022

2029

9.5

► Skill training for urban residents and migrants  Program Description: Skill training program is critical for both economic development and poverty alleviation as it helps to improve the size and quality of labour pool to serve the need of the economy and at the same time equip people with better skills to earn their livings. AP Context - AP State Skill Development Corporation (APSSDC): APSSDC was set up under the Department of Skill Entrepreneurship and Innovation, to strengthen and enhance skills development in AP. Together with other AP state departments, APSSDC works towards establishing AP as the “Skill Capital” of India by 2020 – with a specific focus on the working age population (15-39 years). APSSDC has set up 17 skill development centers that offer programs in modern technologies, software development, electronics and communication. Skills development is especially vital for key urban sectors such as industries and services, which accounted for 73% of the state’s Gross State Domestic Product (GSDP) in 2014-15. The work by APSSDC has been also complemented by other significant initiatives such as the establishment of various universities, knowledge institutions and hubs in various districts such as Kadapa, West Godavari and Srikakulam. 

Investment costs Table 22: Investment cost of skill training.

Year 2011 2019 2022 2029 Total

Percentage of skilled labour target

Workforce

8.2% 19.3% 52.0% 78.0%

6,828,500 11,060,047 12,196,931 14,834,427

Training participants

1,712,000 4,160,000 5,273,301 11,145,301

Training cost per participant (INR crore)

22,00044

Training cost (INR crore) 3,766 9,152 11,601 24,520

► Upgrading of urban road networks 44

According to Skill Development Sector Paper

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Program Description: GoAP will invest into urban road networks to improve the connectivity between production and markets, people and job opportunities as well as to reduce the logistics cost for business operating in the state. Investment costs since there is no baseline data for urban road networks in AP cities, the service backlogs and desirable standards set by the High Powered Expert Committee (HPEC) is used for estimating investment requirements. Table 23: Investment cost for urban road networks in AP

City Size Class Class IA Class IB Class IC Class II Class III Class IV+ Sub-total

Total per capita investment cost (INR crore) 23,460 23,460 29,325 16,800 22,400 22,400

Total

2019 (INR crore)

2022 (INR crore)

2029 (INR crore)

3,629.56 11,513.70 2,481.77 1,431.50 2,151.24 21,208

2,705.92 9,149.55 1,385.88 951.16 1,923.25 16,116

9,712.03 15,854.43 2,845.84 1,710.38 6,256.24 36,379

73,702

► Summary of Productive City initiatives: Table 24: Strategies, programs, in-charge institutions and investment costs for key themes – Productivity

Investment costs (INR crore) No.

1

Strategic initiatives

Growth-Pole Strategy

2

3

State-level coordination in infrastructure and industrial investment

4

5

Skill training for urban residents and migrants

Programs

Comprehensive Metropolitan Master Plan for Growth-pole regions Market positioning and Feasibility studies for Industrial Node cities

In-charge Institution

Metropolitan Development Authorities

2015-2019

2020-2022

2023-2029

54.9 to 80.1

54.9 to 80.1

54.9 to 80.1

Directorate of Town and Country Planning

9.5

AP Industrial Infrastructure Corporation

AP Industrial Infrastructure Corporation

Existing entity

Job training programs with focus in growth-pole regions and Industrial Node cities

ULBs

3,766

State Infrastructure Master Plan

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No funding estimation

No funding estimation

9,152

11,601

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Urban Development Sector Paper – Draft for Discussion

Investment costs (INR crore) No.

6

Strategic initiatives

Improvement of urban road networks

Programs

Improve and Expand Urban Road Networks

In-charge Institution

ULBs

2015-2019

2020-2022

2023-2029

21,208

16,116

36,379

10.1.2. Inclusive City There are three key initiatives for Inclusiveness theme: ► Slum Integration into City Development and Property Market through Planning and Infrastructure Connection: Slum areas should not be treated as unique and an unintegrated part of the city land market. Rather, slum areas should be recognized for their market value and brought into the property market though service and infrastructure connection. By doing this, the city can engage private sector into slum upgrading and redevelopment as well as give slum communities an opportunity to leverage on their own enormous land value. In addition, to ensure a sufficient supply of affordable land and housing for urban poor and migrants, each ULB/Metropolitan Urban Development Authority should have mandate and financial strength to consolidate land for residential development, both affordable and market housing. Through this mechanism, the Authority can later use the capital gained through land and housing sale at market rate to fund affordable developments. AP Context In 2009, the Government of India (GOI) introduced the Rajiv Awas Yojana (RAY) Scheme for Slum dwellers and urban poor with the intention of realizing inclusive and sustainable growth in urban areas45. This is implemented in conjunction with the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) initiative to support states that are agree to allocate property rights to people in slum areas in order to achieve a slum free India in five years. In AP, the state has decided to implement the RAY scheme and constitute a state level committee and departmental committee to propose recommendations for the legal legislative framework. For instance, to enable slum dwellers to leverage on formal credit institutions, legal rights are to be assigned to lands encroached or house property in multi storied buildings as mortgage-able and heritable. This put in place a structured and clear regulation for loans borrowing. Additionally, 15% of development land or 25% of FAR in new housing or integrated developments for economically weaker section (EWS) or low income group (LIG) are expected to be set aside for the poor to deter slum formation. Case Study: Dharavi Redevelopment Plan & Bombay Urban Development Project (BUDP) Under the Prime Minister’s Grant Project (PMGP), a master redevelopment plan was prepared for Dharavi, which houses one of the largest, high-density slums in Mumbai, in 1985. This was financially backed by the PMGP which received US$20 million in grants from the government. Dharavi underwent carefully planned reconstructions, whereby co-operatives of slum households

45

Ministry Administration & Urban Development Department (2009) Government Order: Slum Free AP by 2014

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Urban Development Sector Paper – Draft for Discussion were awarded with 18m2 walk-up tenements and families were relocated to transit accommodation on rental basis during construction period46. Lending institutions were established as well to provide financial assistance as well. In 1991, Public-Private Partnerships in the Slum Redevelopment Scheme (SRD) was introduced to facilitate slum redevelopment that allows slum dwellers and private builders to have extended leases and earn profits by maximizing floor area ratio (FAR). Moreover, a broader initiative at addressing slums was launched across Mumbai (Bombay) in 1985, the Bombay Urban Development Project (BUDP).This represented a shift from earlier slum clearance strategies, towards more supportive-centric policies that aimed to improve slum conditions and also regulate tenure within slums. For example, a two-pronged approach to regularize slum squatter settlements and supply serviced land to alleviate slum problems was adopted under the BUDP. Slum households were granted long-term legal tenure and basic services whereby the standard plot sizes and infrastructure were determined based on “affordable costs” depending on the zone the slum is located as set forth in the Development Plan. Co-operative societies of slums dwellers on BMC and government land were granted leasehold rights and 10% private land47. This has been considered as an innovative way of dealing with slum dwellings and revolutionized slum-inclusive planning in India. ► Smart Region Authority to Improve Service Delivery in Small Towns and Surrounding Rural Area: Smart Region Authority whose jurisdiction is similar to Metropolitan Development Authority with service delivery functions such as healthcare, higher education, water and power supply. While Smart Region Authorities will need extra funding for setting up in the early stage of formation, in the long-term, they may be able to reduce the total service delivery cost per capita due to higher level of efficiency in both management and operation at regional scale.  Program Description: A Smart Region Commission is proposed to be set up at State level to oversee the formation of Smart Region Authorities. The Commission will be in charge of preparing policies, formation criteria and guidelines on functions and jurisdictions of Smart Region Authority. ► PPP Model in Service Delivery: PPP model is suggested to be the key to expand infrastructure (water, power, transportation) and improve service delivery efficiency. To ensure the success of PPP model in both service delivery and infrastructure development, two key policies are recommended:  Separation between regulatory bodies and service delivery enterprises within the government system to allow for private sector’s participation in a fair market competition in service delivery and infrastructure development;  And strengthening ULB/Metropolitan Development Authorities legally, financially and technically to plan, consolidate, manage, develop and sell/transfer land to private sector in return for funding of public infrastructure projects. AP Context Under the Infrastructure Authority Act, the Government of AP has legislated a number of PPP projects that cover the development of infrastructure in AP48. This Act primarily focuses on facilitating private developers in securing the necessary administrative approvals, arbitrations and fiscal regulations. This includes major projects such as Kakinada Special Economic Zone (SEZ), New IT Parks in Vizag, Vijayawada, Warangal and Tirupathi.

46 47

48

Risbud, N. (2003) Understanding Slums: Case Studies for the Global Report on Human Settlements Dovey, K. & Tomlinson, R. (2012) Dharavi: Informal Settlements & Slum Upgrading Ministry of Finance, Government of India (n.d.) Presentation on Public Private Partnership

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Urban Development Sector Paper – Draft for Discussion Case Study: Uttar Pradesh Swajal Project49 In Uttar Pradesh, a project assisted by the World Bank known as Swajal Project, was implemented in 1994 through four key phases benefitting over 1000 villages. A new institutional structure comprising of three entities namely the Project Management Unit (an autonomous government society) of Uttar Pradesh Water Board, Non-Government Organization (NGO) support organizations, and the village water and sanitation committees (VWSC), came together through a ‘demand driven partnership’ initiative to improve sanitation and water supply. Moreover, a demand-centric approach helps ensure investment sustainability by using willingness to share costs as the proxy for demand. 

The NGOs serve as the catalytic support organization and social intermediaries between the project management unit and the community, which facilitate the dissemination of rules to the villagers while helping the community form a representative organization (VWSC), and community decision-making regarding water-related facilities. Capital cost recovery and full community responsibility for operation and maintenance are introduced too. As such, with NGO involvement, cost recovery is possible and thus safeguarding the feasibility of the project. Furthermore, through partnership between the government and NGOs, larger scale and rapid improvements in sanitation and water supply programmes can be realized with greater resources pooling.

► Infrastructure Investment: Slum Upgrading Based off population projections for the short- (2019), medium- (2022) and long-term (2029), slum upgrading investment costs are determined for these three scenarios. Firstly, population projections for the cities in 2011 serve as the baseline for Slum Upgrading investment costs calculations. By benchmarking to the best 3 states in AP, a baseline 38.3% of the urban population being slums is assumed for 2015. As for the investment cost projections, 6.5%, 2% and 0% of urban population in slums targets for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period respectively are used. The table below illustrates that an estimated incremental investment cost for slum upgrading is INR 36,503 crore in 2015 - 2019 period, INR 7,386 crore in 2020 - 2022 period and INR 3,793 crore in 2023 - 2029 period, as shown in the Table below. Table 25: Investment for slum upgrading.

Summary Total Costs for Slum Upgrading 2015-2019

2020-2022

2023-2029

No. of Households

1,216,785

246,232

126,463

Total Cost (INR Crore)

36,503.55

7,386.96

3,793.90

► Investment in Water Supply Coverage Based off population projections for the short- (2019), medium- (2022) and long-term (2029), water supply investment costs are determined for these three scenarios, with 88.8% service standard baseline in 2011

49

Mavalankar, D. & Shankar, M. (n.d.) Sanitation and Water Supply: The Forgotten Infrastructure, Sanitation and Panchayats in Infrastructure

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Urban Development Sector Paper â&#x20AC;&#x201C; Draft for Discussion Water supply targets are estimated at 93.8%, 95.6% and 100% in 2019, 2022 and 2029 respectively for all the cities in AP, which have been categorized according to their city size class. The water supply PCIC distribution extension and upgrading of water supply for the different city classes are used to determine the investment costs required for water supply infrastructure. The calculations reveal that incremental amount of water supply investments costs. The table below illustrates an estimated total of INR 9,278 crore, INR 1,094 crore for and INR 2,628 crore for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period is needed respectively.

Table 26: Investment for water supply network expansion.

Summary Total Cost per Class For Whole AP State (INR Crore) 2020-2022

2023-2029

City Size Class

2015-2019

Class IA

-

-

-

Class IB

1,136.17

133.80

451.05

Class IC

4,194.75

589.18

1,009.17

Class II

1,359.99

79.82

155.43

Class III

1,324.69

48.83

63.58

Class IV+

1,263.38

242.88

949.21

Total

9,278.98

1,094.51

2,628.44

â&#x2013;ş Infrastructure Investment: Water Production Based off population projections for the short- (2019), medium- (2022) and long-term (2029), water production investment costs are determined for these three scenarios, with 88.8% service standard baseline in 2011. Water production targets are estimated at 124.2, 127.5 and 135 liters per capita per day in 2019, 2022 and 2029 respectively for all the cities in AP, which have been categorized according to their city size class. The calculations reveal that incremental amount of water production investments costs, as the table below illustrates an estimated total of INR 602 crore, INR 238 crore and INR 580 crore for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period are needed respectively. Table 27: Investment for water production.

