Kerala Sustainable Urban Development Project

Home , Aluva, Ambalamugal, Angamaly, Chilavannoor, Chittoor Road, Cochin Shipyard

Government of Kerala Local Self Government Department

(PPTA 4106 – IND)

FINAL REPORT

VOLUME 2 - CITY REPORT

KOCHI

MAY 2005

COPYRIGHT: The concepts and information contained in this document are the property of ADB & Government of Kerala. Use or copying of this document in whole or in part without the written permission of either ADB or Government of Kerala constitutes an infringement of copyright.

TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation

FINAL REPORT

VOLUME 2 – CITY REPORT

KOCHI

Contents

1. BACKGROUND AND SCOPE 1 1.1 Introduction 1 1.2 Project Goal and Objectives 1 1.3 Study Outputs 1 1.4 Scope of the Report 1 2. CITY CONTEXT 2 2.1 Geography and Climate 2 2.2 Population Trends and Urbanization 2 2.3 Economic Development 2 2.3.1 Sectoral Growth 2 2.3.2 Industrial Development 6 2.3.3 Tourism Growth and Potential 6 2.3.4 Growth Trends and Projections 7 3. SOCIO-ECONOMIC PROFILE 8 3.1 Introduction 8 3.2 Household Profile 8 3.2.1 Employment 9 3.2.2 Income and Expenditure 9 3.2.3 Land and Housing 10 3.2.4 Social Capital 10 3.2.5 Health 10 3.2.6 Education 11 3.3 Access to Services 11 3.3.1 Water Supply 11 3.3.2 Sanitation 11 3.3.3 Urban Drainage 12 3.3.4 Solid Waste Disposal 12 3.3.5 Roads, Street Lighting & Access to Public Transport 12 4. POVERTY AND VULNERABILITY 13 4.1 Overview 13 4.1.1 Employment 14 4.1.2 Financial Capital 14 4.1.3 Poverty Alleviation in Kochi 14 5. INSTITUTIONS, MANAGEMENT AND CAPACITY 15 5.1 Decentralization 15 5.2 Service Delivery and Inter-Agency Coordination 15 5.3 Organization Structure of the Municipal Corporation 17

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5.3.1 Deliberative/Executive Wing 17 5.3.2 Administrative Wing 18 5.4 Capacity Building 21 6. MUNICIPAL FINANCE 24 6.1 Municipal Fund 24 6.2 Revenue Account 24 6.2.1 Revenue Receipts 26 6.2.2 Revenue Expenditures 32 6.3 Capital Account 33 6.3.1 Capital Receipts 34 6.3.2 Capital Expenditures 34 6.4 Key Financial Issues 35 6.5 Kerala Water Authority Finance 36 6.5.1 Mandate and Sources of Finance 36 6.5.2 Cost Recovery 37 6.5.3 KWA Financial Performance in Kochi 38 6.5.4 Key KWA Financial Issues 39 7. URBAN PLANNING AND LAND USE MANAGEMENT 41 7.1 Planning Efforts in the Past 41 7.2 Land Use Management 42 7.2.1 Land Use Pattern 42 7.2.2 Development Pattern 43 7.2.3 Key Issues 45 8. SUBPROJECT RATIONALE - NEED AND DEMAND 46 8.1 Approach to Subproject Selection 46 8.1.1 Municipal Corporation Priorities 46 8.1.2 Community Priorities 46 8.2 Subproject Objectives and Component Selection Criteria 46 9. URBAN INFRASTRUCTURE SERVICES 47 9.1 Water Supply 47 9.1.1 Development of Water Supply 47 9.1.2 Treatment and Transmission 47 9.1.3 Storage and Distribution System 48 9.1.4 Unaccounted for Water 50 9.1.5 Existing Water Tariff and Collection Performance 50 9.1.6 Operation and Maintenance 51 9.1.7 Proposed Water Supply Project 51 9.2 Sanitation and Sewerage 55 9.2.1 Existing Sewerage System 55 9.2.2 Existing Sanitation System 56 9.2.3 Service Adequacy and Key Issues 57 9.2.4 Design Criteria 58 9.2.5 O&M Staff Requirements 58 9.2.6 Project Identification 58 9.3 Urban Drainage 61 9.3.1 Existing Situation, Service Adequacy and Key Issues 61 9.3.2 Project Identification 62 9.4 Solid Waste Management 66 9.4.1 Present Situation Analysis – Municipal Solid Waste 66 9.4.2 Proposed Solid Waste Management Component 69 9.5 Roads and Transportation 74

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9.5.1 Overview 74 9.5.2 Existing Roads 76 9.5.3 Urban Travel Demand and Traffic Characteristics 80 9.5.4 Road Safety 84 9.5.5 Existing Street Lighting 85 9.5.6 Existing Access to Public Transport 86 9.5.7 Roads and Transportation Scheme Selection 87 10. THE PROPOSED SUB-PROJECT 89 10.1 Project Purpose 89 10.2 Part A: Urban Infrastructure Improvement 89 10.2.1 Water Supply Component 89 10.2.2 Sewerage and Sanitation Component 90 10.2.3 Urban Drainage Component 92 10.2.4 Solid Waste Management Component 96 10.2.5 Roads and Transportation Component 98 10.3 Part B: Urban Management and Institutional Development 98 10.3.1 State Level Institutional Development 100 10.3.2 Municipal Corporation Institutional Development 100 10.3.3 Municipal Staff Training 100 10.3.4 Poverty Alleviation 101 10.4 Part C: Implementation Assistance 101 11. CITY SUB-PROJECT IMPLEMENTATION 102 11.1 Executing and Implementing Agencies 102 11.1.1 Executing Agency 102 11.1.2 Implementing Agencies 102 11.2 Project Management 103 11.2.1 Project Management Office 103 11.2.2 Project Implementation Units 103 11.2.3 Project Management and Design Consulting Services 103 11.3 Procurement and Disbursement Procedure 106 11.3.1 Procurement of Goods and Works 106 11.3.2 Disbursement Procedures 106 11.4 Procurement Packages and Implementation 107 11.4.1 Procurement Packages 107 11.4.2 Implementation Schedule 107 11.5 Reports, Accounting and Auditing Requirement 108 11.5.1 Reporting Requirement 108 11.5.2 Accounting 108 11.5.3 Auditing 108 11.6 Project Review 108 11.7 Project Performance Monitoring System 109 11.8 Long-Term Sustainability 109 12. COST ESTIMATES AND FINANCING PLAN 110 12.1 Cost Estimates 110 12.2 Financing Plan 111 13. FINANCIAL ANALYSIS 112 13.1 General 112 13.2 Assumptions Used in Financial Projections 112 13.3 Cost Recovery 114 13.4 Financial Internal Rate of Return 115 13.5 Average Incremental Financial Cost and Subsidy 117

