The urban development ministry will soon be writing to states, outlining the contours of the scheme to avail assistance under the JNNURM for the purchase of buses for their urban transport systems. This one time measure is part of the second stimulus package, the assistance window for which expires in June this year, a move aimed at stimulating demand for the commercial vehicle segment.

“This special scheme will be limited to 63 mission cities only as identified under JNNURM. The broad outline of the scheme has been finalised and the ministry will write to the states in a day or two for updating their bus fleet and bus stops,” said urban development secretary M Ramachandran.

The scheme does not earmark any dedicated funds. The assistance will be determined as per state’s allocation as indicated by the Planning Commission. In addition, a provision of Rs 100 crore has been made for cities with a population of more than a million and Rs 50 crore for the rest. The ministry may ask the Planning Commission for additional funds in case the states exhaust this quota, Ramachandran said.

States hoping to avail these funds will also have to abide by certain riders in the form of reform agenda, a mandatory condition under JNNURM. “The states will have to come up with an Urban Transport Policy which specifies advertisement policy, parking policy, and institutional mechanism for fare determination. In addition, it will have to ensure certain per-requisites like separate lanes for buses and priority for public transport systems,” the secretary added.

The states will have to submit a detailed project report to the Centre, which will be appraised by the Central Sanctioning and Monitoring Committee of the urban development ministry.

The ministry has finalised March 31, 2008, as the last date for approving projects under this scheme. The state transport corporations may form a special purpose vehicle for the purpose and follow a transparent procurement procedure, he said.