Summary Total Cost per Class For Whole AP State (INR Crore) City Size Class

2015-2019

2020-2022

2023-2029

Class IA

-

-

-

Class IB

105.99

44.74

150.81

Class IC

292.90

120.32

206.09

Class II

102.64

19.78

38.52

Class III

28.60

8.91

11.79

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Urban Development Sector Paper – Draft for Discussion Class IV+

71.89

44.32

173.20

Total

602.02

238.07

580.41

► Infrastructure Investment: Sewerage Network Coverage Based off population projections for the short- (2019), medium- (2022) and long-term (2029), sewerage network investment costs are determined for these three scenarios, with 31% service standard baseline in 2011. Sewerage Network targets are estimated at 61.7%, 73.2% and 100% in 2019, 2022 and 2029 respectively for all the cities in AP, which have been categorized according to their city size class. The sewerage network PCIC for the different city classes are used to determine the investment costs required for sewerage network infrastructure costs. The calculations reveal that incremental amount of sewerage network investments required. Table below illustrates an estimated total of INR 3,647.08 crore, INR 1,095.56 crore and INR 3,049.01 crore for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period are needed respectively. Table 28: Investment for sewerage network expansion.

Summary Total Cost per Class For Whole AP State (INR Crore) 2020-2022

2023-2029

City Size Class

2015-2019

Class IA

-

-

-

Class IB

643.41

195.48

848.68

Class IC

1,465.33

494.19

1,011.51

Class II

779.85

164.95

377.93

Class III

455.98

92.81

182.45

Class IV+

329.50

148.13

628.43

Total

3,674.08

1,095.56

3,049.01

► Infrastructure Investment: Drainage Based off population projections for the short- (2019), medium- (2022) and long-term (2029), drainage investment costs are determined for these three scenarios, with 67% service standard baseline in 2011. Drainage targets are estimated at 82%, 87% and 100% in 2019, 2022 and 2029 respectively for all the cities in AP, which have been categorized according to their city size class. The calculations reveal that incremental amount of drainage investments required. Table below illustrates an estimated of INR 3,163 crore, INR 1,470 crore and INR 12.638 crore for 2015 - 2019, 2020 - 2022 and 2023 2029 period are needed respectively. Table 29: Investment for drainage network expansion.

Summary Total Cost per Class For Whole AP State (INR Crore) City Size Class

2015-2019

2020-2022

2023-2029

Class IA

-

-

-

Class IB

523.00

237.02

3,834.04

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Urban Development Sector Paper – Draft for Discussion Class IC

1,847.82

830.66

5,442.51

Class II

253.69

67.25

751.91

Class III

122.29

53.78

475.37

Class IV+

416.39

281.62

2,134.30

Total

3,163.19

1,470.33

12,638.13

► Infrastructure Investment: Solid waste collection coverage Based off population projections for the short- (2019), medium- (2022) and long-term (2029), investment costs to expend solid waste collection service are determined for these three scenarios, with 87.1% service standard baseline in 2011. Drainage targets are estimated at 92.6%, 94.8% and 100% in 2019, 2022 and 2029 respectively for all the cities in AP, which have been categorized according to their city size class. The calculations reveal that incremental amount of drainage investments required. Table below illustrates an estimated of INR 144.05 crore, INR 78.85 crore and INR 218.23 crore for 2015 - 2019, 2020 - 2022 and 2023 2029 period are needed respectively. Table 30: Investment for the expansion of solid waste collection service.

Summary Total Cost per Class For Whole AP State (INR Crore) City Size Class

2015-2019

2020-2022

2023-2029

Class IA

-

-

-

Class IB

30.12

15.99

73.48

Class IC

81.46

46.77

96.18

Class II

16.75

7.04

16.23

Class III

7.47

3.05

6.02

Class IV+

8.26

5.99

26.33

Total

144.05

78.85

218.23

► Summary for Inclusive City initiatives: Table 31: Strategies, programs, in-charge institutions and investment costs for key themes – Inclusiveness

No .

Strategic initiatives

Programs

1

Slum alleviation

City Master Plan to integrate slum areas into the city

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In-charge Institution

Investment costs (INR crore) 2015-2019

2020-2022

2023-2029

Policy recommendation ULBs No Funding estimation

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Urban Development Sector Paper – Draft for Discussion

No .

Strategic initiatives

Programs

In-charge Institution

Investment costs (INR crore) 2015-2019

2020-2022

2023-2029

ULB/Metropolitan Urban Development Authorities to consolidate land for residential development including slum areas

Urban Development Authorities

Policy recommendation

Slum upgrading

ULBs

36,503.55

4

Smart Region Authority to improve service delivery in small towns and surrounding rural area

Smart Region Commission to oversee the formation of Smart Region Authorities in AP

Municipal Administrati on and Urban Development

No Funding estimation

5

PPP model in service delivery

Separation between regulatory bodies and service delivery enterprises

ULBs

6

Water supply coverage

ULBs

9,278.98

1,094.51

2,628.44

7

Water production

ULBs

602.02

238.07

580.41

Sewage network coverage

ULBs

3,674.08

1,095.56

3,049.01

9

Drainage

ULBs

3,163.19

1,470.33

12,638.13

10

Solid waste collection

ULBs

144.05

78.85

218.23

2

3

8

Investment into basic infrastructure

No Funding estimation

7,386.96

3,793.90

Policy recommendation No Funding estimation

10.1.3. Sustainable City There are three key initiatives for Sustainability theme: ► Disaster Management Plan: • Program Description: All municipalities, municipal corporations and Smart Region Authorities in coastal districts are required to have a Disaster Management and Evacuation Plan.

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Urban Development Sector Paper – Draft for Discussion AP Context - Revenue Disaster Management Department50: Under the Government of AP, this department serves four key functions: (i) monitoring seasonal conditions, (ii) preparation and updating of calamity contingency plans for natural disasters such as floods, (iii) dissemination of early earnings in case of threats of natural disasters, (iv) coordination of evacuation and rescue, relief and rehabilitation activities in natural disaster events. Case Study: Gujarat State Disaster Management Plan 201551 While AP’s Revenue Disaster Management Department is involved in good work, more could be done in terms of mitigation and also multi-scaled planning. A good example of state disaster planning is the Gujarat State Disaster Management Plan, which is produced and administered by the Gujarat State Disaster Management Authority. This plan includes the formulation of institutional mechanisms for disaster response – across the state, national, district and local level. Disaster prevention and mitigation strategies have also been drawn up. For example, a State Disaster Mitigation Fund has been created to fund disaster mitigation efforts, and disaster resistant construction techniques, codes and guidelines in all sectors of society, have been enforced by law through incentives and disincentives across the state. To actualize these strategies, specific disaster management measures have been implemented. This includes structural mitigation measures, such as capital investments on physical constructions, and non-structural measures, such as policies, education, training and capacity development. •

Investment costs: Based on Minister of Finance Annual Plan (2014-2015), a total amount of INR 2000 lakhs is provided to the Commissioner, disaster management for implementation of various schemes including construction of cyclone shelters, roads and bridges, saline embankments, etc. The funding is centrally assisted by state plan schemes for 13 districts comprises of 110 ULBs. For this program, the funding will be focused on 9 coastal districts including Srikakulam, Vizianagaram, Visakhapatnam, East Godavari, West Godavari, Khrisna, Guntur, Prakasam, and Nellore comprises of 72 ULBs. By using ratio comparison, an estimate total amount of INR 14 crore will be provided for this program.

► State-Level Coordination in Land Use and Environmental Protection: To encourage and create a legal framework for sustainable urban development at ULBs level, State government should implement two programs: a State-wise Land-use Plan and fiscal incentives for sustainable urban development. The former initiative will clearly identify fertile agricultural land and ecologically sensitive areas protected from urban development and give all cities a clear direction on land management. The latter on the other hand will provide incentives for cities to improve their quality of growth (i.e. density, air quality, transportation system, water quality, etc.). Case Study: Netherlands National Policy Strategy for Infrastructure and Spatial Planning 52

50

Revenue Disaster Management, Government of AP (n.d.) Functions of the Disaster Management setup in AP [http://disastermanagement.ap.gov.in/aboutus.aspx] 51 Gujarat State Disaster Management Authority (2015) State Disaster Management Plan – Volume I [http://www.gsdma.org/documents/Gujarat_State_Disaster_Management_Plan-2015_Volume-1.pdf] 52 Summary National Policy Strategy for Infrastructure and Spatial Planning (2013)

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Urban Development Sector Paper – Draft for Discussion With the aim of making the Netherlands competitive, accessible, livable and safe, the central government has developed this policy strategy as a robust regionalized approach to achieve this aim. This policy is legally safeguarded by two pieces of legislation based on the Spatial Planning Act that establishes legal frameworks for safeguarding spatial planning policy, while considering spatial planning interests and decision-making by the different tiers of the government. An example of the good national-level planning under this policy strategy sis the National Spatial Structure map. This illustrates in geographical terms the structural matters of national interests for which the central government is responsible for. This map demarcates areas and structures which are of national interests in view of the central government’s goals concerning competitiveness, accessibility, livability and safety. For example, to achieve accessibility, this map illustrates existing rail, sea ports, waterway networks and roads. This thus provides a visual reference and direction for the development of a coherent national spatial structure. 

Investment costs: Funding required for a State Land Use Master Plan can be similar to one estimated for Comprehensive Metropolitan Master Plan proposed under Productive City theme.

► Innovative Solutions for Solid Waste Management: Municipal solid waste treatment receives high concern from the state management. The total municipal solid waste generated in the state of AP is 7,033 tons per day. However, the total amount of municipal solid waste treated (by composting /semicomposting) is only 7% of the total waste generated. There are very minimal waste treatment facilities are available in AP. There are two programs are proposed to address this program: Green Exchange and Wasteto-Energy ► Program Description: Green Exchange program allows people to exchange separated trashes for food and/or other social benefits such as bus tickets, school notebooks and even toys. The program, which was first successfully initiated in Curitiba (Brazil), brought about multiple social, economic and environmental benefits: extra food provision for urban poor, highly efficient trash collection system, reduction of trash going into landfills, more supply of recyclable and combustible materials to manufacturing and energy sector and lastly offering a support to local farming as well. In Curitiba, the ‘exchange rate’ is set as follow: one 1 kg of fruits and vegetables for every 4 kg of recycling garbage or 2 liters of used oil delivered. Case Study: Clean e-India Initiative Launched by NASA’s recognized technology innovator and India’s largest electronic asset management company, Attero, this initiative helps to ensure organized collection, management and recycling of electronic waste in a responsible and sustainable manner. For example, the initiative is working on integrating the informal sector into the organized supply chain in collecting e-Waste, while also setting up a widespread consumer e-waste collection network. In this process, consumers will be incentivized for being a part of this initiative and disposing their e-Waste. ► Investment costs: As a lesson learned from Curitiba case, Green Exchange program doesn’t require any significant funding. In fact, the city can use designated budget for land fill, trash collection system and even food subsided scheme for the poor as well as income from selling recyclable and combustible waste to purchase food and other socially beneficial merchandizes for this program. ► Program Description: Waste-to-Energy (WTE) is a program to help ULBs and regional governments (i.e. Metropolitan Development Authority, Smart Region Authority) build their WTE facilities in order to reduce the amount of trash going into landfills and at the same time meet growing energy demand.

