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The World Bank Documentof The World Bank FOR OFFICIAL USE ONLY A?v 3hf I- i#/ Public Disclosure Authorized 4Z 2 / I/ /A/ ReportNo. 7501-IN STAFF APPRAISAL REPORT INDIA Public Disclosure Authorized HYDERABAD WATER SUPPLY AND SANITATION PROJECT JANUARY 4, 1990 Public Disclosure Authorized Population, Human Resources, Urban and Water Division Public Disclosure Authorized India Department This documenthas a restricteddistribution and may be used by recipientsonly in the performanceof their official duties. Its contents may not otherwisebe disclosed withoutWorld Bank authorization. CURRENCYEOUIVALENTS CurrencyUnit - Indian Rupee (Rs) US$ 1.00 - Rs 16.00 Rs 1.00 - US$ 0.077 MEASURES AND EOUIVALENTS mm - millimeter (1 millimeter - 0.03 inches) m - meter (1 meter - 3.28 feet) km - kilometer (1 kilometer - 0.62 miles) 2 km - square kilometer (1 km2 _ 0.368 square miles) ha - hectare (1 hectare - 10,000 square meters - 2.47 acres) 1 - liter (0.22 Imperial gallons or 0.264 US gallons) lcd - liters per capita per day ms3 - cubic meters (220 Imperial gallons or 264.2 US gallons) Ml - million liters Mld - million liters per day (0.220 million Imperial gallons per day or 0.264 million US gallons per day) mgd - million (Imperial)gallons per day (1 mgd - 4,545 m3 per day) TMC - thousand million cubic feet (per year):lTMC-28.317MCM-77.58Mld MCM - million cubic meters (per year):l MCM - 0.0353 THC - 2.74 Mld ABBREVIATIONS AND ACRONYMS AC - Asbestos Cement AIC - Average IncrementalCost CI - Cast Iron CPHEEO - GOI's Central EnvironmentalEngineering Organization in MUD DHMAUD - GOAP's Department of Housing, MunicipalAdministration and Urban Development GI - Galvanized Iron (Steel) GOAP - Government of Andhra Pradesh GOI - Government of India HMWW - Hyderabad Metropolitan Water Works HMWSSB - Hyderabad Metropolitan Water Supply and Sewerage Board LCS - Low Cost Sanitation MCH - Municipal Corporation of Hyderabad MS - Mild Steel MUD - GOI's Ministry of Urban Development OAP - Operational Action Plan ODA - Overseas Development Administration of the United Kingdom PHED - GOAP's Public Health Engineering Department within DHMAUD PSC - Prestressed Concrete RCC - Reinforced Cement Concrete RRP - Resettlement and Rehabilitation Program SPS - Sewage Pumping Station STP - Sewage Treatment Plant UCDD - MCH's Urbar. Community Development Department UNDP - United Nations Development Program WHO - World Health Organization WPS - Water Pumping Station WTP - Water Treatment Plant FISCAL YEAR April 1 - March 31 International Bank for Reconstruction and Development Intemational Development Association FOR OFFICIAL USE ONLY' FOR EXECUTIVE SPECIAL PROCEDUR For consideration on DIRECTORS' Tuesday, March 27, 1990 MEETING R90-41/1 IDA/R90-31/1 FROM: Vice President and Secretary March 8, 1990 INDIA: Hyderabad Water Supply and Sanitation Project Staff Appraisal Report (Report No. 7501-IN) CORRIGENDUM The President's Memorandum and Recommendation (R90-41[IDA/R90-31]dated March 7, 1990) on a proposed loan and credit to India for the Hyderabad Water Supply and lanltation Droject, together with the Staff Appraisal Report,was distributed for consideration by the Executive Directors on March 27, 1990. Please note the following revisions to the Staff Appraisal Report: Pages Paragraphs Change 45, 51 5.07 and 7.01(5) Date from March 31, 1990 to June 30, 1990 47, 52 5.15 and 7.01(10)(b) Date from March 31, 1990 to Sept. 30, 1990 Distribution: Executive Directors and Alternates President Senior Vice Presidents Senior Management Council Vice Presidents, IFC Directors and Department Heads, Bank and IFC This docLi iment has a restriceddisIh ultil anld nIn-I he ut ed )s rcL cInl ' I,t Iel : )rnbmn X ot t'il oitth ial dutics. 1t\ ciltClit 11.1\not othcrn1 i. c di1, < ' ' \\ od IdBnkI SLihOri/ati01l. 10 OFFICmaALWI ONLY IND HYLERABAD WATER SUPPLY AND SANITATION PROJECT STAFF APPRAISAL REPORT Table of Contents ,PageNo. CREDIT AND PROJECT SUMMARY ................................ iv-v I. THE WATER SUPPLY AND SANITATION SECTOR IN INDIA ........... 1 Sector Context ............................................ 1 II. THE SECTOR IN ANDHRAPRADESH AND HYDERABAD .... ............ 3 The State of Andhra Pradesh ............................... 3 The Hyderabad Metropolitan Area ........................... 5 The Existing Water System and Level of Service ...... 5 The Existing Sewerage System and Level of Service ... 7 Prior and Ongoing Sanitation Programs .... .......... 8 Issues and Government Strategy ........................... 9 Water Supply ....................................... 9 Sanitary Sewerage and Sanitation .... ............... 10 Financial Issues ................................... 