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13.6 Beneficiary Affordability 118 13.7 Project Sustainability 119 14. SUB-PROJECT RISKS AND ASSUMPTIONS 121 14.1 Physical Component Risks 121 14.2 Policy Risks 121 14.3 Institutional Risks 121 14.4 Social Risks 122 14.5 Financial Risks 122 14.6 Economic Risks 122

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List of Annexes

Annex A Proposed Procurement Packages Annex B Sub-Project Implementation Schedule Annex C Sub-Project Cost Estimates and Financing Plan Annex D Financial Improvement Action Plan Annex E Financial Analysis

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List of Tables

Table 2-1: Trends in District Net Domestic Product for Ernakulam District 5 Table 2-2: Population Growth and Projections 7 Table 5-1: Staffing Pattern of Kochi Municipal Corporation 20 Table 6-1: Revenue Account (Rs. Million) 25 Table 6-2: Property Tax -Rate Schedule 29 Table 6-3: Property Tax – Demand & Collection (Rs. Million) 29 Table 6-4: Profession Tax – Demand and Collection (Rs. Million) 30 Table 6-5: Capital Account (Rs. Million) 33 Table 6-6: KWA Water Tariff Schedule 37 Table 6-7: KWA Sewerage Connection Fee 38 Table 6-8: Kochi Water and Sewerage Operations – Income and Expenditure (Rs. Million) 38 Table 7-1: Development Plan (1976) Proposals and Status 42 Table 7-2: Existing and Proposed Land Use in Kochi Corporation 43 Table 8-1: Kochi Municipal Corporation Priorities 46 Table 8-2: Kochi - Community Municipal Service Priorities 46 Table 9-1: Details of Water Production Schemes 47 Table 9-2: Water Supply Connections 48 Table 9-3: Water Supply Design Parameters 52 Table 9-4: Water Supply Demand and Source Development 52 Table 9-5: Water Supply and Consumer Projections 53 Table 9-6: Existing Pumping Station Details 55 Table 9-7: Sanitation System in Kochi 56 Table 9-8: STP Technology and Site Requirements 60 Table 9-9: Details of Drains in Kochi 61 Table 9-10: Agencies Responsible for Drainage 62 Table 9-11: Solid Waste Generation in Kochi (2001) 67 Table 9-12: Physical Composition of Waste 67 Table 9-13: Preliminary Requirement for Integrated SWM System 73 Table 9-14: Road Network in Kochi City 76 Table 9-15: Classification of Major Roads in Kochi 76 Table 9-16: Distribution of Road Network as per Right of Way (ROW) 77 Table 9-17: Speed and Delay Characteristics at Selected Links 78 Table 9-18: Traffic Growth Rate during 1991-2004 78 Table 9-19: Details of Committed Transportation Projects – Kochi 79 Table 9-20: Peak Hour Traffic Distribution at Selected Locations 80 Table 9-21: Peak-hour Traffic Volume on Selected Road Stretches - 2004 82 Table 9-22: Peak-Hour Turning Traffic at Selected Junctions 83 Table 9-23: Peak On-Street Parking Accumulation 83

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Table 9-24: Mid-Block Pedestrian Count at Selected Locations 84 Table 9-25: Details of Road Accidents - Ernakulam District 85 Table 9-26 Details of Street Lights Availability at Selected Road Sections 85 Table 9-27: Details of Urban Transport Proposals – Kochi City 87 Table 11-1: Proposed Contract Packages - Kochi 107 Table 12-1: Summary of Sub-Project Cost Estimate 110 Table 12-2: City ρLevel Financing Plan (Rs. Million) 111 Table 13-1: Weighted Average Cost of Capital 115 Table 13-2: Summary of Financial Evaluation 116 Table 13-3: Average Incremental Financial Cost 117 Table 13-4: Subsidy Analysis 118 Table 13-5: Household Affordability Analysis 119 Table 13-6: Summary of Projected Financial Position 120

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List of Figures

Figure 2-1 Geographical Location Pg 3 Figure 2-2 Population Density Pg 4 Figure 5-1 Organization Set-up of Kochi Municipal Corporation Pg 23 Figure 7-1 Growth Potentials and Directions Pg 44 Figure 9-1 Water Supply Distribution System Pg 49 Figure 9-2 Solid Waste Management System Pg 70 Figure 9-3 Committed Transport Projects Pg 81 Figure 10-1 Proposed Sewerage System Pg 91 Figure 10-2 South Ernakulam STP Site Plan Pg 93 Figure 10-3 North Kochi STP Site Plan Pg 94 Figure 10-4 Urban Drainage Proposals Pg 95 Figure 10-5 Solid Waste Composting and Landfill Site Pg 97 Figure 10-6 Urban Roads and Transport Proposals Pg 99 Figure 11-1 KSUDP – Proposed Project Management Structure Pg 105

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List of Abbreviations and Acronyms