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Urban Development Sector Paper – Draft for Discussion Case Study: Solid Waste Management Project in Mamallapuram Town, Tamil Nadu 53 With the aim of the charitable trust Hand in Hand, this project seeks to achieve sustainable development through environmentally friendly technologies and practices. Specifically, this is achieved through the reduction of solid waste and harnessing the potential of waste to be converted to energy. This is especially pertinent to Mamallapuram Town, which experiences high volumes of international and domestic tourism, being a UNESCO World Heritage Site and home to numerous magnificent temples and historic monuments from the 7 th and 9th centuries. These tourists contributed much environment harm to the town, particularly contributing to solid waste generation. On 10th February 2011, this project initiated a ban on disposable plastics in the town. Also, a 1000 cubic meter bio-methanation plant with the capacity to handle 500-800 kilograms of food waste daily was set up to facilitate an efficient management of bio-degradable waste – notably from the hotels and tourism businesses. This bio-methanation plant converts food waste into methane, which is then converted to electricity. This project shows the possibilities and benefits of such innovative ways of management solid waste to produce a useful alternative output. ► Investment costs: Waste-to-Energy (WTE) is not a new concept in AP. The first WTE facility, Yuvaraj Power Project, was already built near Rajahmundry (East Godavari) at the cost of approximately INR 100 crore to produce 13 MW. According to a Ministry of New and Renewable Energy’s estimate in 2011, the pew-bifurcation state of AP has a potential to produce up to 123 MW from both sewerage and solid waste. Assuming that WTE capacity at the state level proportion with population size, the new state of AP with 49 million population thus has a WTE capacity of 71 MW. To achieve 100% waste-toenergy potential in 2029, investment into WTE facilities will be 180 INR crore during 2015-2019 period, 135 INR crore during 2020-2022 period and 314 INR crore during 2023-2029 period. Table 32: Investment for waste-to-energy facilities.

Investment period

2011

2015-2019

2020-2022

2023-2029

49,097,398

52,203,188

53,558,279

56,449,581

WTE potential (MW)

71

75

82

95

Investment (INR crore)

100

180

135

314

Energy produced (MW)

13

36

54

95

18%

48%

65%

100%

Population

Potential capture

► Infrastructure Investment: Sewerage Treatment Based off population projections for the short- (2019), medium- (2022) and long-term (2029), sewerage treatment investment costs are determined for these three scenarios, with 21.4% service standard baseline in 2015. Sewerage Treatment targets are estimated at 41%, 61% and 100% for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period respectively for all the cities in AP, which have been categorized according to their city size class. The sewerage treatment PCIC for the different city classes are used to determine the investment costs required for sewerage treatment infrastructure costs.

53

Civil Indian Standard (IS) Codes (2014) Biogas Project at Mamallapuram

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Urban Development Sector Paper – Draft for Discussion The calculations reveal the incremental amount of sewerage treatment investments required. Table below illustrates an estimated total of INR 549.27 crore, INR 630.33 crore and INR 3,175.52 crore for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period are needed respectively. Table 33: Investment for the improvement of sewerage treatment

Summary Total Cost per Class For Whole AP State (INR Crore) City Size Class

2015-2019

2020-2022

2023-2029

Class IA

-

-

-

Class IB

97.78

113.27

965.33

Class IC

252.11

312.95

1,147.42

Class II

96.98

83.01

382.64

Class III

46.32

42.17

183.58

Class IV+

56.08

78.94

496.55

Total

549.27

630.33

3,175.52

► Infrastructure Investment: Solid Waste Treatment & Disposal Based off population projections for the short- (2019), medium- (2022) and long-term (2029), the investment costs for solid waste collection are determined for these three scenarios. Projections of total solid waste generated are calculated according to service standards of average per capita waste generation by city class 54, annual growth rate of 1.3% per annum as reflected in existing literature, and a 7% average total waste generation in the baseline year 2011. A 7% average total waste generation in the baseline year 2011 is used, while targets for solid waste management for the three scenarios of 50%, 67% and 100% treatment is used for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period respectively. Thus, the estimated total solid waste management investment costs amount to INR 277 crore in 2015 - 2019 period, INR 151 crore in 2020 - 2022 period, and INR 420 crore in 2023 - 2029 period, as illustrated in the table below. Table 34: Investment for the improvement of solid waste treatment

Summary Total Cost per Class For Whole AP State (INR Crore) City Size Class

2015-2019

2020-2022

2023-2029

Class IA

-

-

-

Class IB

58.22

30.90

142.05

Class IC

157.10

90.20

185.49

Class II

32.05

13.48

31.05

Class III

14.30

5.85

11.52

Class IV+

15.81

11.47

50.41

Total

277.47

151.90

420.52

► Infrastructure Investment: Urban Transit and Traffic Support Systems

54

India Infrastructure Report 2006

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Urban Development Sector Paper – Draft for Discussion Mass transit systems will be built in all Class-I cities. Rail-based and road-based mass rapid transit systems (MRTS) such as Bus Rapid Transit (BRT) will be developed for Class-IB cities. Bus services will be provided to Class-IC cities. In addition, GoAP will also develop supporting traffic infrastructure including: 1/ Intelligent Transport Systems and Area Traffic Control (ITS & ATC), 2/ Vehicular and Pedestrian Underpasses, 3/ Parking systems, 4/ Terminals and 5/ Bus Depots in for all cities and towns. Since there is no baseline data available for AP cities, national service backlog and target standards studied by High Powered Expert Committee will be applied to estimate AP’s investment required for urban transit and traffic support systems. Table 35: Investment costs per capita for transit and traffic support infrastructure. Source: HPEC (2011)

City Size Class

Rail-based MRTS

Road-based MRTS

Traffic Support Infrastructure

Total investment per capita (INR crore)

Class IA

18,000

4,200

356

22,556

Class IB

7,200

2,880

356

10,436

2,880

445

3,325

Class II

284

284

Class III

378

378

Class IV+

378

378

Class IC

Table 36: Investment for urban transit and traffic supporting systems.

Summary Total Cost per Class For Whole AP State (INR Crore) City Size Class

2015-2019

2020-2022

2023-2029

Class IA

-

-

-

Class IB

1,614.58

1,203.71

4,333.37

Class IC

1,305.47

1,028.65

1,800.11

Class II

41.95

29.09

48.11

Class III

24.16

16.05

28.86

Class IV+

36.30

32.45

105.57

Total

3,022

2,310

6,210

► Summary of Sustainable City initiatives: Table 37: Strategies, programs, in-charge institutions and investment costs for key themes – Sustainability

No.

Strategic initiatives

Programs

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In-charge Institution

Investment costs (INR crore) 2015-2019

2020-2022

2023-2029

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No.

1

2

3

Strategic initiatives

Programs

Disaster management plan

All municipalities, municipal corporations and Smart Region Authorities are required to have disaster management and evacuation plan

State Land-use Plan

State-level coordination in land use and environmental protection

In-charge Institution

Investment costs (INR crore) 2015-2019

2020-2022

2023-2029

ULBs and Smart Region Authorities

14

14

14

AP State Development Planning Society

18.3 to 26.7

18.3 to 26.7

18.3 to 26.7

Fiscal incentives for city performance in sustainable development

Policy recommendation No funding estimation

Green Exchange – Food for Waste recycle and separation

ULBs

No significant funding required

Waste-to-Energy

Commissioner and Director of Municipal Administration

180

135

314

Sewage treatment

ULBs

549.27

630.34

3,175.52

7

Solid waste treatment

ULBs

277.47

151.90

420.52

8

Public Transport & Supporting Systems

Urban Development Authorities & Smart Regions

3,022

2,310

6,210

4

5

6

Improvement of urban environment and reduction of urban impacts on natural environment

10.1.4. Smart City ► Smart City Program: ► Program Description: As the central government is going to allocate a large amount of funding to cities through Smart City Challenge grants, a Smart City program is proposed at the State level to develop a development framework, to train and to provide technological advisory to all cities in AP which aim to get the central government grants for city building and then become Smart City in the near future. Ernst & Young LLP | CPG Consultants

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Urban Development Sector Paper – Draft for Discussion ► Investment costs Smart City Development Program aim to create Smart City development framework for AP cities. The development framework will be used by every AP cities in preparation for Smart City Challenge. Benchmarking on Singapore Housing Development Board (HDB) experience in developing a Smart City Program, an estimate of INR 9.5 crore (20 lakh SGD) will be provided for this program. The funding will be covering a comprehensive consultancy services for Smart City, including Master Planning, Information and Communication Technology (ICT) adoption, Business Model Development, and Key Performance Indicator (KPI) review. ► Integrated GIS-based Data Hub: ► Program Description: The next step to create Smart Cities in AP and to resolve many urban management issues such as dated property tax collection coverage is building integrated GIS-based Data Hub for each ULB. The GIS-based Data Hub is aimed to be each ULB’s one-stop data center which collect, store, manage and analyze spatial data to inform decision making (urban planning, emergency and evacuation planning, etc.) and support all service delivery tasks (water supply, traffic management, property tax collection) in that ULB. This Data Hub will help AP cities to keep their property tax systems up-to-date and their service charges more reflective of users’ demand and thus ensure financial health of these cities. ► Investment costs: Since at least 76 ULBs in AP are conducting GIS mapping under a World Bankfunded project, it would make sense for Data Hub program to focus resources on building the hub physical infrastructure component of the project, rather than data collection. To arrive with a funding estimation, one can benchmark 6-million-dollar Smart Hub project by Singapore’s Housing Development Board (HDB). Since this Smart Hub project is aimed to serve a city with 5 million population, one can estimate that the price tag of a similar project in AP context could be 37 crore. To reduce the cost for all ULBs to build their own Data Hub, the state would create a prototype which is scalable and customizable to meet the needs of each ULB before transferring the knowledge to ULBs to build their own. Table 38: Investment for municipal GIS-based data hubs

Period

2015-2019

2020-2022

2023-2029

AP urban population Data Hub Investment (INR crore) Percentage of urban population served

20,233,453 37 36%

22,023,831 28 58%

25,403,693 64 100%

► Infrastructure Investment: Smart Cities It is announced by AP Chief Minister N. Chandrababu Naidu that the state aims to develop 14 smart cities. These cities are namely Visakhapatnam, Kakinada, Tirupathi, Vijayawada, Rajahmundry, Srikakulam, Vizianagaram, Guntur, Nellore, Ongole, Anantapur, Kurnool, Kadapa and Eluru. Therefore, based off population projections for the short- (2019), medium- (2022) and long-term (2029) of the abovementioned prospective smart cities, investment costs of smart cities are calculated for these three scenarios. The investment costs are calculated by taking the national government budget for smart cities developments 55 against the total population in smart cities56 to determine an estimated average smart city investment cost per capita. This average smart city investment cost per capita will then be the basis to determine AP smart cities total investment costs according to the respective population projections. An estimated total smart cities investment cost of INR 1,470.53 crore in 2015 - 2019 period, INR 1512.17 crore in 2020 - 2022 period and INR 2015.29 crores in 2029 is needed to achieved the targeted number of smart cities as illustrated in the table below.

55

TheHindu.com

56

Smart Cities Council India (2015)

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Urban Development Sector Paper – Draft for Discussion Table 39: Investment for Smart Cities

Summary Total Costs for Smart Cities (INR Crore) 2015-2019

2020-2022

2023-2029

No. of Cities

3

6

14

Total Smart Cities Population (cumulative)

3,406,084

7,218,125

12,414,984

Total

1,470.53

1512.17

2015.29

► Infrastructure Investment: Mee-seva Centers By 2029, it is to target that the state aims to develop 3,465 Mee-Seva centers. Hence, the investment costs of Mee-Seva centers are calculated for these three scenarios which are for the short(2019), medium- (2022) and long-term (2029). The investment costs are calculated by taking the tentative financial budget under 20 non-negotiable indicator of Smart Village/Smart Ward to determine an estimated average Mee-seva investment cost per unit. An estimated total Mee-Seva centers investment cost of INR 5.00 crore in 2015 - 2019 period, INR 8.21 crore in 2020 - 2022 period and INR 13.22 crores in 2029 is needed to achieved the targeted number of smart cities as illustrated in the table below. Table 40: Investment for Mee-seva centers

Summary Total Costs for Mee-seva Centers INR (INR Crore) Total number of Mee-seva Centers 2015-2019

2020-2022

2023-2029

Unit Cost (INR crore)

1,322

2,143

3,465

100,000

Total Cost (INR Crore) 2015-2019

2020-2022

2023-2029

5.00

8.21

13.22

► Summary of Smart City initiatives Table 41: Strategies, programs, and in-charge institution for key themes - Smart

No.

1

2

Strategic initiatives Integrated information centers for better government service and decision making

Programs

GIS-based planning and urban management system with property tax component Mee-seva center in every ward

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In-charge Institution Municipal Administration and Urban Development

Funding estimated (INR crore) 2015-2019

2020-2022

2023-2029

37

28

64

5.00

8.21

13.22

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No.

