Unconventional Methods of Financing Urban Development : The Role of PPP

The demand for urban infrastructure and amenities in India far exceeds the limited conventional financial resources of local governments. As a result, skills in accessing unconventional financing sources (such as municipal bond markets and using state assets more productively) have become essential. This will require the Urban Local Bodies (ULBs) to learn to initiate and sustain Public Private Partnerships (PPPs). This chapter discusses common PPP modes in municipalities, and the risks and challenges in implementing them. The introduction of private capital or managerial expertise through a PPP does not guarantee success in itself; it has to be supported by transparent and equitable risk allocation between partners. The governance structures of the ULBs will need to become more accountable and performance-oriented