ADB Asian Development Bank ADS Area Development Society BOT Build Operate Transfer BOO Build Own Operate BOOT Build Own Operate and Transfer CBO Community Based Organization CDS Community Development Society DFID Department for International Development DPC District Planning Committee DWCUA Development of Women and Children in Urban Areas EIA Environmental Impact Assessment EDII Entrepreneurship Development Institute of India GDP Gross Domestic Product GIS Geographical Information System GoI Government of India HRD Human Resources Development HUDCO Housing and Urban Development Corporation IEE Initial Environmental Examination IKM Information Kerala Mission IMA Indian Medical Association IMR Infant Mortality Rate IT Information Technology JBIC Japan Bank for International Cooperation KocMC Kochi Municipal Corporation KolMC Kollam Municipal Corporation KozMC Kozhikode Municipal Corporation KSEB Kerala State Electricity Board KSPCB Kerala State Pollution Control Board KSRTC Kerala State Road Transport Corporation KSUDP Kerala Sustainable Urban Development Project KUDFC Kerala Urban Development Finance Corporation KUDP Kerala Urban Development Project KWA Kerala Water Authority LFS Land Fill Site Lpcd Litre Per Capita Per Day LSGD Local Self Government Department MFI Micro Finance Institutions MGP Modernizing Government Program MIS Management Information System MLD Million Litre Per day MSL Mean Sea Level NABARD National Agricultural Bank for Rural Development NATPAC National Transportation Planning and Research Centre NGO Non Government Organization NH National Highways NHG Neighborhood Group

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NRY Nehru Rojgar Yojna NSDP National Slum Development Program O&M Operation and Maintenance PIU Project Implementation Unit PMO Project Management Office PPP Public Private Partnership PPTA Project Preparation Technical Assistance PWD Public Works Department RIS Repayment Information System SC/ST Schedule Caste and Schedule Tribe SHG Self Help Groups SJSRY Swarna Jayanti Shahari Rozgar Yojna STP Sewage Treatment Plant SWM Solid Waste Management TCPO Town and Country Planning Organization ThMC Thiruvananthapuram Municipal Corporation TMC Thrissur Municipal Corporation TRIDA Thiruvananthapuram Development Authority TUDP Trivandrum Urban Development Project UFW Unaccounted Water USEP Urban Self Employment Program UBSP Urban Services for the Poor VAMBAY Valmiki Ambedkar Awaz Yojna WTP Willingness to Pay

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1. BACKGROUND AND SCOPE

1.1 Introduction The Final Report (FR) is the forth main output from the ADB TA4106-IND for the preparation of a project to attract loan funding from the Asian Development Bank for improving infrastructure and municipal service delivery in the five municipal corporations of Kerala. The five cities are Thiruvananthapuram, Kollam, Kochi, Thrissur, and Kozhikode. The project will include investment in physical infrastructure at city level and with proposals for capacity building and institutional strengthening of municipal and state authorities.

An Inception Report was submitted to the State Government and the ADB in April 2004 (revised June 2004), a Mid Term Report (MTR) was prepared and submitted in November 2004 and the Draft Final Report submitted in February 2005. Throughout the PPTA there has been a high level of participation from the stakeholders from the Project cities, GoK agencies and the private sector. Baseline socio- economic surveys were conducted during the second stage of the PPTA which provided community and business perceptions on municipal services delivery. Topic-specific questionnaires also solicited specific data from the cities. The design has learnt from ADB experiences in Karnataka, Rajasthan and Madhya Pradesh and other donor agencies in Kerala. The design has also capitalized on the GoK’s own initiatives in municipal decentralization and urban management reform.

1.2 Project Goal and Objectives The project goal is to encourage sustainable economic growth and poverty reduction in urban Kerala. The objective of the Project is to provide sustainable growth and poverty reduction through the provision of urban infrastructure services and the promotion of good urban governance to urban local bodies in Kerala.

1.3 Study Outputs The outputs from the study are a series of components to improve city wide urban infrastructure services with the integration of poor settlements within the overall urban development process. Specifically, the Project will provide (i) basic infrastructure services to increase economic opportunities and to reduce vulnerability to environmental degradation and urban poverty, and (ii) improve urban governance and increase capacity of the municipal corporations to undertake urban planning activities. The Project will also focus on improving the conditions of the poor through undertaking community infrastructure development and poverty alleviation activities at each municipal corporation.

1.4 Scope of the Report The FR is presented in 9 volumes. Volume 1, the Main Report, provides an overall view of the project and concentrates on State level policy, social-economics and urban management plus issues that are common to all the five project cities. Volume 2 provides separate reports for each individual project city covering mainly technical and financial issues that are particular to that city. Volumes 3 to 7 provide comprehensive details on: Social Impacts and Poverty; Economic Analysis; Initial Environmental Examination; Technical Analysis and, Urban Management and Institutional Development; Volume 8 provides support documents on social and environmental safeguard frameworks and Volume 9 provides the Project Resettlement Plan.

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2. CITY CONTEXT

2.1 Geography and Climate Kochi is the second most important port city on the western coast of India and is the commercial capital of Kerala and is situated in Ernakulam District, located in the central region of the State, between the Western Ghats and the Arabian Sea. The city is located between 9º 52' and 10º 1' North Latitude and between 76º 14' and 76º 21' East Longitude. Figure 2-1 indicates the geographic location of the Municipal Corporation, which is the project area.

Kochi has a tropical climate. The annual variation of temperature is between 26ºC and 33ºC. The humidity is high all year round because of its proximity to the sea and large inland water bodies, or backwaters. The city, like other parts of Kerala, experiences two major seasons. The wet season relates to the southwest and the northwest monsoons giving an average annual rainfall of 2,900 mm.