Strategic initiatives

3 Smart City initiative 4

Programs

In-charge Institution

Funding estimated (INR crore) 2015-2019

Smart City Development Planning Program to prepare AP cities for Smart City Challenge

Commissioner and Director of Municipal Administration

9.5

Smart City Infrastructure Investment

Municipal Administration and Urban Development

1,470.53

2020-2022

2023-2029

1512.17

2015.29

10.1.5. Well-Governed City ► Strengthening ULBs: • Implementation of 74th CAA: State government has to take the leadership in implementing the 74th Constitution Amendment Act which set the legal condition for the devolution of power to ULBs. Implementation of 74th CAA will also help ULBs to meet pre-requisites to receive more central government funding. • Formula-based tax transferring to ULBs: Tax transferring between the State and ULBs should be formula-based to create a more reliable and predictable revenue supply to local government. Other adhoc funding should be in grant format which will be rewarded to ULBs based on either their special needs or performance. • Service-delivery parastatals to be accountable to ULBs and regional governments: many service delivery tasks are local in nature and therefore should be accountable to local governments and their citizens. The State government should transfer management power and ownership of service-delivery parastatals to regional authorities such as Metropolitan Development Authority and Smart Region Authority or to ULBs depending on the jurisdiction definition of regional governments and ULBs. • Urban Management Institute: GoAP will set up to train both existing governmental officers and students of public administration. A budget from 50 to 100 crore will be reserved for the establishment of this institute. ► Reform of ULBs revenue generation system: The major measure to increase revenue generation for ULBs is updating of service charges and property tax collection to reflect operational and maintenance costs as well as economic condition. A GIS-based property tax collection system was already proposed as part of Integrated Data Hub. • Municipal Services Regulatory Commission: Due to political pressure and the lack of management capacity at ULB level, service charges are usually obsolete and below the rates that can sustain operational and maintenance of those service delivery infrastructures. To resolve this, a State commission is proposed to help ULBs updating their charges and assist State government in developing subsidized schemes for urban poor who cannot afford the market rates of services. The funding estimation for this State commission is proposed to be similar to Smart Region Commission. ► Consolidation of land inventory to employ PPP model in service deliver: • Program Description: Land monetizing is a key funding alternative for many cities around the globe. However, to employ this funding model, the city must have good control over land. Metropolitan/Urban Development Authorities are recommended to strengthen financially and technically to have a full control of land development process from planning in which land value is assigned, to land consolidating to form larger parcels for large-scale developments, to land sale in which government’s investments into planning and infrastructure are recovered. Ernst & Young LLP | CPG Consultants

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Urban Development Sector Paper – Draft for Discussion •

Summary of Well-governed City initiatives

Table 42: Strategies, programs, and in-charge institution for key themes – Well-Governed

Investment costs (INR crore) No.

Strategic initiatives

Programs

In-charge Institution 2015-2019

2020-2022

1

Implementation of 74th CAA

Policy recommendation

2

Formula-based taxtransferring to ULBs

Policy recommendation

3

Strengthening ULBs

Service-delivery parastatals to be accountable to ULBs

Municipal Administration and Urban Development

2023-2029

Policy recommendation

4

Urban Management Institute to training existing and new staffs for ULBs

5

Municipal Services Regulatory Commission to help ULBs updating service charges for water supply, sewerage and solid waste management on full Operation & Maintenance cost recovery basis

Municipal Administration and Urban Development

5.65

GIS-based planning and urban management system with property tax component

Municipal Administration and Urban Development

already included under Smart City initiative

Urban Development Authorities to take charge of planning, land management/consolid ation and land sale -> land monetizing

Urban Development Authorities

Policy recommendation

Reforms of revenue generation systems

6

Consolidating land inventory to employ PPP model

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1,670

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Urban Development Sector Paper – Draft for Discussion

10.2. Critical Vision Projects The foundation for an acomplishment of GoAP’s vision for AP cities lays on three pillars:  Economic pillar: A fast growing economy which provide economic justification and financial support for urban developoment;  Social pillar: An inclusive society which offer opportunities to low-income and minority groups to fully participate in the economy and secure their own livelihood;  And Governance pillar: accountable and capable ULBs to ensure quality service delivery to their residents. A successful build-up of these three pillars will provide AP cities with financial, human and institutional resources to realize their SwarnAndhra 2029 development objectives. Table 43: List of critical vision projects

S/No

Vision theme

1.1

1.2

Implementation programs

Comprehensive Metropolitan Master Plan for Growth-pole Regions (i.e. Visakhapatnam, Capital and Chittor Regions)

Economic pillar: To guide the development of Growth-pole Regions in the most coordinated, sustainable and efficient manner

Market positioning and Feasibility studies for Industry Node cities

Economic pillar: To set pragmatic development directions for Industry Node cities

Skill training program with focus in Growth-Pole Regions & Industry Node Cities

Economic & Social pillars: to prepare a skilled labour force for the industrialization of AP and increase job security for lowincome and minority groups

Productive City 1.3

Improve and Expand Urban Road Networks with focus in Growth-Pole Regions and Industry Node Cities

1.4

Integration of slum areas into the larger urban framework through City Master Plans and infrastructure connection Slum upgrading schemes through government investment, PPP and community-based self-build programs

2.1

2.2 2.3

Inclusive City

Remarks

Expanding municipal water supply networks

2.4

Expanding municipal sewerage networks

2.5

Expanding municipal drainage networks

2.6

Expanding municipal solid waste collection coverage

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Economic pillar: to increase the accessibility of AP businesses to markets and resources

Economic & Social pillars: To ensure equal opportunity for all urban residents in term of access to urban services and amenities which, in turn, help to push up their productivity

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3.1

Sustainable City

Investment into transit system in Class I cities

Expanding the coverage of Mee-seva centers

4.1 Smart City

4.2

5.1

5.2 5.3

Wellgoverned City

Economic & Social pillar: to increase the accessibility of urban residents, particularly low-income and minority groups, to job opportunities and urban amenities

Social & Governance pillars: to increase the accessibility of urban residents to government’s information and services

GIS-based Data Hubs for AP cities to strengthen ULBs’ decision-making capabilities and property tax collection system

Governance pillar: to improve the quality of decision making and secure property tax revenue for ULBs

Implementation of 74th CAA to transfer service delivery responsibilities to ULBs

Governance pillar: to improve ULB’s accountability and responsibility to their residents

Formular-based transfer of tax revenue to ULBs Establish Urban Management Institute

Governance pillar: to strength ULBs in term of financial resource and management capability

10.3. Prioritized programs for the first 3 years During the first 3-year period (2016-2018), investment into urban development should focus on three Growthpole Regions to strengthen economic agglomerations, increase competitiveness of these regions and thus support Double-digit Growth target of GoAP. In addition, strengthen ULB’s governance capabilities is also an GoAP’s priority in the first 3 years to prepare city governments before taking more responsibilities. Prioritized programs for the first 3-year period are listed in the table below. Table 44: Prioritized programs for the first 3-year period

S/No

Vision theme

Comprehensive Metropolitan Master Plan for Growth-pole Regions

1.1 1.2

Implementation programs

(i.e. Visakhapatnam, Capital and Chittor Regions) Productive City

1.3 Ernst & Young LLP | CPG Consultants

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Urban Development Sector Paper â&#x20AC;&#x201C; Draft for Discussion Improve and Expand Urban Road Networks with focus in Growth-Pole

1.4

2.1

Regions

Inclusive City

Slum upgrading with focus on Growth-Pole Regions

2.2

Expanding water supply network with focus on Growth-Pole Regions

2.3

Expanding Sewerage network with focus on Growth-Pole Regions Expanding Solid waste collection coverage with focus on Growth-Pole

2.4

3.1

Regions

Sustainable City

Investment into Waste-to-Energy facilities

3.2

Investment into transit system in Class I cities with focus on Growth-

3.3

4.1

Pole Regions

Smart City

Investment into identified 3 smart cities Expanding the coverage of Mee-seva centers

4.2

GIS-based Data Hubs for AP cities to strengthen ULBsâ&#x20AC;&#x2122; decision-

4.3

5.1

State Land-use Plan

making capabilities and property tax collection system

Well-governed City

Establish Urban Management Institute Establish Municipal Services Regulatory Commission

5.2

10.4. Summary of investment costs Table 45: Summary of investment costs

Investment Vision theme

Productive City

Program/Infrastructure investment Comprehensive Metropolitan Master Plan for Growth-pole regions Market positioning and Feasibility studies for Industrial Node cities

Ernst & Young LLP | CPG Consultants

2015-2019

2020-2022

2023-2029

54.9 to 80.1

54.9 to 80.1

54.9 to 80.1

9.5

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Urban Development Sector Paper â&#x20AC;&#x201C; Draft for Discussion Job training programs with focus in growth-pole regions and Industrial Node cities Improve and Expand Urban Road Networks

Inclusive City

21,208

16,116

36,379

7,386.96

3,793.90

Water supply coverage

9,278.98

1,094.51

2,628.44

Water production

602.02

238.07

580.41

Sewage network

3,674.08

1,095.56

3,049.01

Drainage

3,163.19

1,470.33

12,638.13

144.05

78.85

218.23

14

14

14

18.3 to 26.7

18.3 to 26.7

18.3 to 26.7

Waste-to-Energy

180

135

314

Sewage treatment

549.27

630.34

3,175.52

Solid waste treatment Public Transport & Supporting Systems

277.47

151.9

420.52

3,022

2,310

6,210

37

28

64

5

8.21

13.22

1512.17

2015.29

State Land-use Plan

Well-governed City

11,601

36,503.55

Disaster management plan

Smart City

9,152

Slum upgrading

Solid waste collection

Sustainable City

3,766

GIS-based planning and urban management system Mee-seva center in every ward Smart City Development Planning Program Smart City Infrastructure Investment Urban Management Institute Municipal Services Regulatory Commission

9.5 1,470.53 50 to 100 5.65

Sub-Total

52,300

44,200

112,500

Average annual investment

13,057

14,733

16,071

Total

208,900

In summary, it is required an investment of INR 52,300 crore for 2015-2019 period, INR 44,200 crore for 20202022 and INR 112,500 for 2023-2029 period to transform AP urban areas into productive, inclusive, sustainable, smart and well-governed cities by 2029. The average investment per annum will be INR 13,057 crore, lowest during the first period. The average annual investment increases to INR 14,733 crore during the second period and to 16,071 during the last period. This increment in annual investment overtime is necessary to support the increase in economic and population size of AP cities. The largest component of investment will be urban road improvement and expansion which accounts for over 35.3% of the entire investment. This investment aims to make AP cities more efficient as marketplaces. Public transport and traffic supporting systems also receive a significant amount of 5.5%. The second largest investment goes into slum upgrading which is a major development challenge in AP cities. The third largest investment goes into skill development which is critical to improve the productivity of the cities as well as to give urban Ernst & Young LLP | CPG Consultants

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Urban Development Sector Paper â&#x20AC;&#x201C; Draft for Discussion residents, particularly the poor and rural migrants, better opportunities to be employed in fast growing industries. Lastly, water-related infrastructure will be APâ&#x20AC;&#x2122;s focus with 21% of the total investment go into water supply, waste water and drainage systems to ensure access to clean water for every family, protection and sustainable management of water sources. In summary, GoAP recognizes the upmost importance of making AP cities economically vibrant and socially sustainable. Almost 90% of investment into urban sector in AP will be channeled into these two development goals (Figure 62). Solid waste management/ Waste to Energy 1%

Policy/Institution set-up 0.22% Drainage 8.28%

Wastewater system 5.83%

Skill training 11.75%

Smart City Development 2.39%

Water supply system 6.91%

Slum upgrading 22.85%

Urban road improvement & expansion 35.32%

Public Transport & Supporting Systems 5.53% Figure 61: Composition of urban sector investment during 2015-2029 period.

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Urban Development Sector Paper – Draft for Discussion

Figure 62: Investment for each vision theme.