12 Institutional Tssties ..................... ill The Bank's Sector Role and Assistance Strategy in India 13 III. THE PROJECT .15 Project Origin and Ratiotnale for Bank Support .15 Project Objectives .21 Project Description .21 Dam Safety .26 Singur Drinking Water Supply Reliability .27 Project Costs and Financing Plan .28 Project Financing .29 Status of Preparation .30 Land Acquisition for the Project .31 Procurement .32 Disbursements .34 Implementation Schedules .35 Supervision and Monitoring .36 Accounts and Audits .37 This report is based on the findings of an appraisal mission whicl. visited Hyderabad in March 1988. This mission comprised Messrs. Christophe, Couzens (Senior Sanitary Engineer and Mission Leader), Norihiro Noda (Sanitary Engineer), Albert Kennefick (Financial Analyst), Lakshman Mahapatra (Consultant - Relocation and Resettlement Specialist) and Sunil Bhattacharya (Procurement Specialist). Thisdocument has a restricteddistribution and maybe usedby recipientsonly in the performance of their official duties. Its contents may not otherwisebe disclosedwithout World Bank authorization. -ii - Page No. IV. PROJECT ORGANIZAT N AND ......................... 37 Overview ....................................................37 Operational Action Plans ................. ...................38 Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB) ........ ............. .......................38 Present Organization ... 38 Project Management: The World Bank Project Cell .......... 39 Finance and Accounts ................. ..................41 Operations ........ ............. .......................41 Resettlement and Rehabilitation - Project Component 5 ........ 42 V. FINANCIAL ASPECTS ..................... ......................43 HMWW Revenue and Expenditure Trends ............ .............43 Water Tariffs ............................................... 44 Water Billing and Collection ............... .................45 Capital Receipts and Expenditures ............. ..............45 Materials Accounting and Management .......... .. .............46 ProjeCted Financial Performance .............. ...............46 Sewerage Service ........ ............. .......................47 VI. PROJECT BENEFITS AND RISKS ................ ..................48 General ..................................................... 48 Impact and Benefits for the Urban Poor ........ .. ............48 Economic Analysis ..................... ......................49 Project Risks ............................................... 50 VII. AGREEMENTS REACHED AND RECOMMENDATION ....................... 50 Conditions .................................................. 50 Recommendation .............................................. 52 Pag2 No. 1. The Sector Context in Andhra Pradesh and in Hyderabad 53 2. Bank Financed Water Supply-Sanitation, Urban and Urban Transport Projects in India .. 60 3. The Existing Water System - Rehabilitation (Component 2) 61 4. The Existing Sewerage System - Rehabilitation (Component 3) 71 5. Sanitation - Past Program Experience Component 4 . .so 6. Dam Safety at Singur .. 83 7. Resettlement and Rehabilitation Program (RRP) (Component 5) 89 8. Technical Assistance - Outline Terms of Reference Component 6 98 9. Persormel Training - Costs - Component 6 . .111 10. The Project Description (Costs, Schedules, Procurement) 115 11. Land Acquisition (Requirements, Status, Procedures) . .136 12. Drinking Water Yield Reliability from the Singur Reservoir 138 13. Local Procurement Procedures .. 148 14. Operational Action Plan .. 150 15. MCH Property Tax Structure .. 154 16. HMWSSB Financial Projections .. 155 17. Economic Aspects - Rates of Return .. 158 18. List of Selected Documents on the Project File .159 IBRD No. 20971 Water Supply and Transmission Systems (existing/proposed) IBRD No. 20972 Water Supply - Trunk Distribution System (existing/proposed) IBRD No. 20973 Sewerage System (existing/proposed) - iv - INDIA HMD&gW) W!,&TER SUPPLY ApD SEWERAGEPROJECT LOAN, CREDIT AND PROJECT SUMMARY Borrower: India, acting by its President. Beneficiaries:Government of Andhra Pradesh (GOAP),Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB). :Amount: IBRD Loan : US$10.0 million. IDA Credit: SDR 63.9 million (US$79.9million equivalent). Terms: IBRD Loan : 20 years including5 years of grace at standard variable interest rate. IDA Credit: Standard terms with 35 years maturity. On-Lending Terms: Governmentof India (GOI) to GOAP: As part of the central assistance to States for developmentprojects on terms and conditionsapplicable at the time. GOAP tu HMWSSB: Not less than 10.25% p.a. rate of interest, with repaymentover 25 years, includingfive years of grace. CI * cU] bear the foreign exehange risks. Project DescriRtion: The project would increaseHyderabad's water supply by 135 Mld, or about 23%, and would reduce the vulnerabilityof
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