2.2 Population Trends and Urbanization Urbanization and growth of urban population are pointers towards the change in the occupational pattern of the community, which has been from agriculture and allied means of livelihood to industrial and other non-agriculture occupations.

Kochi Corporation has a population of 596,473 (2001) within an area of 94.88 sq. km. The population growth in Kochi city has been 5.6% during the last decade (1991-2001), which is less than the growth in the District (10%) and the State (9.4%).

Kochi city alone accounts for 40% of the urban population in the District. Greater Cochin Development Authority (GCDA) area encompasses the Municipal Corporation area, six municipalities and adjoining 32 Gram Panchayats. The GCDA covers an area of 729.21 sq. km with a total population of 1,797,779 (2001).

According to Census 2001, the average population density of GCDA area is 2,465 persons per sq. km. In the city central area, the population density is as high as 6,287 persons per sq. km while it is 1,803 persons per sq. km in the outer fringes. Figure 2-2 indicates the population density across the city.

2.3 Economic Development 2.3.1 Sectoral Growth Due to non-availability of city level data, district-level data was considered for analysis. Ernakulam district contains 8% of the State’s population and contributes to 12% of the State’s income. Sectoral contribution and its changes in Ernakulam district during the period 2000-03 were similar to the trend exhibited by the State. Trends in the District’s Net Domestic Product are indicated in the declining trend in the primary sector is substantial.

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Average annual growth in the secondary sector for Ernakulam District (16.6%) is higher than the corresponding growth for the State (2.8%);

Performance of total NSDP and the per capita income are higher for Ernakulam District compared to the State’s corresponding figures;

The tertiary sector contribution to the District economy is substantial with 57% income contribution in 2002-03, attributed to the presence of the service sector in Kochi city; and

The share of sectors in the District NDP witnessed the following trend during the assessment period: decline in primary sector share, stable/constant share for the secondary sector and an increase in tertiary sector share. The above trend indicates a positive growth by the District and is line with the structural pattern of a developing economy.

Table 2-1 is summarized below:

The declining trend in the primary sector is substantial;

Average annual growth in the secondary sector for Ernakulam District (16.6%) is higher than the corresponding growth for the State (2.8%);

Performance of total NSDP and the per capita income are higher for Ernakulam District compared to the State’s corresponding figures;

The tertiary sector contribution to the District economy is substantial with 57% income contribution in 2002-03, attributed to the presence of the service sector in Kochi city; and

Table 2-1: Trends in District Net Domestic Product for Ernakulam District

Components 1999-00 2000-01 2001-02 2002-03 NDP (Rs. Mn at constant prices) Primary 7,434 5,987 5,941 5,696 Secondary 6,509 10,642 9,897 10,324 Tertiary 21,870 24,575 26,934 29,648 Total 35,812 41,204 42,772 45,667 Growth NDP (% over preceding year) Primary - -19.5 -0.8 -4.1 Secondary - 63.5 -7.0 4.3 Tertiary - 12.4 9.6 10.1 Total - 15.1 3.8 6.8 Composition (% of NDP at current prices) Primary 19.5 15.5 13.1 11.8 Secondary 26.5 28.1 30.3 30.9 Tertiary 54.0 56.4 56.6 57.3 Total 100.0 100.0 100.0 100.0 Source: Economic Review 2003, State Planning Board.

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2.3.2 Industrial Development In the recent past, the State has made serious efforts to identify new opportunities and equip it to meet emerging challenges. While traditional industries like handlooms, coir and cashew are in a difficult phase of development with their inherent problems, the present Industrial Policy and other related policies of the State are aimed at enhancing investment opportunities. Emphasis is on information technology, which has started showing positive signs through promotion of IT enabled services. A wide range of initiatives by the State on IT includes “E-Literacy for one member per family” and sophisticated systems development in IIM-Kozhikode.

Industrial Park and Estates. Industrial infrastructure facilities offered by the State include industrial parks and estates. About 137.7 acres of land has been developed under this category in Ernakulam District of which 42.85 acres areas have been allotted, creating employment for 3,122 persons. Apart from industrial estates there are 5 mini-industrial estates, which come under Small Industrial Development Corporation for provision of infrastructure facilities for the small-scale industry sector.

There was a marginal growth in working factories within the Ernakulam District during the year 2002-2003. The Economic Review 2003 indicates that the annual average growth of registered factories in Eranakulam District was 5.6% for the period 1995-2002, which is greater than the growth in registered factories across the State (4.9%); but the employment growth in Eranakulam District is less than that of the State average. During the period 1995-2002, the district share of registered factories and employment in the State was about 16% and 15%, respectively.

Small-scale industrial units registered in Eranakulam District along with their associated investment and employment provided decreased in 2002-03, which is similar to the trend at the State-level. The Economic Review, 2003 report reveals that the average growth of registered small-scale units in Eranakulam District compared to that of State is declining. The growth of employment trend in Eranakulam District (-26.9%) is also declining and its decline is greater than the decline exhibited by State (-24.3%).

Traditional handloom products of Kerala are extremely popular for their distinct blend of elegance, simplicity and excellence in design. This sector employs about 175,000 persons and is the second largest employer after the coir industry, among the traditional based industries of the State. Eranakulam District has about 32 handloom cooperative societies, which constitutes 4% of the State’s handloom cooperative societies; this share was relatively constant during the period 2000-03.

Various agencies such as KSIDC, KINFRA, and KFC are involved in industrial promotion by providing financial and infrastructure assistance to industrial units.

2.3.3 Tourism Growth and Potential Tourism sector plays an important role in economic development and contributes a significant share of the State’s economy. The tourism sector is identified as an alternative economic growth source for the State. Kochi, however, functions mostly as a transit point for domestic and foreign tourists.

