By V Suresh, Chairman & Managing Director, HUDCO

India no longer lives in its villages alone. At the dawn of the new millennium, 305 million Indians reside in nearly 3700 towns and cities of the country. It means 30% of the population live in urban areas, in sharp contrast to only just 15% (i.e.60 millions) in the year 1947.During the last 50 odd years the population of India has grown two and a half times, whereas the urban population has grown nearly five times.

“Housing for all ”has been identified as a priority area in the National Agenda for Governance of the present government. Despite the die-hard efforts since independence, the nation has been unable to cope up with the burgeoning need of shelter to the households of the country. As per estimates, India’s population has crossed the 1 billion mark on 11th May, 2000 and by the year 2021, the population will exceed 1.35 billion. These precarious situations will not only lead to the shortage of decent shelter but also food grains, water, power, proper infrastructure etc. HUDCO emerges as the only organisation of its kind to deal with the growing demand of shelter and infrastructure development in the human settlements and make available its techno-financial assistance to benefit the vast multitude of the city and village population, simultaneously earning admirable profits.

Housing and Urban Development Corporation Ltd. (HUDCO) was incorporated on 25th April, 1970 as a fully Government owned enterprise, as an expression of Government’s concern to the deteriorating housing conditions in the country, particularly of the weaker sections. Starting with an initial equity of Rs.2 Crores, HUDCO has grown to an authorized capital base of Rs. 1250 Crores and net worth of Rs.1881 Crores. HUDCO has emerged as the only techno-financing organisation of its kind to deal with the growing demands of shelter and infrastructure development benefitting the teeming millions of urban and rural population. HUDCO envisions “emerging as the market leader in supporting the housing and urban development needs of the 21st century with the right choice of options for policies, programmes, projects and also building it through the right level of institutions in all shade of sectors; namely, public, private, corporate, co-operative, community and individual”. The motto of the organisation is to ensure profitability without compromising on distributional equity and social justice.

HUDCO has achieved a significant milestone by crossing the one crore mark, in facilitating the construction of over 123 lakh dwelling units all over the country with its techno-financial assistance. HUDCO has become the largest facilitator of housing units across the globe, accounting of around 1/15th of the total housing stock in India. HUDCO has already sanctioned 14816 projects with a project cost of over Rs. 53,626 Crores (US$ 11,657 million) involving a financial assistance of Rs. 34,855 Crores (US$ 7,577 million). HUDCO assistance has benefited over 5.2 lakh plots and 46.4 lakh sanitation units covering over 1762 towns and numerous villages. Supplementing the efforts of the Government, HUDCO’s contribution to the additional two million housing programme includes financial assistance for construction of 21.79 lakh units in two years, against its target of 20 lakh units under the programme.

In a bid to extend its role from institutional financing to individual financing, HUDCO opened the retail-lending window for housing in 1999. The individual housing finance sector received a major resurgence with HUDCO’s foray into individual financing loan scheme with “HUDCO-Niwas” offering affordable terms and value added services. After creating history in the first year of operation, the cumulative sanctions under HUDCO Niwas have already crossed Rs.1500 crores accounting for over 2 lakh applicants.

In the fiscal 1999-2000, HUDCO achieved enormous amount of success in the operational performance, expansion of its equity base, and foreign tie-ups in green field areas. During 1999-2000 HUDCO has achieved an all time high sanctions of Rs. 8899.89 crores, 33.5% more than the previous year’s achievement of Rs. 6666.67 crores. Assistance was provided for construction of 16.34 lakh dwelling units and over 1.8 lakh sanitation units, besides 86 urban infrastructure projects throughout the country. The loan released during 1999-2000 amounted to Rs.4412.4 crores, an increase of 38% over the last year.

In building materials and technology, HUDCO supports a network of 573 building centres in a bid to promote the dissemination of cost-effective building materials and transfer of appropriate technology from lab to land. Unique programmes like Adarsh Gram (model villages) and Adarsh basti (model improved slums) showcase a host of the appropriate infrastructure inputs and alternative technologies with a convergence approach. The Human Settlement Management Institute (HSMI) functions as the research and training arm of HUDCO extending capacity building efforts to several national and international agencies and functionaries of local bodies.

