Under the framework of the Rs 1 lakh crore UCF, central assistance is capped at 25% of the eligible project cost, while at least 50% must be mobilised through market sources, including bank loans, municipal bonds and public-private partnerships (PPPs).
Suraj said the state would prioritise PPPs and loans over municipal bonds, which require strong financial credentials and a more elaborate compliance and credit-rating process. “Municipal bonds will be difficult for us. They require an elaborate structure, including credit ratings and compliance with the prescribed criteria. It is suitable only for fiscally disciplined, high performing local bodies,” he said.
The state is exploring loans from non-banking financial companies, scheduled commercial and cooperative banks, HUDCO and institutions under NABARD. The state is considering projects to address congestion and infrastructure gaps in cities. Proposals could include widening critical road stretches, constructing parking facilities in congested areas, underground ducting to remove overhead electric poles and tangled cables, and expanding sewage networks.
The state’s town and country planning department has already prepared various plans, including master plan updates, city beautification proposals and projects aimed at decongesting core urban areas.
“Creative redevelopment of cities is something Keralam can utilise well,” said a senior official of LSGD. The UCF covers three broad verticals — cities as growth hubs, creative redevelopment of cities, and water and sanitation. These include economic and transit corridors, urban mobility, redevelopment of old city centres and markets, water supply, sewerage, and integrated solid waste management.