Foreign tourists in Eranakulam District comprise 38% and 34% of the State’s foreign tourist population in 2002 and 2003, respectively; the corresponding figures for domestic tourists were 17%

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2.3.4 Growth Trends and Projections Assessment of city economic development and urban growth indicates a decadal population growth rate 5.6%. The city is expected to grow at the same rate over the next three decades. Table 2-2 indicates the population growth projections for Kochi city.

Table 2-2: Population Growth and Projections

Year Population 1991 564,589 2001 596,470 2011 630,000 2021 660,000 2031 683,000

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3. SOCIO-ECONOMIC PROFILE

3.1 Introduction Kochi, the commercial capital of Kerala, and the most cosmopolitan city of the State, is considered as the “Gateway of South India”. Apart from being the nerve centre of trade and commerce, Kochi is the only all-weather harbor on the west coast of Southern India, affording a safe anchorage to ships.

In 2001, Kochi Municipal Corporation (MC) housed a population of 596,473 persons, consisting of 295,351 males and 301,122 females.

Under KSUDP, a socio-economic study was conducted to collect data to help identify the areas of services required to improve the basic urban services including urban social services required for poverty alleviation.

Interviews and focus group discussions were organized for city-level stakeholders1 to assess their perception about the city’s development, through a participatory process, and their willingness and capacities to be involved in the Project. The survey covered a sample of 1% of the city’s households for quantitative information, while group discussions, interviews and case studies were conducted for qualitative information. The study covered poor households, Low Income Groups (LIG), Middle Income Groups (MIG) and High Income Groups (HIG) categories. The survey sample size in Kochi was 1,325 households and the population stratified in the aforesaid groups.

Further stratification was carried out on the below mentioned basis:

To gain insight into the poverty and vulnerability of economically backward groups, the ‘poor’ was divided into Most Vulnerable (MV), Just above Vulnerable (JV) and Upper crust of the Poor (UP). This classification is purely based on the risk factors identified and used by Kudumbashree for their poverty eradication programs.

LIG is identified in terms of the economic basis, as households with a monthly income less than Rs.5,000 and who do not come under the poor category as mentioned above.

MIG is also identified in terms of the economic basis and are households with a monthly income greater than Rs.5,000 but below Rs.10,000.

Likewise HIGs are households with a monthly income greater than Rs.10,000.

Considering the risk factors, especially on the economically weaker section, the sample proportion was distributed among the Poor, LIG, MIG and HIG as 30%, 35%, 30% and 5% of the households respectively. Care was taken to include women headed households in the sample.

3.2 Household Profile The socio-economic baseline study reveals that the average family size of the poor households is five members while among the non-poor are four members. Women headed families are primarily among

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MV groups and constitute 28% of the total families surveyed. There is a steady increase in the proportion of male-headed families across the city, from the MV category to the HIG category.

3.2.1 Employment Unemployment in Kerala has increased as revealed by the high registration in employment exchanges. The unemployment rate of Kerala is 11.6% in rural areas and 12.2% in urban areas, whereas the comparative figures for the country as a whole are 2.3% and 5.7%, respectively (Economic Review, 2003). 15% of the poor and 9% of non-poor households surveyed do not have employment and 45% of the population earns their livelihood as daily wage earners.

3.2.2 Income and Expenditure Monthly Income. The average monthly income of the Most Vulnerable (MV) group is Rs.1,835, the Just Vulnerable (JV) is Rs.2,510, the Upper crust of the Poor (UP) is Rs.2,760 and Low Income Group (LIG) of the non-poor is Rs.3,505. All these categories have a monthly income less than Rs.5,000. The members of the MIG category have an average monthly income of Rs.7,380 and members of the HIG category have an average monthly income of Rs.21,460.

Monthly Expenditure. The average monthly expenditure among households exhibit the following trend, MV spend Rs.2,090, JV spend Rs.2,510, UP spend Rs.2,580 and the LIG spend Rs.3,155. The MIG and HIG categories have an average monthly expenditure of Rs.5,425 and Rs.10,235, respectively. The MV and JV spend more than their income, which is an indication of their indebtedness.

The average expenditure on food by the poor is up to Rs.1,280 per month and LIG spend around Rs.1,450 per month on food. The MIG and HIG category spend between Rs.2,045 to Rs.3,065 per month on food.

The HIG spend an average of Rs.665 per month on medical expenses. The poorest people (MV) spend on an average Rs.225 per month towards health care and depend on government hospitals for free- treatment.

On an average, the poor spend up to Rs.125 per month on transportation and the LIG spend Rs.155 per month on the same. Respondents in the above two categories depend either on public transport system or use two-wheelers or bicycles for transportation. The average monthly expenditure in MIG households is Rs.555 and in HIG households it is Rs.1,580. Both groups do not use public transport facilities but use their own two-wheelers or cars.

Average monthly expenditure by the LIG on children’s education is Rs.360; MIG households spend Rs.350 per month and HIG households spend Rs.680 per month on children’s education. The poor spend up to Rs.135 per month on meeting children’s education expenses. The poor send their children either to government schools or aided schools where fees and other expenditures are low. LIG, MIG and HIG send their children to private/unaided schools.

1 Elected Representatives, Government Representatives/Staff, Women Groups, Resident Welfare Associations, Business Groups, Merchants/Traders Associations, Business Chambers, etc.

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The average expenditure on house rent and repayment of house loan constitutes a monthly expenditure of Rs.250 for all categories. The monthly expenditure on rent and repayment of loans for housing constitutes a maximum of Rs.50 for the poor, Rs.100 for LIG, Rs.350 for MIG and Rs.900 for HIG.

3.2.3 Land and Housing The socio-economic survey reveals the following data about the housing condition and the ownership of the respondents.

Housing Typology. Up to 44% of the poor live in independent houses; 26% of the poor respondents reside in row houses and on an average 30% of the poor respondents reside in slums.

Ownership of Houses. Majority of the respondents owned houses. Among the poor categories, the 58% households own their own houses. 89% of the total LIG respondents owned the houses they occupy. 86% of MIG households and 89% of HIG households own their houses.

