FIRE-D PROJECT

BY ONIKA ARORA500024126MBA(IFM)

POST FIRE-D• Early 1990s, various economic growth initiatives supported by

USAID, including housing mortgage finance.

• Only 2 housing finance companies initially, the Housing Development Finance Corporation (HDFC), and the Housing and Urban Development Corporation (HUDCO).

• National Housing Bank (NHB) established in 1987 by the GoI.

• Between 1988 and 1993, more than 80 housing finance companies established and registered through NHB.

ISSUES LEADING TO FIRE-D• Deficiencies in the infrastructure delivery system.

• Alternatives to the traditional, publically funded and managed approach required for developing and maintaining infrastructure.

• A study(1990) on Delhi’s land development process revealed that:

– The lack of potable water, sewerage, and solid waste, poor quality of life for low- and middle-income households.

– Neither the public nor private sector capable of delivering a sufficient supply of affordable developed land to low- and middle-income households.

– Unless major changes to the land and infrastructure supply processes, combined with a way to make housing more affordable, the growth of informal settlements would continue.

INTRODUCTION:FIRE-D• The Indo-USAID programme Financial Institutions Reform and Expansion Program

—Debt & Infrastructure.

• Launched in 1994 in support of the GoI’s initiatives to decentralize government authority to the local level.

• Main objectives:– Establishing a system for financing infrastructure to support development of

debt market in India by using the Housing Guarantee (HG) funds for issuing of debt instruments to finance urban infra-projects.

– Orienting urban infrastructure projects in a commercially viable manner to attract private investment.

– Promoting better urban governance.

FIRE-D:THE DESIGN• The design process for the Project initiated in 1990 to address the issues

on the study.

• Stakeholder driven design process as decided by USAID (which is not the norm for preparing international donor-funded projects).

• Core group of stakeholders:– The collaborating agencies USAID and Ministry of Urban Development

and Poverty Alleviation.

– NIUA, nodal agency to promote, analyse and disseminate the policy change agenda, to coordinate and conduct capacity building training workshops in the demonstration cities.

• Core group of stakeholders(in continuation):

– Financial intermediaries, HUDCO IL&FS.

– An expert consultancy group of 2 US companies, The Communities Group (TCG) International and Planning and Development Collaborative (PADCO) management services: project management support services and technical assistance to the program partners.

• USAID: Technical assistance, funds US $125 million(HG funds) for a period of 30 years to develop an urban infrastructure finance system.

• HUDCO and IL&FS: Financial intermediaries to channel the funds by USAID, locally raised funds to municipalities or private sector entities to finance selected commercially viable urban infrastructure (water supply, sewerage, solid waste management and area development).

• 16-year duration of the FIRE (D) Program.

• Direction for work at the central, state, and local levels.

PHASES OF FIRE-D• Three distinct phases. :

• First phase (1994–1999):

– Design and implementation of model commercially viable infras-projects (CVIPs) and private sector participation (PSP) demonstration projects.

– Minimal state government intervention in urban reforms .

• Second phase(1999-2003):– Attempted to institutionalize better project development practices and

critical urban reforms at a larger scale primarily through • creation of state-level nodal agencies.

• state-level interventions on policy, financing, and regulatory issues

• development of a national training network.

• national urban governance reform initiatives.

• the setting up of state City Managers Associations (CMAs).

• Third phase (2004–2008, with extension into 2011):

– Integration of the various policy and project implementation aspects of the FIRE-D Program.

– A more comprehensive approach to urban sector reform, for increasing investment in urban infrastructure, specifically benefitting the poor.

– Incorporating the poor more centrally in the infrastructure development process.

FIRE-D:APPROACHING URBAN REFORMS

• FIRE-D provides both framework and guidelines on how to set priorities.

• While designing and implementing the various project development, institutional, policy, and legislative activities, the FIRE (D) Program employed an iterative process/project cycle.

FIRE-D:IMPACTS• Motivation and interest created in the cities without FIRE-D implementation to think

of alternative ways of financing urban infrastructure.

• Interest created amongst the financial institutions for funding urban infrastructure projects.

• Innovative urban management practices in some of the cities in terms of public-private partnerships (PPP).

• Changing the mind-set of planners, urban managers and policy makers relating to commercial viability of infrastructure and services like water supply, sewerage and solid waste management.

• The FIRE (D) concepts and tools have attracted other international donor agencies, financial institutions, project development boards and the private sector.

THANK YOU