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SMIFfing it out

July 16, 2013 by

Little is known about the Sustainable Municipal Infrastructure Financing – Tamil Nadu (SMIF-TN), a project that was launched in 2008 and under which a whopping Rs.500 crore has been made available to local bodies in Tamil Nadu. The project, which is slated to end this year, is being managed by the Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL). The SMIF-TN provides capital grants and project funding to eligible municipalities. One of the criteria for municipalities to be eligible for funds is significant. It states that more than 20 percent of project beneficiaries must be from the urban poor – people living below the poverty line. [1]  While this is an enabling provision in a funding programme, a preliminary scan of internet resources has revealed there is almost no information on how this scheme has been implemented.

Here is what I have managed to glean: the outlay under the SMIF-TN was divided into three components – Rs.422 crore was earmarked for the financing of urban infrastructure projects, Rs.13 crore for strengthening technical capabilities of municipalities and Rs.65 crore for a water and sanitation pooled fund. (See Table 1).

SMIF-TN Phase 1 (In crore)
Financing of Urban Infrastructure Loan to ULBs 271.20
Financing of Urban Infrastructure Capital Grants to ULBs 150.80
Technical Assistance Grant 13
Water and Sanitation Pooled Fund 65
Total 500

Table 1: Components of the SMIF-TN
Source:

Under the terms of the programme, municipalities can use these funds for water and sewerage projects, municipal solid waste management, storm water drains and urban transport infrastructure. To apply for a grant, municipalities have to submit applications through the Commissionerate of Municipal Administration or Commissionerate of Town Panchayats with a council resolution, detailed project reports and also details of the targeted low income population and the expected impact on their living standards.[2]

There seems to be no comprehensive list of projects funded by the SMIF-TN, and neither is there a list of municipalities that have accessed these funds.[3] All we know is that the capital grant component of the SMIF-TN has been committed to 13 projects, and is being disbursed periodically based on the progress of projects. A sector-wise utilisation of funds, that I chanced upon in the policy note of the Municipal Administration and Water Supply Department (MAWS) is presented in the table below. From the table it is clear that underground sewerage schemes have been sanctioned the most amount of money (38%) under the programme. Also, a large percentage (89%) of project costs of roads and storm water drains were met by loans and grants under the SMIF-TN.

  Sector Number of Projects Project Cost Loan Sanctioned Grant Sanctioned Total Sanctioned
1 Under ground sewerage schemes 2 244.89 83.45 78.54 161.99
2 Water Supply schemes 8 188.20 90.33 56.26 146.59
3 Roads and Storm Water drains 3 67.64 44.87 16.0 60.87
4 Briges 1 162.51 52.44 0 52.44
  Total 14 663.24 271.09 150.80 421.89

Table 2: Projects funded under SMIF-TN
Source: MAWS policy note – 2011-20212, Accessed June 26, 2013. http://www.tn.gov.in/maws/municipal_administration.pdf

So here are some of the issues with the SMIF-TN: Since, there is no information on the implementation of the project, it is impossible to ascertain how these projects have benefitted the urban poor. Or how they are even related to the urban poor? For instance, do the projects under the water and sanitation sector increase coverage to low income areas or provide subsidies? If the projects are being implemented in slums, then are these declared or undeclared?

Some internet trawling has revealed that in Chennai these funds are being used to clean up 29 lakes. A newspaper article mentions that one important challenge to this clean-up mission is going to be the removal of encroachments from the banks of these lakes.  It is likely, that the urban poor who live along the banks will be evicted.  But since the DPR is not available, it is difficult to say what the procedure for eviction, resettlement and rehabilitation will be. And anyway, how is this particular project – the cleaning of lakes –  going to ensure that 20% of its beneficiaries improve their standard of living? By contributing in a very general way to a cleaner environment for all citizens?

Clearly, too much about this programme is unclear. While there have been controversies about how big budgeted schemes like the JnNURM and UIDAI have been implemented, at least these schemes are committed to sharing data on implementation with civil society.  The SMIF-TN phase II was launched recently, with an outlay of 578 crore. Let’s hope that this time around we know where the money goes and how it is used.


[1]TNUIFSL Website, Accessed 26 June 2013, http://tnuifsl.com/gf1kfw.asp
[2]Ibid, Accessed 26 June 2013, http://tnuifsl.com/gf1kfw.asp
[3]From government orders, some of the municipalities that have accessed funds under the SMIF-TN include Pallipalayam, Villipuram, Tiruchirapalli, Panruti, Erode, Tirunelveli, Tirrupur, Thanthoni, Kadayanallur.

Written by Vinaya Padmanabhan, researcher, Transparent Chen