Housing Condition. Among the poor, majority of the Most Vulnerable category i.e., 41% live in kutcha houses. Among the Just Vulnerable category, 26% live in kutcha houses. The data indicates that there is a direct relation between the income category and the housing condition.

3.2.4 Social Capital Social capital refers to the trust-based network among people that are reinforced by norms of behavior. Like other forms of capital (financial, physical, human and natural), social capital is an asset that helps people and groups cope with poverty. Social capital analyses the nature of donor and beneficiary through the social contacts. Kochi city has many Non Governmental Organizations working in various developmental areas.

Kudumbashree project has built a network of the poor women groups from slum areas through a three tier system, i.e. Neighborhood groups, Area Development Society and Community Development Societies. Kochi Corporation has 1,763 Neighborhood Groups and 79 Area Development Societies. These groups are emerging as powerful vehicles for socio- economic transformation of the urban poor.

There are resident welfare associations in Kochi Corporation, which focus on the problems of its households. There is a Federation of Residents Association (FRAT) representing these associations. There are also consumer groups, citizens groups from the city constantly creating a civic conscious for the social and cultural development of people.

3.2.5 Health Kerala has the most extensive medical infrastructure among all states in India. There are many private super specialty hospitals in Kochi. Mattancherry, Fort Kochi and Palluruthy, where most of the poor people live have limited facilities in terms of health infrastructure. Resource crunch is the main problem faced by the health sector. Following are the findings from the baseline study.

Only 9% respondents reported diarrhea and 1.58% of the respondents reported typhoid. The occurrence of this water borne disease among non-poor was insignificant. 74% of respondents in each respondent group are satisfied with the current health services.

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3.2.6 Education Kerala has achieved a high literacy rate of 90.92% (Census 2001) as against an all India rate of 65.38%. Findings from the baseline survey reveal that of the total respondents, there are 8% illiterate women and 3% illiterate men. Majority illiterates are from the poor category. Schools exhibit a healthy enrolment and retention rate up to secondary education; however, from the higher secondary level the drop-out rate is high, especially among the poor.

3.3 Access to Services This part of the report reviews the socio-economic profile in relation to available infrastructure.

3.3.1 Water Supply The following are the findings from the baseline study:

Water Sources. On an average 76% of the non-poor and 28% of poor have access to water through household water connections/piped water supply and 88% of the poor respondents depend on stand posts for water. Across all respondents, 15% depend on open wells or bore wells.

Satisfaction Levels with the Water Supply System. All groups are generally satisfied with the current supply system. But the meaning of satisfaction varies between groups -for the non poor groups it is the pressure and quality whereas for the poor groups it is the accessibility, quantity, time spent in getting water, etc. 64% of the poor category and 63% of the non-poor category are satisfied with existing water supply system.

Willingness to Pay (WTP) for Improved Water Supply. Across all categories of respondents, 40% are willing to pay for improved water supply. There is uniformity among the poor and non-poor regarding willingness. Among the poor only 30% are willing to pay for improved water supply. 20% LIG households, 47% MIG households, and 85% HIG households are willing to pay for better services.

3.3.2 Sanitation The following are the findings from the baseline study:

Type of Access. Among the poor, 51% of the Most Vulnerable, 61% of the Just Vulnerable and 74% of the Upper Crust of the Poor own toilets. 25% of the poor depend on public toilets and 3% of the poor resort to open defecation. Among the non-poor, all MIG and HIG have own toilets and 67% of LIG have own toilets.

Type of System Used. The most common system in the community uses a septic tank with 79% of the poor respondents, 86% of LIG and 93% of respondents belonging to MIG having one. An underground sewerage system is available to only 5% of the respondents.

Satisfaction Level of the Present Sanitation System. More than 49% of the Most Vulnerable and 68% of Just Vulnerable are satisfied with the present sanitation system. The following satisfaction levels were indicated; 74% UP households, 77% LIG households and 71% MIG households. The HIG category indicated a lower degree of satisfaction at 41% households being satisfied with the current system.

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Willingness to Pay (WTP) for Better Sanitation. 85% of HIG, 48% of MIG and 20% of the LIG are willing to pay for improved services, whereas only 30% of the poor are willing to pay for improved sanitation services.

3.3.3 Urban Drainage The following are the findings from the baseline study:

Details of Flooding. Majority of the respondents, i.e. 67% of all the poor and 85% of the non- poor stated that flooding does not affect their property or approach road. Among the poor 42% of MV complained of flooding. This calls for better drainage facilities particularly where the Most Vulnerable category of poor resides.

Satisfaction Level of Present Drainage System. Across all the respondents, only 16% revealed satisfaction. 90% of the poor households were dissatisfied with the present drainage system; however, 50% of LIG households and 41% of MIG households were satisfied with the present drainage system.

3.3.4 Solid Waste Disposal The following are the findings from the baseline study:

Usual Mode of Disposal. Waste from 36% poor households, 24% LIG households and 30% MIG household areas are collected by NGOs, private sector, and Kudumbashree groups. In HIG areas, 75% households are covered by door-to-door collection. However, a significant percent of the households across all categories, 10-20% dump the waste in open areas and 10-20% households resort to burning of waste.

Satisfaction with Waste Disposal Services. Regarding the satisfaction level more than 65% of families across all income groups are satisfied with the present waste collection system.

Willingness to Pay (WTP) for Solid Waste Management. About 20% of families belonging to the poor category and 38% of the non-poor category are willing to pay for better services. 35% MIG and 61% HIG respondents are willing to pay for the better services.

3.3.5 Roads, Street Lighting & Access to Public Transport The following are the findings from baseline study:

Level of Satisfaction. 60% of all respondents indicated satisfaction regarding the road condition.

