Green bonds to 24x7 potable water, municipal governance comes of age

The past three years have enhanced the need for stronger municipal governance. The triggers for change include the NBFC-sector slowdown and consequent tightening of the Indian debt markets, Covid-19 and pressure on the municipalities to deliver better outcomes for citizens, net-zero carbon emission commitments at the national level and the change in weather patterns caused by climate change.

Resilient municipalities have showed a surprising amount of enterprise and self-confidence in tackling civic issues. It's involved a combination of technology (right from e-governance to crowd-sourcing ideas and issues to be solved) to partnerships with private enterprises. Here’s how they have done it:

Air quality management: Not only did the Union budget offer ₹2,217 crore to the 42 urban centers to tackle air pollution, the cities themselves are charting their own strategies. Be it Ahmedabad Municipal Corporation appointing a consultant to strategise on how to effectively use the Union grants or Indore city joining the International clean air catalyst program launched by USAID to accelerate clean air solutions. Policy tweaks can go a long way in aiding this cause. For example, Gujarat government will no longer allow polluting chemical plants to be included in the town planning schemes of the municipalities in the state. Existing polluting industries will have to shift out of the cities within a time frame or reduce their pollution output drastically.

Bonds: India has the second-largest green bond market among emerging countries after China. Ghaziabad Nagar Nigam raised India’s first Green Municipal bond issue of ₹150 crore in April this year. Funds are to be used to recycle waste water into drinking water.

Climate Action: Mumbai became the first big city in India and South Asia to launch its climate action plan, focusing on six action tracks - sustainable waste management, urban greening, urban flooding, energy efficiency, air quality, and mobility. These are ten-year goals. Some experts predict that 65% of South Mumbai will submerge in the sea by 2050, if measures are not taken up immediately. Given these doomsday predictions though, even a ten-year goal seems too long-term!

Desalination plants: Mumbai will have a 200-million-litres-per-day desalination plant by 2025. Chennai’s desalination plant, with a capacity 100 million litres per day, has been operational since 2013. For mega cities, it is necessary to have a water source other than the capricious monsoon! Cities have to augment these efforts along with rainwater harvesting.

Education: Children have shifted from private schools to municipal schools! In Gujarat, more than 61,000 students have shifted from private schools to government and municipal corporation-run primary schools this year. Reasons: Government schools are free of cost, have introduced English as a medium of learning and the precarious financial state of parents in Covid times. Time would tell if this trend is sustainable.

Electric Vehicles: Some of the municipal transport companies such as Navi Mumbai Municipal Transport, Ghaziabad City Transport, Pune Mahanagar Parivahan Mahamandal Ltd have acquired electric buses. North Delhi Municipal Corporation has planned to set up 50 electric vehicle charging stations over the next six months. The Corporation will get a share in the revenue generated from these stations.

Greening: Urban Greening has been a focus area under the ‘Smart cities’ program. What is new is that the Residential Welfare Societies are taking care of public parks and negotiating for an increase in service charges with the municipal corporations. The Municipal Corporation (MC), Yamunanagar-Jagadhri (Haryana) will soon increase the maintenance charge of parks (from ₹2-5 per sq.m) being looked after by the various resident welfare associations (RWA) and other organisations. Chandigarh, Mohali MC accepted a similar increase in fee for RWAs.

Land Monetisation: Telangana government is developing Kokapet near Hyderabad as an integrated township and auctioning land parcels in the area. 50 acres were auctioned and ₹2,000 crore was generated. Municipalities monetising their land banks would ensure no future encroachments on public land besides boosting their finances.

Public Private Partnerships: Government is takeing the help of private companies to restore heritage sites. GMR will take up restoration works for Golconda fort, the Dalmia group will help with Red Fort in Delhi and Gandikota fort in AP. Companies are doing this as part of their CSR work. Municipal corporations are outsourcing the operations of their sports complexes (East Delhi), gymnasiums (Ahmedabad), calling for community participation in city infrastructure creation (Tamilnadu Government), and building new cities (Film city, UP Government) via private partnerships.

Renewable Energy: Municipal corporations are part of the renewable energy efforts. Greater Hyderabad Municipal Corporation is using solar power for traffic signals. Chandigarh MC will get a floating solar power plant at the Sector 39 waterworks. Rourkela MC will soon install solar power panels on the rooftops of as many as 54 government buildings in the city.

Solid waste management: GHMC has set up a Construction and Demolition (C&D) recycling facility, second one in the city, with a capacity to process 500 tonnes per day. Hyderabad is the third city in India to have this facility after Delhi and Ahmedabad. Himachal Pradesh and Goa are the two (tourist) states in the country which process 98% of the municipal solid waste through scientific methods in their cities. The national average is 68%.

Wet waste is converted into energy- the Ashok Meadows housing complex in Pune has, since 2017, fed its food waste into a digester that converts it into biogas. This is used to light the area's streetlights, park, social club, and gym. Koramangala RWA in Bengaluru has an anaerobic biogas plant currently handling forty tonnes of wet waste per week. The locality manages its solid waste in its own plant. The gas generated is 20% cheaper than LPG.

Street vendors: Registered street vendors of Chandigarh are all set to join e-commerce platforms. You can soon order street food online in Chandigarh on Swiggy or Zomato. The municipal corporation is imparting training to the registered vendors on hygiene.

Water supply: Puri became the first city in India to provide drinking water from tap 24x7. The water does not require to be further treated for drinking. Indore is the first to be certified as water-plus city under the Swachh Bharat Program. This means the waste water is scientifically treated before it is released; this is possible only when there are good drainage systems and sewage treatment plants in the cities. Nine other cities have the certification.

Is there more ?

While there are positive trends in many areas, public health surprisingly remains immune to change. The health budgets (2021-22) of leading municipal corporations such as Bengaluru, Bhopal, New Delhi show that there is no significant increase in allocation since the previous year. Health continues to account for less than 5% of the total budget except for Greater Mumbai! If we have not learnt from the Covid crisis over the past many months, then when will we?

What the trends indicate is the emergence of local governments as the focal point of dealing with urbanisation issues. At the core of this emergence would be the strengthening of the municipal finances and an upgradation of the skills of the municipal staff.

K. Subalakshmi is a senior credit professional and the founder of Munify Datatech, a national municipal database. Views expressed here are personal.