10.5. Critical Vision Challenges Some of the key critical vision challenges identified are namely Ecosystem challenges, Financial challenges, Governance challenges and Institutional Structure challenges. ► Ecosystem Challenges: Massive upgrading and expanding of urban infrastructure will require an efficient construction industry, a large labour pool for this industry, a significant provision of construction materials as well as a mature private sector in service delivery services. ► Financial Challenges: an investment of 209,000 INR crore (USD 31 billion) is required for urban sector in the next 14 years. In the first phase of development, AP cities will need an investment of 13,075 INR crore (USD 2.0 billion) per annum in average (2010 prices). This is equivalent to 2.5% of GSDP (2015) and 1.5 times of 2015-2016 state capital expenditure. Central support and private capital will be required to meet the need of urban upgrading and expanding. ► Governance Challenges: Capability of ULBs to plan, implement and manage urban infrastructure and service delivery is still limited. There is also a lack of data at ULB level to assess and monitor cities’ performance. ► Institutional Structure Challenges: Many municipal services are still provided by state corporations and parastatals instead of ULBs. This compromise ULBs’ effectiveness and accountability in urban management.

10.6. Financing mechanism The mechanism for financing urban development investments will be discussed and addressed in Public Finance Sector Paper

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Urban Development Sector Paper â&#x20AC;&#x201C; Draft for Discussion

Annexure

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Urban Development Sector Paper â&#x20AC;&#x201C; Draft for Discussion

11. Annexure I: Urban Population Projection Methodology With 2011 serving as the base year, urban population projections for three scenarios namely the short- (2019), medium- (2022) and long-term (2029), are determined based on population data from census 2001 and 2011. For the purpose of the Urban Sector paper, urban population data classified according to the concept of urban agglomeration is used to arrive at the forecasts. The urban population for the future new capital city, Amaravati, is also accounted for in the urban population projections. The projected urban population of Amaravati is calculated by matching the targeted urban population of Amaravati new capital city 57 as stated in the city masterplan report, from which the annual growth rates to project for 2019, 2022 and 2029 were determined. Classification of city class size The High Powered Expert Committee (HPEC), set up by the Ministry of Urban Development in May 2008, has reclassified the Census city size classes58. This reclassified city size classes will be the basis of the urban population and infrastructure investment costs projections. Details of city classes by population sizes are as shown in the following table. Census Classes

Reclassified* Classes Class IA

> 5 million

>100,000

Class IB

1 - 5 million

Class II Class III Class IV

50,000 - 100,000 20,000 - 50,000

Class IC Class II Class III

100,000 - 1 million 50,000 - 100,000 20,000 - 50,000

Class V

<200,000

Class IV+

<20,000

Class I

Class VI * The Committee has reclassified the Census classes District-wise urban population projection District-wise urban population are projected by using a cohort-component model with 5 years age groups interval per cohort while taking into account components such as mortality, death, fertility and net migration rates. Some key assumptions are made in the urban population projections. Mortality Rates are reduced by 0.104704 for the periods 2011-2015 and 2016-2020, and 0.084746 for the periods 2021-2026 and 2026-2030. Death rates are reduced by 0.021802 and 0.016598 for 2016-2021 and 2021-2031 respectively. Fertility rates are also considered to reduce by 0.043478 for 2016-2021 and by 0.090909 for 2021-2031. Migration rates of 0.03%, 0.25%, 1% from 2015-2031 is accounted as well to capture possible fluctuations of inter and intra state migrations. It is assumed that district wise-urban population projections are for the 110 (excluding Amaravati) officially recognized ULBs (ULBs) by the government. Cities and sub-districts urban population projection Due to incomplete listings of cities and towns within the sub-district level for each of the 13 districts, population projections were performed at best on available urban agglomerations data and information. The urban population projections of cities and sub-districts are based on the historical growth rates by comparing urban

57

Amaravati City Masterplan Report

58

The High Powered Expert Committee, 2011. Report of Indian Urban Infrastructure and Services. (Government of India, New Delhi). Ernst & Young LLP | CPG Consultants

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Urban Development Sector Paper – Draft for Discussion population census data provided by Ministry of Home Affairs, Government of India for 2001 and 2011. The discrete base formula used in the projection model is as demonstrated in the following expression: Pt = P0 (1 + r) t, where p0 = current population, pt = population after time t, r = growth rate For cities with urban population of above 50,000 in 2011, each of their respective historical growth rates are used to project their urban populations in 2019, 2022 and 2029. As for cities with urban population of 20,000 to 50,000 (Class III), and, below 20,000 (Class IV+) in 2011, the average historical growth rates of cities in Class III and Class IV+ are used respectively to project their urban populations in 2019, 2022 and 2029 instead. Chittoor District is an exception whereby the average historical growth rates of cities in similar city class sizes are used to project their urban populations in 2019, 2022 and 2029 instead. Hence, the projected urban populations are determined based on two approaches as shown from the following equations: 1.

For cities with urban population of above 50,000 in Year 2011: 10

Historical Growth Rate = √

Population in Year 2011 −1 Population in Year 2001

Urban Population Based On Historical Growth Rate = Population in Year 2011 ∗ (1 + Historical growth rate)(Projected Year – Year 2011) 2.

For cities with urban population of 20,000 to 50,000, and, below 20,000 in Year 2011 10

Average Historical Growth Rate = √

Sum of Population in the same city class size for Year 2011 −1 Sum of Population in the same city class size for Year 2001

Urban Population Based On Average Historical Growth Rate = Population in Year 2011 ∗ (1 + Average Historical growth rate)(Projected Year – Year 2011)

Adjustment Factors As aforementioned, district wise-urban population projections consisted primarily on the 110 officially recognized ULBs (ULBs) by the government, excluding significant urban agglomerations. Hence, the projected urban populations for the ULBs based on historical or average historical growth rates are proportionately adjusted to match up with the district-wise population projections. In essence, the projected district-wise urban population are disaggregated into respective ULBs cities proportionately based on historical or average historical growth rates to determine the respective cities urban populations and cities’ size. The adjusted growth rates and urban populations of the respective ULBs cities are therefore derived after accounting for the abovementioned assumptions and adjustment factors using the following equations:

For ULBs: Adjusted Projected Urban Population =(

District − wise urban population ) Urban Population based on historical or average historical growth rate ∗ Base Year urban population for the particular ULB

Adjusted Growth rate = (

(Projected Year – Base Year)

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Adjusted Population per ULB Projected Year )−1 Historical urban population Base Year

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Lastly, the cities and urban agglomerations in AP are classified into different city size class depending on their urban population for 2019, 2022 and 2029 accordingly as shown in the following tables. Summary Total Number of Size Class Cities for All Districts in AP City Size Class

2011

2019

2022

2029

Class IA

-

-

-

-

Class IB

2

2

2

6

Class IC

30

37

44

44

Class II

40

53

50

51

Class III

76

56

52

45

-

-

2

148

148

148

Class IV+* Total

148

*excluding for others unincorporated urbanized areas in total number of size class cities in class IV+

Summary Total Urban Population per Size Class for All Districts in AP City Size Class

2011

2019

2022

2029

Class IA

-

-

-

-

Class IB

3,057,728

4,055,461

4,456,382

8,996,598

Class IC

6,734,656

10,418,974

12,232,519

11,077,242

Class II

2,581,508

3,833,296

3,527,382

3,633,230

Class III

2,524,343

1,925,722

1,807,548

1,658,211

Class IV+*

-

-

-

38,413

Total

14,898,235

20,233,453

22,023,831

25,403,693

*excluding for others unincorporated urbanized areas in total number of size class cities in class IV+

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Urban Development Sector Paper â&#x20AC;&#x201C; Draft for Discussion

Summary Total Urban Population per Size Class for All Districts in AP City Size Class

2011

2019

2022

2029

Class IA

-

-

-

-

Class IB

3,057,728

4,055,461

4,456,382

8,996,598

Class IC

6,734,656

10,418,974

12,232,519

11,077,242

Class II

2,581,508

3,833,296

3,527,382

3,633,230

Class III

2,524,343

1,925,722

1,807,548

1,658,211

Class IV+*

1,287,074

2,128,268

2,636,494

4,627,659

Total

16,185,309

22,361,721

24,660,326

29,992,939

*Including others unincorporated urbanized areas in total urban population per size class in class IV+

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12. Annexure II: Infrastructure investment calculation 12.1. Investment in Water Supply Based off population projections for the short- (2019), medium- (2022) and long-term (2029), water supply investment costs are determined for these three scenarios, with 88.8% service standard baseline in year 2011 Water supply targets are estimated at 93.8%, 95.6% and 100% in 2019, 2022 and 2029 respectively for all the cities in AP, which have been categorized according to their city size class. The water supply PCIC distribution extension and upgrading of water supply for the different city classes are used to determine the investment costs required for water supply infrastructure. With respect to 2011 baseline year service standards, the incremental targeted population difference between 2011-2019, 2019- 2022, and 2022- 2029, are multiplied to the water supply PCIC Distribution extension value based on their respective city class, to determine the incremental investment costs for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period. For 2011 – 2019, an addition of the urban population in 2011 multiplied by upgrading costs respective city class is included to account for an improvement of the current system to a 24/7 service level. PCIC Distribution extension Class IA Class IB Class IC Class II Class III Class IV+

2,030 2,914 4,520 3,600 4,619 4,619

Upgrading 1,831 2,679 3,855 3,200 6,755 6,755

In summary, the incremental water production investment costs are determined based on the following equation: Year 2011 to 2019: Incremental investment costs = (((Urban Population 2019 x Target 2019) – (Urban Population 2011 x Target 2011)) x PCIC Distribution extension of respective city class) + (Urban Population 2011 x Upgrading costs of respective city class) Year 2020 to 2022: Incremental investment costs = (((Urban Population 2022 x Target 2022) – (Urban Population 2019 x Target 2019)) x PCIC Distribution extension of respective city class Year 2023 to 2029: Incremental investment costs = (((Urban Population 2029 x Target 2029) – (Urban Population 2022 x Target 2022)) x PCIC Distribution extension of respective city class The calculations reveal that incremental amount of water supply investments costs. The table below illustrates an estimated total of INR 9,278 crore, INR 1,094 crore for and INR 2,628 crore for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period needed respectively.

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Urban Development Sector Paper â&#x20AC;&#x201C; Draft for Discussion Summary Total Cost per Class For Whole AP State (INR Crore) City Size Class

2019

2022

2029

Class IA

-

-

-

Class IB

1,136.17

133.80

451.05

Class IC

4,194.75

589.18

1,009.17

Class II

1,359.99

79.82

155.43

Class III

1,324.69

48.83

63.58

Class IV+

1,263.38

242.88

949.21

Total

9,278.98

1,094.51

2,628.44

12.2. Investment in Water Production Based off population projections for the short- (2019), medium- (2022) and long-term (2029), water production investment costs are determined for these three scenarios, with 88.8% service standard baseline in year 2011. Water production targets are estimated at 93.8%, 95.6% and 100% in 2019, 2022 and 2029 respectively for all the cities in AP, which have been categorized according to their city size class. The water production PCIC is determined by proportionating APâ&#x20AC;&#x2122;s service level against the National Service level. Hence, water production PCIC for the different city classes is adjusted accordingly by an adjustment factor of 1.52 (ratio of AP service level / national service level). The adjusted production PCIC for the different city classes are used to determine the investment costs required for water production infrastructure. With respect to 2011 baseline year service standards, the incremental targeted population difference between 2011-2019, 2019- 2022, and 2022- 2029, are multiplied to the production PCIC based on their respective city class, to determine the incremental investment costs for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period. The adjusted Production PCIC is as shown in the following table: National service level

76

AP service level

115.6

Ratio

1.52

Production PCIC

Adjusted for AP

Class IA

1,487

978

Class IB

1,482

974

Class IC

1,404

923

Class II

1,357

892

Class III

1,282

843

Class IV+

1,282

843

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Urban Development Sector Paper – Draft for Discussion In summary, the incremental water production investment costs are determined based on the following equation: Year 2011 to 2019: Incremental investment costs = (((Urban Population 2019 x Target 2019) – (Urban Population 2011 x Target 2011)) x Adjusted PCIC production costs for AP of respective city class) Year 2020 to 2022: Incremental investment costs = (((Urban Population 2022 x Target 2022) – (Urban Population 2019 x Target 2019)) x Adjusted PCIC production costs for AP of respective city class) Year 2023 to 2029: Incremental investment costs = (((Urban Population 2029 x Target 2029) – (Urban Population 2022 x Target 2022)) x Adjusted PCIC production costs for AP of respective city class) The calculations reveal that incremental amount of water production investments costs, as the table below illustrates an estimated total of INR 602 crore, INR 238 crore and INR 580 crore for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period are needed respectively. Summary Total Cost per Class For Whole AP State (INR Crore) City Size Class

2019

2022

2029

Class IA

-

-

-

Class IB

105.99

44.74

150.81

Class IC

292.90

120.32

206.09

Class II

102.64

19.78

38.52

Class III

28.60

8.91

11.79

Class IV+

71.89

44.32

173.20

Total

602.02

238.07

580.41

12.3. Investment in Slum Upgrading Based off population projections for the short- (2019), medium- (2022) and long-term (2029), slum upgrading investment costs are determined for these three scenarios. Firstly, population projections for the cities in 2011 serve as the baseline for Slum Upgrading investment costs calculations. By benchmarking to the best 3 states in AP, a baseline 38.3% of the urban population being slums is assumed for 2015. As for the investment cost projections, 6.5%, 2% and 0% of urban population in slums targets for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period respectively are used. From which, the number of slum households is determined based on an average household size of 3.9 persons per household in AP59. The incremental number of slum households to be upgraded between 2011-2019, 20192022 and 2022-2029 is thus calculated based on the difference between 2011, 2022 and 2029. Taking an assumption of a conservative average slum upgrading cost of R 300,000 per household60, the total slum upgrading investment costs for each cities are projected by multiplying the number of slum households to be upgraded with the average slum upgrading cost.