Street Light Functioning. 55% poor households, 47% LIG households, 58% MIG households and 39% HIG households expressed satisfaction about street light functioning. 61% of the MV households stated that only some of the street lights are functioning and this requires providing adequate lighting to the areas where MV household reside.

Satisfaction Level Regarding Public Transport System. 69% of the respondents across all categories were satisfied with the Public Transport System.

Willingness to Pay (WTP) for Better Transport Services. 10% of the households across the poor, 5% LIG and 26% MIG are willing to pay for the improved transportation services. Among the HIG households 53% are prepared to pay for the additional transportation facilities.

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4. POVERTY AND VULNERABILITY

4.1 Overview Provisional results from Census 2001 indicate that Kochi has a slum population of 1.32% of the total city population and 17.43% of the State’s slum population. The above estimates are contingent on the methodology adopted by the Municipal Corporation in classifying and notifying informal settlements within its jurisdiction.

The analysis for this project is based on the figures obtained from the socio-economic baseline household survey and from the qualitative assessments obtained from the participatory rapid appraisal (PRA). The survey also provides insights into the risk faced by poor households, vulnerability issues and access to urban services.

It is now widely understood that poverty is experienced through a variety of dimensions of which low income is only one. In addition, within the poor there varying issues associated with poverty comprising the ability of poor households to graduate from poverty and the relative vulnerability of different groups to withstand risks to livelihood such as unemployment, sickness, etc. Effective poverty reduction programs need to be able to differentiate these groups and design appropriate and targeted responses.

The following sections seek to provide a more detailed analysis of the Most Vulnerable (MV), Just Vulnerable (JV) and Upper Crust of the Poor (UP) categories of households.

For the project and the socio-economic study the poor have been classified into Most Vulnerable (MV), Just above Vulnerable (JV) and Upper Crust of the Poor (UP). This classification is purely based on the risk parameters identified and accepted for poverty eradication by the State Poverty Eradication Program, Kudumbashree. The nine risk parameters adopted for urban areas comprise:

1) No land/less than 5 cents (approximately 2,400 sq feet) of land;

2) No house/dilapidated house;

3) No sanitary latrine;

4) No access to safe drinking water within 150 meters;

5) Women headed household/presence of a widow, divorcee/abandoned lady/unwed mother;

6) No regularly employed person in the family;

7) Socially disadvantaged groups (SC/ST);

8) Presence of mentally or physically challenged person/chronically ill member in the family; and

9) Families without color TV.

A family having at least four of the above factors is classified as a ‘Family at Risk’ or ‘Poor Family’. The location of poor households and their distribution across the city was identified in consultation with Kudumbashree, i.e. State Poverty Eradication Mission, officials.

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4.1.1 Employment The main income earner in 69% of all poor households is in informal employment (informal employment refers to daily wage earning activity related to petty shops, manual workers in trade and service, construction worker, etc.). The study indicates that the main income earner was in an informal sector for 70% of MV households, 73% of JV households and 61% of UP households. Unemployment is reported among 15% of the poor households and 10% of the non-poor households.

Women as the main income earners were observed among 17% households across all categories that were surveyed. In the poor households, 22% had women as the main income earners. Among different categories of poor households, 28% of the MV, 14% of JV and 25% of the UP households had women as the main income earners.

4.1.2 Financial Capital The total average monthly expenditure of the MV, JV and UP households was Rs.2,090, Rs.2,510 and Rs.2,580 respectively with a city average of Rs.4,335. Poor households spent an average of Rs.1,280 per month on food; the non-poor spent Rs.2,190 per month. Among the poor households 43% of MV, 59%of JV, and 74% of UP households lived in own houses. 41% of MV, 26% of JV, and 8% of UP households live in kutcha structures.

In terms of consumer goods ownership and usage, television is the most common item and is found in 61% of the poor households surveyed and finds a wide patronage among the poor with ownership by 44% MV households, 67% JV households and 73% UP households.

4.1.3 Poverty Alleviation in Kochi Swarna Jayanthi Shahari Rozgar Yojana (SJSRY), National Slum Development Program (NSDP) and Valmiki Ambedkar Beem Awas Yojana (VAMBAY) are the major poverty eradication programs implemented through Government of India funding. The funds are routed through Kudumbashree to the local bodies.

Poverty Eradication by the Municipal Corporation. Poverty eradication programs by the MC are undertaken through Community Development Societies (CDS), Area Development Societies (ADS), and Neighborhood Groups (NHGs). The Municipal Corporation has provided loans for self- employment programs by utilizing Central and State Government funds. There are two Community Development Societies and 1,763 Neighborhood Groups in Kochi, formed as part of SJSRY.

The following were findings of the Baseline Study regarding the social welfare and security schemes availed by the respondents.

Government and Public/Private sector undertakings have initiated welfare programs and social security schemes to safeguard people in case of crisis and risks;

Overall access and utilization of welfare and social security services by the poor is inadequate; and

Only 3% of the poor households surveyed access unemployment benefits, ESI, PF, Gratuity, Family Pension, Widow Pension, Dependents Pension and Insurance schemes - limited to Employee States Insurance Scheme Pension/Family Pension and insurance schemes.

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5. INSTITUTIONS, MANAGEMENT AND CAPACITY

5.1 Decentralization Kerala Development Program. Subsequent to the 74th Constitution Amendment Act (CAA), 1992 the Government of Kerala (GoK) embarked on a policy of decentralization of powers to local governments. The Kerala Municipalities Act, 1994, was drafted based on decentralization principles laid down in the 74th CAA. In September 1995, GoK transferred powers and functions to local governments; along with institutions, offices and functionaries. Key features of the decentralization initiative comprised: (i) transferring health related institutions (except medical colleges and regional specialty hospitals) to local governments; (ii) transferring all schools to Urban Local Bodies (ULBs); (iii) planning and implementing centrally sponsored poverty alleviation schemes through ULBs; (iv) planning social welfare schemes, implementing Integrated Child Development Scheme (ICDS), affecting payment of various social security pensions, and creating centers for disabled care as ULB responsibilities; and (v) planning and providing urban basic services, including water supply, sanitation, storm water drainage and urban roads (excluding those provided/maintained by the State Public Works Department).

