Morbi Tragedy | Cities need control over assets, focus on long-term governance

Nearly 500 people were killed in a bridge collapse incident in Gujarat's Morbi. (Image: AP)

A 143-year-old bridge in Morbi, in Gujarat, collapsed under the weight of about 500 people just five days after its reopening. Why were 500 people allowed on a colonial-era bridge with a capacity of 125, why was the contract given to a watch and electric vehicle manufacturer, why did the civic authority not insist on a safety certificate before allowing it to open, and a host of other questions are being discussed now. However, why was the private contractor given a 15-year contract with a specific clause that no agency — private or municipal — has the power to ‘interfere’?

Municipal governance has been a long-neglected area of city management in India. Only when the Smart Cities Mission launched in 2015, and its earlier avatar, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), did the idea of civic governance and municipal management gain credence in India. However, while lateral entry of professionals and experts got the projects off the ground in many instances, contract documentation for municipal services remained a relatively new art in the country.

No Funds: Centrally-sponsored missions offered cash allocations to the cities directly to execute projects that should have been done long ago. In many cases, till the late 1990s, cities had 18 listed functions to execute but the internal receipts plus state allocations accounted for merely 3-4 functions. With little or no money to execute the rest, they remained largely neglected.

Now with the centrally-sponsored mission mode schemes in the cities, commissioners and other city officials had to execute projects worth crores with the private sector as the executing partner. As unequal partners in this alliance, many city managers sweeten the deal with clauses often inserted by the private parties to either safeguard their interests, or to make the project more remunerative. Thinking through the long-term effects of the executed contract is a skill that Indian city managers still need to master. Most bureaucrats are posted in a city for a period of 3-5 years. The one drawing the contract is often well out of the scene before the project can be executed, and commissioned.

In 2006, then municipal commissioner of Delhi fought the issue of overbuilding in Lal Dora (village lands) in Delhi, and won the case. His argument was that in the event of a casualty, it would be the municipal authority that has to provide rescue and relief measures. On the strength of this argument, he won the case.

Waste To Wealth: Few commissioners capitalised on this win. Municipal services need not always be a drain on the resources of the city. For instance, waste to wealth is a well-acknowledged fact around the world. In Singapore, Sembcorp has been a poster child of how to convert trash to cash. However, in major and minor cities of North India, including Gurugram, Faridabad, Gwalior, and Lucknow concessionaire Ecogreen has been given a contract for over 20 years!

On the basis of this long-term contract, the correct tipping point for house-to-house payment has been fixed at Rs 60 per household. However, the service was neither efficient nor comprehensive in Gurugram, and the nine other agencies that have been given collection rights for garbage in the city find it difficult to manage on this meagre payment. The fact is that if it is processed well, there is a lot of money to be made. However Ecogreen has neither unlocked this value, nor has it managed an efficient waste management plan. A large part of the collected waste is dumped in the pristine Aravalli forests in Bandhwari, polluting soil and water.

DND Toll Giveaways: Now switch to the Delhi-Noida-Direct flyway from Delhi to Noida and back. Under the Build-Own-Operate-Transfer (BOOT) model, the concessionaire had been given a contract to not only build this key infrastructure, but also to collect toll to recover costs till 2031. However, after successively raising the toll from the original Rs 8 to Rs 28 per vehicle, after a public interest litigation initiated by resident associations, the toll was removed. The statement of the judge in this case is telling. “Going by the formula adopted in Article 14 of the concession agreement, the unrecovered cost goes on escalating and it would not be possible to achieve 100% returns of the total project cost even at the end of 100 years, what to talk of 2031.”

Municipal Bonds: After years of apathy, cities have suddenly come into the limelight. From no funds to excess funds, to be utilised in a limited period of time, project management and contract drafting has been a challenge. The COVID-19 pandemic also shifted the spotlight onto municipal commissioners as cities had to cope with their problems in a safe bubble. A post-pandemic analysis by the Reserve Bank of India showed that some like the Ghaziabad Municipal Corporation were able to identify corporate paying end users for water as a by-product of the Municipal Sewage Treatment Plant. By fixing the life cycle, the receivables and the operation and maintenance, the Ghaziabad authority was able to issue India’s first Green Bond for a municipal asset that it could monetise at a coupon rate of 8.1 percent. Globally municipal bonds became a lifeline for retail and institutional investors, especially during the pandemic with assured returns on the back of sound asset management.

A similar attitude by the Pune Smart City Authority in redesigning roads in the chosen Smart City areas ensured citizen participation, change in social behaviour as weekend cycling became the norm, and creation of utility tunnels over which hard-topping of the surfaces gave enough space for footpaths and cycling tracks. This kind of improvisation is only possible if earlier contracts have not signed off municipal assets to private executioners. With this project, Smart City CEO Sanjay Kolte found those areas of the city now attracting fresh private investment from builders. By planning the redesign to connect residential and retail hubs with upcoming metro stations, he has given a new long-term lease of life to those municipal assets.

A smart move in Morbi would have been to give the redevelopment of the colonial era bridge to a specialist, and retain the rights of management with itself. A picturesque bridge where citizens have memories of spending relaxed evenings, an upgrade would have allowed the city to capitalise on its social quotient. Instead it became a death trap because of poor execution of work, and weak crowd management. Expecting three guards to manage a crowd of 500 is certainly childish. It should have been the task of a city manager, and team.

Only when smart city managers understand the long-term value of municipal assets as potential income generators, will contract documents stop giving away the city’s rights to private concessionaires, for money to execute projects.

E Jayashree Kurup is Director Wordmeister Editorial Services, Real Estate & Cities. Views are personal, and do not represent the stand of this publication.