59

Ministry of Health and Family Welfare (MOHFW), Government of India.

60

Cityscape (2015)

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Urban Development Sector Paper â&#x20AC;&#x201C; Draft for Discussion Year 2019: Total Slum Upgrading Investment Costs = (((Urban Population in Year 2019 x Slum Upgrading Target % in Year 2019) / (average household size)) - (Urban Population in Year 2011 x Slum Upgrading Target % in Year 2011) / (average household size))) x average slum upgrading cost per household Year 2022: Total Slum Upgrading Investment Costs = (((Urban Population in Year 2022 x Slum Upgrading Target % in Year 2022) / (average household size)) - (Urban Population in Year 2019 x Slum Upgrading Target % in Year 2019) / (average household size))) x average slum upgrading cost per household Year 2029: Total Slum Upgrading Investment Costs = (((Urban Population in Year 2029 x Slum Upgrading Target % in Year 2029) / (average household size)) - (Urban Population in Year 2022 x Slum Upgrading Target % in Year 2022) / (average household size))) x average slum upgrading cost per household The table below illustrates that an estimated incremental investment cost for slum upgrading is INR 36,503 crore in 2019, INR 7,386 crore in 2022 and INR 3,793 crore in 2029, as shown in the Table below. Summary Total Costs for Slum Upgrading 2019

2022

2029

No. of Households

1,216,785

246,232

126,463

Total Cost (INR Crore)

36,503.55

7,386.96

3,793.90

12.4. Infrastructure Investment: Drainage Based off population projections for the short- (2019), medium- (2022) and long-term (2029), drainage investment costs are determined for these three scenarios, with 67% service standard baseline in year 2011. Drainage targets are estimated at 78%, 85% and 100% in 2019, 2022 and 2029 respectively for all the cities in AP, which have been categorized according to their city size class. The PCIC for each city size classes used for deriving the Drainage investment costs are as shown:

Drainage PCIC Standards Class IA Class IB

4,140 4,140

Class IC Class II Class III Class IV+

5,175 2,100 2,800 2,800

With respect to 2011 baseline year service standards, the incremental targeted population difference between 2011-2019, 2019- 2022, and 2022- 2029, are multiplied to the PCIC for Drainage based on their respective city class, to determine the incremental investment costs for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period. Ernst & Young LLP | CPG Consultants

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Urban Development Sector Paper – Draft for Discussion In summary, the incremental Drainage investment costs are determined based on the following equation: Year 2011 to 2019: Incremental investment costs = (((Urban Population 2019 x Target 2019) – (Urban Population 2011 x Target 2011)) x PCIC Drainage Year 2020 to 2022: Incremental investment costs = (((Urban Population 2022 x Target 2022) – (Urban Population 2019 x Target 2019)) x PCIC Drainage Year 2023 to 2029: Incremental investment costs = (((Urban Population 2029 x Target 2029) – (Urban Population 2022 x Target 2022)) x PCIC Drainage The calculations reveal that incremental amount of drainage investments required. Table below illustrates an estimated of INR 3,163 crore, INR 1,470 crore and INR 12.638 crore for 2015 - 2019, 2020 - 2022 and 2023 2029 period are needed respectively. Summary Total Cost per Class For Whole AP State (INR Crore) City Size Class

2019

2022

2029

Class IA

-

-

-

Class IB

523.00

237.02

3,834.04

Class IC

1,847.82

830.66

5,442.51

Class II

253.69

67.25

751.91

Class III

122.29

53.78

475.37

Class IV+

416.39

281.62

2,134.30

Total

3,163.19

1,470.33

12,638.13

12.5. Infrastructure Investment: Sewerage Network Based off population projections for the short- (2019), medium- (2022) and long-term (2029), sewerage network investment costs are determined for these three scenarios, with 31.0% service standard baseline in year 2011. Sewerage Network targets are estimated at 61.7%, 73.2% and 100% in 2019, 2022 and 2029 respectively for all the cities in AP, which have been categorized according to their city size class. The sewerage network PCIC for the different city classes are used to determine the investment costs required for sewerage network infrastructure costs. The PCIC for each city size classes used for deriving the Drainage investment costs are as shown: City Size Class

Network

Class IA Class IB Class IC Class II Class III

2,092 2,573 2,338 3,246 3,637

Class IV+

4,636

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Urban Development Sector Paper – Draft for Discussion With respect to 2011 baseline year service standards, the incremental targeted population difference between 2011-2019, 2019- 2022, and 2022- 2029, are multiplied to the sewerage network PCIC based on their respective city class, to determine the incremental investment costs for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period. In summary, the incremental Sewerage Network investment costs are determined based on the following equations: Year 2011 to 2019: Incremental investment costs = (((Urban Population 2019 x Target 2019) – (Urban Population 2011 x Target 2011)) x PCIC Sewerage Network Year 2020 to 2022: Incremental investment costs = (((Urban Population 2022 x Target 2022) – (Urban Population 2019 x Target 2019)) x PCIC Sewerage Network Year 2023 to 2029: Incremental investment costs = (((Urban Population 2029 x Target 2029) – (Urban Population 2022 x Target 2022)) x PCIC Sewerage Network The calculations reveal that incremental amount of sewerage network investments required. Table below illustrates an estimated total of INR 4,865 crore, INR 812 crore and INR 2,151 crore for 2015 - 2019, 2020 2022 and 2023 - 2029 period are needed respectively. Summary Total Cost per Class For Whole AP State (INR Crore) City Size Class

2019

2022

2029

Class IA

-

-

-

Class IB

643.41

195.48

848.68

Class IC

1,465.33

494.19

1,011.51

Class II

779.85

164.95

377.93

Class III

455.98

92.81

182.45

Class IV+

329.50

148.13

628.43

Total

3,674.08

1,095.56

3,049.01

12.6. Infrastructure Investment: Sewerage Treatment Based off population projections for the short- (2019), medium- (2022) and long-term (2029), sewerage treatment investment costs are determined for these three scenarios, with 7% service standard baseline in year 2015. Sewerage Treatment targets are estimated at 41%, 61% and 100% for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period respectively for all the cities in AP, which have been categorized according to their city size class. The sewerage treatment PCIC for the different city classes are used to determine the investment costs required for sewerage treatment infrastructure costs. The PCIC for each city size classes used for deriving the Drainage investment costs are as shown: City Size Class

Treatment

Class IA

1,268

Class IB

1,268

Class IC

1,073

Class II Class III Class IV+

2,070 2,012 2,012

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Urban Development Sector Paper – Draft for Discussion

With respect to 2015 baseline year service standards, the incremental targeted population difference between 2015-2019, 2019- 2022, and 2022- 2029, are multiplied to the sewerage treatment PCIC based on their respective city class, to determine the incremental investment costs for 2015 - 2019, 2020 - 2022 and 2023 2029 period. In summary, the incremental Sewerage treatment investment costs are determined based on the following equations: Year 2015 to 2019: Incremental investment costs = (((Urban Population 2019 x Target 2019) – (Urban Population 2015 x Target 2015)) x PCIC Sewerage Treatment Year 2020 to 2022: Incremental investment costs = (((Urban Population 2022 x Target 2022) – (Urban Population 2019 x Target 2019)) x PCIC Sewerage Treatment Year 2023 to 2029: Incremental investment costs = (((Urban Population 2029 x Target 2029) – (Urban Population 2022 x Target 2022)) x PCIC Sewerage Treatment The calculations reveal the incremental amount of sewerage treatment investments required. Table below illustrates an estimated total of INR 841 crore, INR 630 crore and INR 3,176 crore for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period are needed respectively. Summary Total Cost per Class For Whole AP State (INR Crore) City Size Class

2019

2022

2029

Class IA

-

-

-

Class IB

97.78

113.27

965.33

Class IC

252.11

312.95

1,147.42

Class II

96.98

83.01

382.64

Class III

46.32

42.17

183.58

Class IV+

56.08

78.94

496.55

Total

549.27

630.34

3,175.52

12.7. Infrastructure Investment: Solid Waste Collection Based off population projections for the short- (2019), medium- (2022) and long-term (2029), the investment costs for solid waste collection are determined for these three scenarios. Firstly, the total solid waste generated by city class is determined with 2011 as the service baseline year.

For 2019, 2022 and 2029, the projected the total solid waste generated is multiplied to an average annual growth rate of 1.3% and the average per capita waste generation by city class. The projected urban population by the average per capita waste generation by city class as shown in the following equation.

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Urban Development Sector Paper â&#x20AC;&#x201C; Draft for Discussion For Year 2019, 2022 and 2029: Solid Waste Generated = urban population in Projected x average annual growth rate of 1.3% x average per capita waste generation by city class The average per capita solid waste generation by city class is as shown in the following table: City Size Class

Average Per Capita Waste Generation by city class

Class IA

608 grams per person per day

Class IB

425grams per person per day

Class IC

304 grams per person per day

Class II

255 grams per person per day

Class III

255 grams per person per day

Class IV+

255 grams per person per day

Next, based from the total solid waste generation per city, the total waste treated by city class for each city is calculated. A 7% average total waste generation in the baseline year 2011 is used, while targets for solid waste management for the three scenarios of 92.6%, 94.8% and 0.8% treatment is used for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period respectively. Subsequently, the population in each city being treated with solid waste management is determined by dividing by taking the absolute Change in Total Waste Generation by City Class (g/day) against the Base Year 2011 with the Average Per Capita Waste Generation by city class, Population treated with Solid Waste Collection = ((Waste generation by city class x targeted % treated by Solid Waste Collection) - (Base Year 2011 Waste generation by city class x Baseline Year 2011 % treated by Solid Waste Management)) / Average per capita waste generation by city class Lastly, the total solid waste collection investment costs are calculated by multiplying the projected population in each city being treated with solid waste management to the per capita investment cost (PCIC), according to the respective city size classes. Total Solid Waste Collection Investment Costs = Projected population treated with Solid Waste Management x Per capita investment cost (PCIC) The PCIC for each city size classes used for deriving the Solid Waste collection infrastructure investment costs are as shown: PCIC Standards for Solid Waste Collection Class IA

307

Class IB Class IC Class II Class III Class IV+

134 140 81 70 70

Thus, the estimated total solid waste collection investment costs amount to INR 144 crore in 2019, INR 78 crore in 2022, and INR 218 crore in 2029, as illustrated in the table below. Ernst & Young LLP | CPG Consultants

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Urban Development Sector Paper â&#x20AC;&#x201C; Draft for Discussion Summary Total Cost per Class For Whole AP State (INR Crore) City Size Class