The Ninth Plan Working Group on Housing has estimated the investment requirement for housing in urban areas at Rs.121,370 Crores. The India Infrastructure Report estimates the annual investment need for urban water supply, sanitation, and roads at about Rs.250,000 Crores for the next ten years. The Central Public Health Engineering Organisation (CPHEEO) has estimated the requirement of funds for 100 percent coverage of the urban population under safe water supply and sanitation services by the year 2021 at Rs.172,905 crores. Estimates by Rail India Technical and Economic Services (RITES) indicate that the amount required for urban transport infrastructure investment in cities with population of 100,000 or more during the next 20 years would be of the order of Rs.207,000 crores. Unless a good agenda for governance is also in place for making cities clean, hygienic and environmentally sound, the urban areas would be heading for a major crisis. The private sector investment for provisions of urban and rural infrastructure can’t take place until a proper legal and regulatory framework for such investment is created and developed which could ensure the full cost recovery of such an investment. This gap has so far been bridged predominantly by HUDCO - the only crusader for fulfilling the infrastructural demands of the growing urban and rural population of India.

 Urban Infrastructure

HUDCO: URBAN
INFRASTRUCTURE FINANCING
CROSSES Rs. 14352 Cr (US$ 3.1 B)
*** in just 11 years ***
(Rs. in Crore)

Type of Scheme	No.	Project Cost	Loan Amt.	(US)(M$)
UTILITY INFRASTRUCTURE
Water Supply	315	7178	3725	810
Sewage, Dranage & Sanitation	64	1702	1319	287
Low cost Sanitation	1034	1384	628	136
Solid Waste MAnagement	26	433	240	52
Transport Nagar/Terminals	27	1388	786	171
Road/Bridges	90	4625	3231	702
Airports/Ports	8	731	386	84
Area Development & IDSMT	135	2591	1694	368
Social Infrastructure	96	2416	1704	371
Economic Infrastructure	69	1285	638	139
Total	1864	23740	14352	3120
VS/CET			(US$ 3.1B)

Water Supply Schemes: During the fiscal year 1999-2000, nearly 86 urban infrastructure projects have been sanctioned with project cost of Rs.5500.33 crores. The HUDCO loan component is Rs. 4138.89 crores, which is 56% higher than the previous year. These projects consist of many infrastructure areas including 14 projects of water supply with total cost of Rs.876.36 crores and loan amount of Rs.505.11 crores. The recent projects in water supply include the augmentation of Nagpur water supply scheme, water supply scheme at Dewas (MP), construction of Raska Weir Water Supply project at Ahmedabad, augmentation of water supply scheme at Pemem (Goa), the Cauvery Water Supply Scheme Stage IV at Bangalore and water supply scheme at Tirupati. HUDCO has also provided a financial assistance of Rs. 160 crores to Tamil Nadu Water Supply and Drainage Board for provision of water supply facilities to 4457 habitations in Tamil Nadu. HUDCO has provided a Line of Credit of Rs. 800 Crore for infrastructure projects under flood rehabilitation in West Bengal and Rs. 200 Crore for infrastructure development activities in Rajasthan.

An integrated water management policy has to be implemented which will provide solution to the acute shortage of water, as it exists currently in many parts of the country including Gujarat and Rajasthan. With emphasis on integrated water management, HUDCO has assisted the Rainwater harvesting project for Shantigiri Ashram at Pothencode near Thiruvananthapuram. Further, the HUDCO assisted water recycling project at Bangalore envisages construction of 60 mld capacity tertiary water treatment plants and 10mld capacity composite sewerage treatment plant comprising primary, secondary and tertiary treatment components. The recycled water will be used for industrial purposes and for processing boiler feed, air conditioning coolants, sanitary purposes, fire-protection, lawn sprinklers, gardening etc. The scheme would help the saving of substantial quantum of treated water for domestic use, which hither too was being diverted to industrial and other uses.

Social infrastructure: HUDCO continued its thrust towards sanctioning various schemes of significant social relevance that enable enhancement of the quality of life in urban areas. During the financial year 1999-2000, 14 social infrastructure schemes worth Rs. 442.72 crores have been sanctioned. The significant projects include 3 major hospitals at Vijayawada, Indore, and Delhi. 8 educational facilities at Khargaon (MP), Hyderabad, Ghaziabad, Bangalore, Greater Noida, Bhopal, Noida and Namakkal (Tamil Nadu) have also been funded by HUDCO.

Waste Management and Energy Efficient Projects: