Urban Infrastructure Investment Program (RRP IND 42265)

SECTOR ASSESSMENT (SUMMARY): MULTI-SECTOR

A. Roadmap for Water supply, Sewerage, and Solid Waste Management

1. Urban environment for economic growth. To unleash the economic growth potential of Assam, it is important to improve major urban services, such as water supply, sewerage, and solid waste management (SWM), as well as the urban transport system to improve the health of the urban population in the two largest cities, Dibrugarh and , and enable them to drive economic growth in Assam.

2. Urban sector performance in Assam. A study of the status of urban water supply, sewerage, and SWM service delivery in 13 economic centers of Assam revealed that performance was very poor and varied substantially from one town to another.1 Most performance indicators were below national averages, as indicated in para. 3 and Table 1 of the report and recommendation of the President.

3. Analysis of sector performance in Dibrugarh and Guwahati. Performance indicators show poor coverage, quantity, and duration of urban services for lack of adequate urban infrastructure, caused mainly by inadequate new investments and poor funding for operating and maintenance (O&M) costs arising from the following: (i) User charges. Guwahati urban local body (ULB) charges a flat rate for water supply, and Dibrugarh ULB does not levy a charge for water supply services, leaving both ULBs unable to recover O&M costs. The Public Health Engineering Department of the state government and the Assam Urban Water Supply and Sewerage Board operate minor water supply systems that together cover 8% of population of Guwahati and levy very low user charges that are too low to fully recover O&M costs. (ii) Accounting practice. Even when ULBs start levying user charges, the absence of a ring-fenced account for each urban service inhibits the accumulation of internal reserves for future major investments and results in failure to expand infrastructure commensurate with demographic growth. (iii) Human resources. Staff numbers, whether in the Public Health Engineering Department or in ULBs, are too small to provide water supply and sewerage services that attain national goals. ULBs also face difficulty attracting qualified personnel and find it hard to attract financing from external aid agencies and the private sector. (iv) Public administration. The absence of the municipal civil servant system across ULBs makes it difficult to accumulate human capital with skills and knowledge on O&M.

4. Roadmap for achieving performance targets. To achieve national and state targets on water supply, sewerage, and SWM services, a roadmap with specific solutions to help meet those goals was prepared with the assistance of the Asian Development Bank (ADB), as shown in Table 1. The roadmap envisages (i) steep improvement in all performance targets between 2011 and 2021 and (ii) the continued evaluation of services in terms of quantity and quality. The key targets by 2021 are in Table 1.

1 Water supply coverage ranged from 0% to 32% of the town population; water supply quantity was from 0 to 80 liters per capita per day; water supply duration was from 0 to 2 hours per day; sewerage coverage was 0%; waste collection covered from 56% to 70% of the town population; and there was no landfill site, so collected wastes were illegal dumped. 2

Table 1: Roadmap for Achieving Performance Targets in Two Subproject Towns 2011 2021 National & baselines targets state targets Water supply Supply coverage (% of population) 15-30 95 94-100 Quantity per capita per day (lpcd) 50-80 135 135 Duration per day (hpd) 1-2 24 24 Non-revenue water (% of water produced) 40 15 20 Metered connections (% of connections) 0-5 95 10 Sewerage Sewer coverage (% of population) 0 70 70-100 Septic tank (% of population) 45-82 30 n/a SWM Collection coverage (% of population) 70-85 100 100 Recycling (% of collected waste) 0 60-75 n/a Sanitary landfill (% of remaining waste) 0-10 100 100 lpcd = liters per capita per day, hpd = hours per day, n/a=not available, SWM=solid waste management. Sources: Ministry of Urban Development, Guwahati Development Department, Urban Development Department (Dibrugarh)

5. Importance of roadmap. Achieving the targets of the roadmap will positively influence growth, poverty reduction, gender and development, and inclusiveness, as well as improve public health, raise productivity, and minimize gaps in access to services between men and women.

6. Key partners in roadmap implementation. The Guwahati Municipal Corporation Act, 1969 and Assam Municipalities Act, 1956 conferred all mandates for water supply, sewerage, and SWM on ULBs. ULBs are entitled to levy user charges and have the option of entrusting to third parties asset creation and O&M on their behalf. There is no overlap of mandates and responsibilities among state agencies and ULBs.

B. ’s Policy Framework

7. To create a sustainable environment for ADB’s physical investment in water supply, sewerage, and SWM, the two towns, in collaboration with the Government of Assam, are undertaking reforms as recommended under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), including (i) formulating and adopting a policy on user charges; (ii) establishing proper targets for subsidies; (iii) establishing an administrative advisory body for recommending user charge structures; (iv) migrating to a double-entry, accrual-based accounting system; (v) establishing accounts dedicated to water supply and sewerage operations; (vi) installing billing software to initiate user charging and training staff on its use; (vii) increasing O&M staff numbers for optimal operations; and (viii) helping O&M staff of ULBs acquire higher skills.

8. Need for further physical investment. The Government of India has been the most prominent financier in Assam through the various national schemes. As Table 2 shows, the physical investment requirements for the water supply, sewerage, and SWM subsectors under the roadmap in Dibrugarh and Guwahati are estimated at Rs32.9 billion. The centrally sponsored JNNURM, Urban Infrastructure Development Scheme for Small and Medium Towns, and other national and state budgetary allocations are available but inadequate to meet the investment requirement. The urban services investment program in Guwahati of $575.36 million, combining ADB, the Japan International Cooperation Agency (JICA), and the JNNURM, covers 44% of the total investment requirement of $1.3 billion for the 13 largest cities in Assam. 3

Similarly, the investment program for urban transport in Guwahati, at $205.12 million, accounts for 20% of the total urban transport investment requirement of more than $1.0 billion for the 13 largest cities.

Table 2: Source of Financing for Two Towns (Rs million) Centrally ADB Balance of Sponsored Investment Funding to be Sector Total Schemes State Plan Program (MFF) Identified Water supply 12,760 8,005 0 3,160 1,595 Sewerage 4,114 2,314 0 1,800 0 Drainage 14,859 12,434 0 2,425 0 Solid waste 1,184 904 0 280 0 Total 32,917 23,657 0 7,665 1,595 ADB = Asian Development Bank, MFF = multitranche financing facility. Sources: Urban Development Department (Dibrugarh), Guwahati Development Department, and IND-TA 7747 consultant estimate.

9. Cost of sustaining urban services at government standards. Adequate qualified staffing for O&M is key to achieving performance targets and sustaining performance. Coupled with skills upgrading for existing staff, the two ULBs need to engage more staff by the completion of the physical investment. For the Rs32.9 billion in investments, the estimated annual O&M cost is $350 million upon completion.

10. Investments in capacity development for meeting 2021 targets. To maintain service standards and financially sustain operations, the roadmap demands human resource development and improvements in financial governance and the management of water supply, sewerage, and SWM operations. In Guwahati, comprehensive institutional strengthening and capacity building in the Guwahati Metropolitan Water Supply and Sewerage Board (GMWSSB) is proposed under JICA-financed Institutional Capacity Development Consultancy (ICDC) over 6 years, requiring $5 million in capacity-building assistance. GMWSSB will take over and operate the water supply assets created under ongoing JNNURM- and JICA-assisted projects, as well as the water supply and sewerage assets in southeast Guwahati created with ADB assistance. In addition, capacity development technical assistance will complement the ICDC. The ICDC will strengthen the capacity of GMWSSB to become an autonomous entity with institutional; planning and monitoring; maintenance; and finance, accounting, and budgeting functions. 3

Regarding the Water Regulatory Authority, the ICDC will build monitoring and regulatory functions to establish performance targets; procedures for performance auditing; institute public information disclosure and its methodology; establish a framework for protecting consumer interests and public health; establish a procedure for tariff revision; conduct financial auditing; establish a procedure for environmental monitoring; and formulate a midterm plan for developing regulatory functions.

C. Roadmap for the Urban Transport Subsector

11. In recent years, there has been a very rapid increase in the numbers of motor vehicles on Guwahati’s roads, causing congestion and pollution. Key constraints include (i) a limited road network of only 218 kilometers (km) within Guwahati city with insufficient right of way, vehicles parked on road shoulders and sidewalks, illegal construction and encroachment into the right of way, and very poor traffic management; (ii) inadequate urban public transport comprising a heterogeneous mixture of private and state-owned buses, auto rickshaws, and minivans, etc.,

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which fails to meet current passenger demand in the city; (iii) poor traffic management and enforcement; (iv) poor pedestrian facilities; and (v) insufficient parking.

12. Roadmap of the Government of Assam to improve subsector performance in Guwahati. To address the issues raised above, the state government has undertaken a number of studies, one of which, a master plan for Guwahati, was prepared in 2009. It lists six main goals: (i) conserve the natural environment; (ii) develop an integrated multimodal transport system with three mass transit lines; (iii) develop physical and social infrastructure for education, health care, and cultural development, as well as water supply and solid waste management; (iv) provide space for efficient economic activity; (v) create an image befitting a state capital; and (vi) provide affordable housing and remove slums.

D. ADB’s Strategic Roles in the Roadmap

13. The country partnership strategy and ADB’s assistance program for 2009–2012 have been designed to support the Government of India’s efforts to address binding constraints on India’s Eleventh Five-Year Plan, April 2007–March 20122 through four strategic pillars.3 One of the strategic pillars emphasizes continuing ADB’s assistance to infrastructure development in various sectors, including urban services. To help the Government of Assam achieve the goals set out in the road map, ADB will assist the two towns in attaining the national standards for water supply, sewerage services, drainage, solid waste management, and public transport through physical and other investments based on the following principles: (i) ADB’s physical investments will bridge the financial shortfall in water supply and sewerage infrastructure improvement and aim to develop complete systems covering entire cities by complementing other ongoing investments. (ii) ADB’s physical investments will support financing a portion of large sewerage infrastructure improvements, and other financiers are expected to undertake the remaining portions identified by the Government of Assam. (iii) ADB’s assistance will rehabilitate the flood protection system in Dibrugarh and improve solid waste management in the city. (iv) The implementation of a pilot bus rapid transit corridor in Guwahati will integrate the improvement of other municipal services and facilities, such as drainage, feeder roads, street lighting, the accommodation of pedestrians and cyclists, traffic management, and parking. Greenhouse gas emissions and congestion will be mitigated, and public spaces, air quality, and safety will be improved. Joint or parallel financiers will be brought in to leverage ADB’s investment. (v) ADB’s assistance will complement capacity development in the urban services sector by establishing a regional knowledge center to cater to the needs of the smaller ULBs.

2 India’s Eleventh Five-Year Plan, April 2007–March 2012 has set out 27 national targets covering economic and social goals: (i) clean drinking water to be available to all by 2009, ensuring that there is no slippage by the end of the plan, and (ii) all urban wastewater to be treated within 2011 and 2012 to clean up rivers. The plan recognizes infrastructure bottlenecks and the lack of long-term funding for infrastructure investment as binding constraints on achieving the goals. The plan calls for public sector investment to meet infrastructure requirements unlikely to be met by the private sector. 3 The four strategic pillars are (i) support for inclusive and environmentally sustainable growth, (ii) catalyzing investment through the use of innovative business and financing solutions, (iii) strengthening results orientation, and (iv) emphasizing knowledge solutions and support for regional cooperation.

PROBLEM TREE

Significant impact on the quality of life and economic well-being of citizens

Infrastructure created but Inadequate infrastructure Economically weaker services not delivered & groups, particularly women maintenance neglected & children, bear the major impact of lack of services

Lack of investment in urban infrastructure, Problem poor basic urban services, and unsustainable urban transport system

Low user charges and Water, wastewater, solid Fragmented plans and Rapid motorization, poor low revenue generation waste poor implementation traffic management, & no disposal , and urban strategic road framework transport sectors not getting adequate funding or investment

Unwillingness to charge Unwillingness or inability Poor municipal finances Lack of capacity in urban Lack of a reliable and safe to pay full costs local bodies to plan, public transport system, a Implement, or manage weak regulatory framework, infrastructure services & constrained design and maintenance

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Table 6: Sector Results Frameworka for Assam Urban Infrastructure Investment Program (Multi-sector, 2011–2021) Country Sector Outcomes Country Sector Outputs ADB Sector Operations Sector Outcomes Indicators with Targets Sector Outputs with Indicators with Planned and Ongoing Main Outputs Expected from withADB Contribution and Baselines ADB Contribution Incremental Targetsb ADB Interventions ADB Interventions ADB’s urban sector Drinking water quality WTP constructed. WTP capacity i. Planned key activity i. Planned key activity areas operations will support improved and average New Water supply increased by 508 mld. areas WTP capacity increased. the Government effort by: duration of supply network constructed. Water supply network Water supply and Water supply network Improved urban services increased from the 2 sewerage increased STP constructed. increased by 1,450 at the standards set by hours to 24 hours per day km. Urban governance STP capacity increased. the Government in the by 2018 in the Investment Sewer network reform for asset Sewer network increased. constructed. STP capacity project cities. Program area in increased by 520 mld. sustainability BRT enabled road network GuwahatiWater supply Public-transport Sewer network increased. coverage increases from system improved through BRT corridor. increased by 1500 MSW disposal capacity 30 to 95% of population in km. increased. the Investment Program MSW management BRT enabled road Improved urban drainage area in Guwahati by infrastructure improved. network increased by 2018. 50 km. Sewer network coverage Urban drainage increases from improved. MSW disposal 0% to 95% in the South capacity increased by 600 metric tonnes per Eastern Water Supply Zone by 2018 in day. Guwahati. 200 kms of drains Transport Sector CO2 rehabilitated. emissions decreases by ii. Planned projects ii. Planned projects with 20% with estimated estimated targets Dibrugarh Solid waste amounts WTP capacity increased by 88 collection improved from Assam Urban mld. 30% in 2011 to 80% in Infrastructure Water supply network 2018 with 25% recycling, Investment Program increased by 250 km composting with sanitary ($285.8 million) STP capacity increased by 160 disposal of waste. mld. Frequency of major Sewer network increased by flooding in Dibrugarh 380 km. decreased from annual to BRT enabled road network once in 10 years. increased by 10.5 km.MSW disposal capacity increased by 60 metric tonnes per day. 23 kms of drains rehabilitated. BRT = bus rapid transit, CO2 = carbon dioxide, km = kilometer, mld = millon liter per day, MSW = municipal solid waste, WTP = water treatment plant, STP = sewage treatment plant Notes: a ADB. 2010. Preparing Results Frameworks and Monitoring Results suggests “the structure of the results frameworks and the underlying results chain can be adapted to different geographical scales, i.e., regional cooperation strategies or state- and/or provincial-level strategies (if ADB’s operations in a country focus on a state or province).” Therefore, this sector result framework focuses on Assam’s multi-sector. b The incremental targets are based on the top 13 largest towns of Assam. Sources: ADB. 2009. India Country Partnership Strategy 2009-2012. ADB. 2010. Small-scale Project Preparatory Technical Assistance for Preparing Assam Urban Infrastructure Project. Manila. Asian Development Bank estimates.