2019

2022

2029

Class IA

-

-

-

Class IB

30.12

15.99

73.48

Class IC

81.46

46.77

96.18

Class II

16.75

7.04

16.23

Class III

7.47

3.05

6.02

Class IV+

8.26

5.99

26.33

Total

144.05

78.85

218.23

12.8. Infrastructure Investment: Solid Waste Treatment Based off population projections for the short- (2019), medium- (2022) and long-term (2029), the investment costs for solid waste Treatment are determined for these three scenarios. Firstly, the total solid waste generated by city class is determined with year 2011 as the service baseline year. For 2019, 2022 and 2029, the projected the total solid waste generated is multiplied to an average annual growth rate of 1.3% and the average per capita waste generation by city class. The projected urban population by the average per capita waste generation by city class as shown in the following equation. For Year 2019, 2022 and 2029: Solid Waste Generated = urban population in Projected x average annual growth rate of 1.3% x average per capita waste generation by city class The average per capita solid waste generation by city class is as shown in the following table: City Size Class

Average Per Capita Waste Generation by city class

Class IA

608 grams per person per day

Class IB

425grams per person per day

Class IC

304 grams per person per day

Class II

255 grams per person per day

Class III

255 grams per person per day

Class IV+

255 grams per person per day

Next, based from the total solid waste generation per city, the total waste treated by city class for each city is calculated. A 7% average total waste generation in the baseline year 2015 is used, while targets for solid waste management for the three scenarios of 50%, 67% and 100% treatment is used for 2015 - 2019, 2020 - 2022 and 2023 - 2029 period respectively. Subsequently, the population in each city being treated with solid waste management is determined by dividing by taking the absolute Change in Total Waste Generation by City Class (g/day) against the Base Year 2011 with the Average Per Capita Waste Generation by city class, Population treated with Solid Waste Treatment = ((Waste generation by city class x targeted % treated by Solid Waste Management) - (Base Year 2015 Waste generation by city class x Baseline Year 2015 % treated by Solid Waste Management)) / Average per capita waste generation by city class Ernst & Young LLP | CPG Consultants

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Urban Development Sector Paper â&#x20AC;&#x201C; Draft for Discussion Lastly, the total solid waste management investment costs are calculated by multiplying the projected population in each city being treated with solid waste management to the per capita investment cost (PCIC), according to the respective city size classes. Total Solid Waste Treatment Investment Costs = Projected population treated with Solid Waste Management x Per capita investment cost (PCIC) The PCIC for each city size classes used for deriving the Solid Waste Management infrastructure investment costs are as shown: PCIC Standards for Solid Waste Treatment Class IA Class IB Class IC Class II Class III

593 259 270 155 134

Class IV+

134

Thus, the estimated total solid waste management investment costs amount to INR 277 crore in 2019, INR 151 crore in 2022, and INR 420 crore in 2029, as illustrated in the table below. Summary Total Cost per Class For Whole AP State (INR Crore) City Size Class

2019

2022

2029

Class IA

-

-

-

Class IB

58.22

30.90

142.05

Class IC

157.10

90.20

185.49

Class II

32.05

13.48

31.05

Class III

14.30

5.85

11.52

Class IV+

15.81

11.47

50.41

Total

277.47

151.90

420.52

12.9. Infrastructure Investment: Smart Cities It is announced by AP Chief Minister N. Chandrababu Naidu that the state aims to develop 14 smart cities. These cities are namely Visakhapatnam, Kakinada, Tirupathi, Vijayawada, Rajahmundry, Srikakulam, Vizianagaram, Guntur, Nellore, Ongole, Anantapur, Kurnool, Kadapa and Eluru. Therefore, based off population projections for the short- (2019), medium- (2022) and long-term (2029) of the abovementioned prospective smart cities, investment costs of smart cities are calculated for these three scenarios. It is assumed that the 3 cities targeted for 2019 are namely Vishakhapatnam, Tirupathi and Kakinada as they have been identified as part of the National Smart Cities in AP by the government in 2015. For Year 2022, the next 3 largest cities namely Guntur, Vijayawada are added on as target cities. While in 2029, all 14 cities are targeted to be smart cities.

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Urban Development Sector Paper â&#x20AC;&#x201C; Draft for Discussion Firstly, the investment costs are calculated by taking the national government budget for smart cities developments61 against the total population in smart cities62 to determine an estimated average smart city investment cost per capita. Average Smart City Investment Cost per capita = Total national government budget for smart city developments / total population in smart cities Next, the average smart city investment cost per capita will be the basis to determine AP smart cities total investment costs according to the respective population projections. Total Smart City Investment Costs = Average smart city investment cost per capita x population in smart cities An estimated the incremental smart cities investment cost of INR 1,470 crore in 2019, INR 1,512 crore in 2022 and INR 2,015 crores in 2029 is needed to achieved the targeted number of smart cities as illustrated in the table below. Summary Total Costs for Smart Cities 2019

2022

2029

No. of Cities

3

6

14

Smart Cities Population

3,406,084

3,502,528

4,667,871

Total Cost (INR Crore)

1,470.53

1,512.17

2,015.29

12.10. Infrastructure Investment: Mee-seva Centers According to Department Government of AP, the coverage of Mee-Seva centers in AP is expected to increase whereby generally each ward is targeted to have a center. As such, the state aims to develop 1,322, 2,143 and 3,465 of Mee-Seva centers in 2019, 2022 and 2029 respectively. Based off the targeted number of Mee-Seva centers, investment costs required for Mee-Seva centers for these three scenarios which are for the short- (2019), medium- (2022) and long-term (2029) are projected. The investment costs are calculated by taking the tentative financial budget under 20 non-negotiable indicator of Smart Village/Smart Ward to determine an estimated average Mee-Seva centers investment cost per unit, which amount to an approximation of 100,000 Rs per unit. Next, the average unit cost per Mee-Seva will be the basis to determine the investment costs for AP Mee-Seva centers according to the respective population projections. Total Mee-Seva centers Investment Costs = Average Mee-Seva centers investment cost per unit x Targeted Number of Mee-Seva Centers An estimated total Mee-seva centers investment cost of INR 5 crore in 2019, INR8.21 crore in 2022 and INR 13.22 crores in 2029 is needed to achieve the targeted number of smart cities as illustrated in the table below. Summary Total Costs for Mee-seva Centers (INR Crore) Total number of Mee-seva Centers 2019

2022

2029

1,322

2,143

3,465

61

TheHindu.com

62

Smart Cities Council India (2015)

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Unit Cost (Rs) 100,000

Total Cost (INR Crore) 2019

2022

2029

5

8.21

13.22

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13. Annexure III: Meeting minutes 13.1. Stakeholder Meeting 1 Agenda: Meeting with Giridhar Armanee (Principal Secretary to Government MAUD) Date: 14th March 2015

Time: 9 .30 am

Venue: Secretariat Building

Attendees Stakeholder: Principal Secretary to Government MAUD Consultant: Mr. Ram Prasad (Project Lead – EY)

1.

Discussion Points

The presentation and the sector paper developed by CPG were shared with the Secretary and also briefly explained the overall methodology. Secretary opined that the presentation/paper needs to be contextualized further. EY informed that contextualization will be undertaken post analysis of urban sector data and stakeholder consultations. EY also informed that a list of stakeholders have already been shared by EY with Planning Department. Principal Secretary requested EY to start interactions with urban sector stakeholders and asked EY team to closely coordinate with Director Town and Country Planning (DTCP) and Additional Director Municipal Administration. EY requested Urban Secretary to provide information on Urban development strategy being formulated for the Capital Region to understand that impact the of proposed capital region on the adjoining Municipalities/ULBs. DTCP informed that the strategy is currently under preparation and will share as and when the same is approved by the Government of AP. DTCP informed that latest data related all ULBs have been compiled by DTCP and they will be able to share this information with EY. DTCP requested EY to hold a Focused Group Discussion with its officials so as to understand our approach and provide all the inputs required for preparation of urban sector vision.

• •

2.

Decision Points

After interaction with Mr. Giridhar Armanee a close interaction need to be taken with DTCP and Additional Director Municipal Administration for further understanding and new improvements or ideas

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13.2. Stakeholder Meeting 2 Agenda: Meeting with Mr. Thimma Reddy director of DTCP Date: 25th March 2015

Time: 5 .30 pm

Venue: DTCP Office Mythri Vihar, Ameerpet, Hyderabad.

Attendees • •

Stakeholder: Director, Directorate of Town and Country Planning and other staff members Consultant: RBSR Prasad (Project Lead – EY), Padmaja (EY), Riddhi Vyas (EY)

1. Discussion Points • • • •

• • •

• •

• • •

The presentation on urban sector situation was shared with the DTCP. EY requested that DTCP to provide his views on Urban sector development by filling the stakeholder questionnaire. DTCP requested EY to share the email format of the questionnaire. In discussion with the current trend of new state Andhra Pradesh, he stated the state is not growing in a balanced way. EY team was requested to review the Shiva Ramakrishna Committee Report as this report focused on regional development issues and provided several suggestions to the State Government for its consideration. Industrial growth in the state should be based on the raw material availability in the districts. Proposed railway line from Sri Kalahasthi, Chitoor district to Nadikudi is expected to create lot of development in the region. EY team was requested to look into this aspect. In order to sustain the overall development in the State, it is important to operationalise projects like Polavaram Project, which will provide much needed water resources and power to support the growth of Industry, agriculture and urban growth etc. In a discussion about the new capital city development, stated 30000 acres are used for construction of new capital, 29 villages are involved. A special resettlement and rehabilitation package is already worked out to ensure livelihoods of effected population. Majority of the problems in the Urban areas related to availability of water, power, drainage, sanitation, transport and governance are which need to be addressed properly through various initiatives focusing on governance, funding, skills and other capacity issues while holistically looking at the entire urban eco-system. EY requested the Director to explain the process of assurance of the quality and timeliness of preparation of Urban/city development plans where DTCP is primarily involved: City base map preparation takes longer time due to acquisition of satellite imageries and mosaic of cadastral information, which needs to be addressed through proper definition of the roles of institutions like APSRAC/NrsA and survey/land record department in the context of Urban Planning. The ULBs are being funded adequately for the preparation of DPRS and other detailed infrastructure reports. However, the funding is limited for preparation of master planning work. DTCP, ULBs lack the necessary skills required for planning urban areas and the skills needs to be augmented through technology training as well as training on subject matter expertise. DTCP has recently introduced 3rd party check to ensure that the quality base map is prepared as per the requirements. Accordingly, necessary clauses have been introduced in the bidding process for selection of the contractors. However, the same is yet to be institutionalised.

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Urban Development Sector Paper – Draft for Discussion •

• • • • • • • • • • • • • • • • •

Director explained the new set of user charges introduced to augment the revenues of the DTCP. These revenues will be used for up-gradation of the technical tools/infrastructure like Computers, GIS and training of the staff etc. Master plan preparation is a data intensive exercise and requires support of various departments in providing data in a timely manner. DTCP requested that Planning Department of AP may implement a Data Hub to host data of all departments online. EY explained DTCP that such an initiative has already been taken by the Government’ named State Enterprise Architecture’ and requested DTCP to provide their data requirements to IT department , AP. By 2017, DTCP intends to make the process of building/layout approvals online. DTCP has provided the following data: AP Municipalities map pdf Satellite view of VGTM Administrative boundaries of VGTM Map showing 110ULBs – Autocad file Map 110ULBs image file ULB list with Grading Statistical information of ULBs in AP and status of Master plan Administrative Boundaries of proposed New capital DTCP requested EY to undertake consultations with the following departments: Municipal Administration and Urban Development MEPMA Public Health and Engineering Survey & land Records APSRAC Centre for Good Governance

2. Decision Points • •

SivaRamakrishna report should be reviewed. After EY finishes the stakeholder consultations, with the departments/agencies mentioned above, a presentation should be made to Principal Secretary Urban Development on the issues & challenges and key thematic areas of focus for urban sector vision.

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13.3. Stakeholder Meeting 3 Agenda: Attending Urban Mission Induction Program to understand the issues & needs in urban development sector. Date: 30th April 2015

Time: 9 am-3:30 pm

Venue: ISB, Hyderabad

Attendees • •

Organizers: Prof. S. Ramanarayan (ISB), Prof. Rajeshwar Upadhaya (ISB), Ms. Mamatha Reddy (ISB). Participants: Mr. Madhusudan Reddy (APUFIDC), Ms. Lavanya (APUFIDC), Mr. Karthik Karkal (CPG), Mr. Nguyen Do Dung (CPG),Ms. Riddhi Vyas (EY), PWC members.

1. Presentation by CPG team: • • • • • •

Key Points: Approaches Key Issues Initial Assessment Global Trends National & State Policies

Needs: • • • •

Urban sector vision document should focus on the challenges and issues of the ULBs and should suggest and incorporate practically possible solutions. Vision document should include National level policies which are revised recently. Legal framework for the monitoring and implementation of the tasks and enabling environment from the government is needed for better development of the cities. Broad level IT framework is required to guide ULBs and to enable them for taking actions & decisions.

2. Presentation by APUFIDC team on Urban Development Mission: Key points: • •

Urban Transformation: In, Andhra Pradesh urban population is rapidly increasing, 14.6 million urban population constituting about 30% of the total population and is projected to more than double by 2050. Critical Issues in Urban Transformation o There is a need to promote good urban governance and participation among the urban local bodies. The e-governance and ICT enabled initiatives are needed to enhance citizen participation, transparency and accountability. o ULBs should have powers and authority to enable them to function as institutions of selfgovernment. o Urban local bodies require new and innovative ways of mobilizing finances. o ULBs should adopt national and international benchmarks in the provision of various services. o Adequate municipal capacity is needed at the political and administrative level to plan, implement and monitor the developmental activities in the city.

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Urban Development Sector Paper – Draft for Discussion Vision for the urban development mission: Smartly governed cities/towns in AP by 2029 with all the basic amenities, safety & social security, efficient service delivery and environment friendly approach. Goal of Urban Mission: Cities and towns in AP will be well planned, economically attractive, environmentally sustainable and safe. Need for Urban Mission • • • • • • •

To ensure basic service provision for all; To integrate provision of health, education, welfare & other services; To provide environment where local bodies can thrive and provide employment; To adapt technological improvements in service delivery and inclusive governance; To ensure good communication between government and citizens; To adopt open information approach; To use the available local resources in service delivery.

Missions & Sub-missions Infrastructure & Service delivery • • • • • •

Water Sewerage Storm water drainage Solid waste management Sanitation Street lighting

Mobility & Safety • •

Mobility Safety & Security

Planning • • • • • •

Preparation of GIS base maps Implementation of Online Building Application Module for disposal of building applications. Capacity building for town planning staff in GIS for implementation of E-governance for transparency Delegation of powers regarding change of land use cases in approved master plan areas for speedy disposal. Documentation of Municipal Layout Open Spaces and Municipal Fixed Assets. Enforce AP Town Planning Act 1920, AP building rules and National Urban Information Schemes.

Poverty & Housing • • •

Poverty Reduction Skill Training Housing for all

Environment & Disaster Management • •

Investor enabled and investor friendly cities. Ease in doing business.

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Urban Development Sector Paper – Draft for Discussion • • • • • • • •

Single window approach Common infrastructure Entrepreneurship and innovation Regulation and control Environmental friendly cities Green building Green Energy Urban Forestry

Social Development: • • • •

Provision of community infrastructure Strengthen social amenities PPP for providing educational facilities to the poor Convergence with govt. of India and state govt. and ULBs for all educational programs.

Implementation Mechanism • • • • •

Centralize application and database through Virtualization Dash board to be integrated with CMO Service introduced through Mee-seva GIS integrated solution with 28 modules integrating with other departments Online submission of applications

Financing • • •

Strengthening and streaming property tax over 25% of municipal revenues and 60% internal revenues Revision of fees and user charges etc. Constitution of municipal services regularity commission.

Capacity Building • • • •

comprehensive plan and training by all ULBs Allocation of training budgets by state and ULBs Cities are permitted to hire private consultants for specialised expertise in the focus area Skill building and knowledge expanding through training in the areas of smart cities, green cities etc.

Challenges & Needs: • • • • • • • •

Government departments do not function efficiently. Database is not available for all the departments at all level. Capacity Building is must for better functioning of ULBs. Mid-term monitoring of the missions and sub-missions is important as to change the objectives according to the changing requirements. People's involvement is important to reach the goal of the mission. Therefore, community participation is mandatory. Ward wise data analysis should be done and the data should be available to each and every level. Political tenure is an issue. Government do not give freedom to the ULBs to act freely and take decisions. Priority wise rating of the missions is necessary for monitoring the performance and completion of the targets.

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13.4. Stakeholder Meeting 4 Agenda: Attending Urban Mission Induction Program – Environment and Disaster Management Date: 1st May 2015

Time: 9 am-3:30 pm

Venue: ISB, Hyderabad.

Attendees • •

Organizers: Prof. S. Ramanarayan (ISB), Prof. Rajeshwar Upadhaya (ISB), Ms. Mamatha Reddy (ISB). Participants: Mr. Madhusudan Reddy (APUFIDC), Ms. Lavanya (APUFIDC), Mr. Karthik Karkal (CPG), PWC members.

Environment – Both as an asset and a responsibility in urban areas • • • • • • • • •

Goals (Environment) Protect existing natural features like lakes, forest, wetlands etc. Create more green and open space (outdoor sports/recreation/burial grounds/cemeteries) Create opportunities for residents to interact with nature Placing limitations/regulations on all environmental pollution for example – waste management, vehicular emission, surface and ground water quality Implementation of building codes for rainwater harvesting, earthquake resistance, energy efficiencies, fire, etc. Ensure planning is done with respect to the local topography, environmental performance Protect by law all the heritage trees/ groves Reduce the environmental impact of development (example urban heat island) – Green planning norms

Disaster (Environmental) – Both as a consequence of natural activity and man-made • • • • • • • • • • • • •

Goals (Disaster Management) Natural Mapping/zoning the vulnerable areas Protect the vulnerable societies/neighbourhoods/cities Create utilities (canals/drains) to accommodate the peak storm water discharge Preparedness for emergency response/relief Plan for post disaster recovery/rebuilding Create warning systems Building codes for hazard resilience Create barriers from natural disaster spots (like minimum distance from volcanoes, etc.) Man-made Create protection barriers/ zones near hazardous industry/energy plants EIA to become mandatory for major projects and construction in vulnerable areas/ environmentally sensitive areas

Setting up the framework and the flow •

Goals ---- Plans ----- Implementation ------ measurable outcomes

See overlaps with other missions and sub-missions and then make recommendations to them or include their recommendation in our sub-mission of environment and disaster management Ernst & Young LLP | CPG Consultants

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13.5 . Stakeholder Meeting 5 Agenda: Presentation to the Principal Secretary to Government MAUD – Proposed Urban Strategies to Support 2-digit Growth and Implementation Programs Date: 4th May 2015

Time: 12.30 – 1.30 pm

Venue: Secretariat Building

Attendees Stakeholder: Mr. Giridhar Armanee (Principal Secretary to Government MAUD) Consultant: Mr. Karthik Karkal (CPG), Mr. Nguyen Do Dung (CPG)

1. Discussion Points • • • •

CPG Consultants presented our work explaining the three strategies for managing urbanization in the future cities of Andhra Pradesh The client agreed with the broad framework presented and also highlighted that the strategies are aligned with the state vision of growth CPG Consultants then presented the revised framework and thinking for the Urban Mission and its submissions Suggestion was made by the client to discuss this with Mr. Madhusudan Reddy (APUFIDC) and Ms. G.Jayalakshmi (Representative of Urban Mission and Secretary of Municipal Administration and Urban Development) CPG had put in a request to get information on the Capital Region master plan being prepared by the team form Singapore. This would help the Urban Sector and the Urban Mission to align with the other major plan for urbanisation in the state in the form of the Capital Region. Client had informed us to join the meeting on the 5th May 2015 where the contingent from Singapore was making presentations to them.

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13.6. Stakeholder Meeting 6 Agenda: Presentation to the Representative of Urban Mission – Proposed Urban Strategies to Support 2-digit Growth and Implementation Programs Date: 5th May 2015

Time: 4.30 – 5.30 pm

Venue: Office of Municipal Administration and Urban Development, Secretariat Building, Hyderabad

Attendees Stakeholder: Ms. G.Jayalakshmi (Representative of Urban Mission and Secretary of Municipal Administration and Urban Development) Consultant: Mr. Karthik Karkal (CPG), Mr. Nguyen Do Dung (CPG)

1.Discussion Points •

CPG Consultants presented our work explaining the three strategies for managing urbanization in the future cities of Andhra Pradesh and the revised framework and thinking for the Urban Mission and its sub-missions Ms. Jayalakshmi suggested that we provide more granularities to the programs and strategies. Her main request was to bring the programs down to the level of ULBs so that they are able to understand their actionable steps and meet the goals by aligning with the measurable outcomes. CPG Consultants requested from her the following support: the current institutional structure in the state and ULBs, the roles/responsibilities of the various government agencies and understand the governance issues in the state. Ms. Jayalakshmi mentioned she will be sharing the “Achieving double-digit growth” action plan document so that we are to see what recommendations are made towards that and how it impacts our programs/strategies.

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References 1. Administrative Staff College of India, Jawaharlal Nehru National Urban Renewal Mission – Regional Capacity Building Hub: Module 1 – Urban Governance, 2011 2. Callanan, M. (2011). Review of international local government efficiency reforms. Dublin, IR: Institute of Public Administration.

3. Cities Alliance, Guide to City Development Strategies – Improving Urban Performance, 2006 4. Chetan Vaidya, Urban issues, reforms and way forward in India, Department of Economic Affairs, Ministry of Finance, 2009 5. Chia Siow Yue, The Singapore model of industrial policy: Past evolution and current thinking, Singapore Institute of International Affairs, 2005 6. Department of Industries & Commerce (2015). Industry Mission Document. 7. Finance Commission, 14th Finance Commission Report, 2015 8. High Powered Expert Committee for Estimating the Investment Requirements for Urban Infrastructure Services (HPEC) (2011). Report on Indian Urban Infrastructure and Services. 9. Housing Development Board of Singapore, HDB Annual Report 2013-2014, 2014 10. Kreft, Sönke and D. Eckstein, Global Climate Risk Index 2014, 2014 11. McKinsey Global Institute, India’s Urban Awakening: Building inclusive cities, sustaining economic growth, 2010 12. Ministry of Home Affairs, Government of India, Census of 2011 13. Ministry of Manpower of Singapore, http://stats.mom.gov.sg/Pages/Labour-Force-Summary-Table.aspx, 2015 14. Ministry of Urban Development, Government of India , Comprehensive Mobility Plan in Vijayawada 2013; Traffic and Transportation Policies and Strategies in Urban Areas in India Final Report, New Delhi, March 1998 15. Ministry of Urban Development, Government of India, “Smart Cities, Mission Statement and Guidelines”, June 2015 16. Municipal Administration & Urban Development Department, Government of AP, Strategy Paper Urban Mission AP – Draft for Suggestions, 2014 17. Municipal Administration & Urban Development Department, Government of AP, Strategy Paper Urban Mission AP – Draft for Suggestions, 2014 18. National Institute of Disaster Management, AP National Disaster Risk Reduction Portal, 2012 19. Office of the Registrar General and Census Commissioner 2011 20. Planning Commission, 12th Five Year Plan, Government of India, 2013 21. Planning Department Government of AP, AP State Statistical Abstract, 2014 22. Planning Department, Socio Economic Survey 2013 -2014, Government of AP, 2014 23. Siemens AG, Asian Green City Index, 2011 24. Steering committee on Urban Development & Management, Report of the Working Group on Financing Urban Infrastructure, 2011 Ernst & Young LLP | CPG Consultants

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Urban Development Sector Paper – Draft for Discussion 25. Yu Min Joo, The city as a National Growth Machine: City-building and the role of urban development in South Korea’s political and economic transitions, PhD dissertation at Department of Urban Studies and Planning, Massachusetts Institute of Technology, 2011 26. Vijayawada Municipal Corporation (2013). Slum Free City Plan of Action for Vijayawada Municipal

Corporation. 27. Webster, Douglas. Financing City-building: the case of Bangkok. The Urban Dynamics of East Asia. Stanford: Asia Pacific Research Center, Stanford University Press, 2000 28. World Bank (2012). Indian Urbanization Review 2012 29. World Bank, Urbanization beyond municipal boundaries – Nurturing Metropolitan Economies and Connecting Peri-urban Areas in India, 2013

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Profile for Dzung Do Nguyen

Andhra Pradesh Urban Development Vision 2029  

Andhra Pradesh Urban Development Vision 2029