GoK chose to operationalize the decentralization process through participatory local-level planning and initiated through the People’s Plan Campaign or the Kerala Development Program. The Annual Plan of the Municipal Corporation (MC) comprises development projects planned at the grassroots level and approved by the Council – financing of all approved projects is through ULB own funds, loans from Financial Institutions and plan grants under State and Central schemes.

Financial devolution formed the backbone of decentralization and comprised: (i) providing approximately 30-40% of the total plan size of the State as untied devolutions to local governments for developmental works – of the total allocation to a local self government institution (LSGI), 30% is allocated for SC/ST development and 70% is allocated for general purposes (comprising 10% in productive sectors, 10% for slum infrastructure, not more than 50% on infrastructure, and 30% for service sector); (ii) stipulating that no part of the devolved funds should be used for staff salaries and establishment expenditure; and (iii) releasing funds in fourteen installments during a fiscal year; any shortfalls in fund usage would result in allocation lapsing. Of importance is the feature regarding planning and implementing projects prepared by local self governments – 30-40% of the plan size of the State’s budget was set apart for local self governments with 15% of the said amount earmarked for ULBs.

5.2 Service Delivery and Inter-Agency Coordination According to the KM Act, 1994, the Municipal Corporation/local self-government is responsible for:

Civic service delivery that consists of: (i) preparing and implementing a water supply and sewage disposal scheme (ii) providing adequate sanitation through solid waste collection and disposal, low cost sanitation and surface drainage; (iii) providing street lighting facilities; (iv) constructing and maintaining roads; and (v) providing facilities for public conveniences.

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Administrative services that consist of: (i) issuing various certificates; (ii) maintaining public amenities; (iii) maintaining public utility services; and (iv) providing ambulance services.

Regulatory services that consist of: (i) issuing licenses and permits; (ii) registering births, deaths, marriages, and private hospitals and tutorials; (iii) issuing notices and other certificates for taxation purposes; (iv) maintaining records and registers of all municipal transactions; and (v) abating nuisances.

Transferred services that consist of undertaking: (i) maintenance and operations of health and educational institutions; (ii) economic development in the LSGI jurisdiction; (iii) social welfare programs; and (iv) social security schemes.

State-level Departments, Programs and Missions, and Institutions also govern urban management and basic service delivery in the State’s ULBs. a) State Level Departments of Local Self Government, Water Resources, Public Works, Revenue and Housing, General Administration, Power, Health, and Science, Technology and Environment provide policy and administrative directions to various State and local-level agencies for effective urban basic service delivery. Departments overseeing transferred functions like education, health, etc. also play a key role in urban service delivery. b) Missions constituted by GoK effectively administer the process of good governance, facilitate urban environmental management, improve financial management in ULBs and assist in poverty alleviation; these include the Modernizing Government Program (MGP)2, Clean Kerala Mission (CKM), Information Kerala Mission (IKM), and State Poverty Eradication Mission (Kudumbashree). c) Institutions supporting activities in urban management include Kerala Water Authority (KWA), Kerala Urban Development Finance Corporation (KUDFC), Kerala Institute of Local Administration (KILA), and Development Authorities.

Inter-agency Coordination. Inter-agency coordination depends upon the service provision type and the legal context for the said provision. The following are key issues associated with the aforesaid services:

While the KM Act, 1994, and amendments therein requires the MC to maintain and arrange water and sewerage services, KWA continues to provide the said services in Kochi.

New/additional lines within the MC area are constructed as deposit works, with the MC making a deposit with KWA for the identified work.

Non-remittance of the water tax component in the property tax, apportioned towards capital contribution, to the Kerala Water Authority affects repayment of funds towards capital creation to improve water supply.

2 The Asian Development Bank aids the MGP mission. GoK launched MGP in 2002 with an objective of improving governance in various State departments. With specific reference to local governments, MGP focuses on frameworks for preparing five-year plans, performance focused basic service delivery, local economic development potentials, systems to strengthen accountability, budgeting, accounting and resource mobilization systems, training needs for local government personnel, and policy decisions for effective governance.

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Reduction in State transfers to the MC from duty on transfer of property. Through a 1994 Government Order, GoK ensures that KWA receives payment towards demand raised by KWA on the MC towards operational cost on headworks and street taps (25% of the duty on transfer of property, transferred by GoK to the MC, is deducted and apportioned to KWA).

GoK through a Government Order has created a system of coordination between KWA and the MC regarding operation and maintenance; the same may be further refined to facilitate large- scale/citywide projects.

Dredging activities along main drainage channels are carried out by the Irrigation Department based on the gravity of the problem. Holistic approach to drainage maintenance not adopted; Irrigation Department and MC maintain drains/channels within their control. The Kochi Municipal Corporation also plays a key role in drainage maintenance.

Poor utilization of Centrally Sponsored Scheme fund by the MC (channeled through Kudumbashree/State Poverty Eradication Mission) with 82% utilization of SJSRY funds, 66% utilization of NSDP funds, and 44% progress regarding VAMBAY schemes.

Under Section 30 of the KM Act, 1994, the MC is required to carry out spatial planning; this function is currently carried out by the TCPD at the MC’s request. The MC oversees land use zoning originally the responsibility of the Greater Cochin Development Authority (GCDA).

5.3 Organization Structure of the Municipal Corporation Kochi Municipal Corporation was constituted in 1967 by merging the three municipalities of Fort Cochin, Mattancherry and Eranakulam; each constituted in 1866, 1912 and 1913, respectively. The merger also included the Palluruthy, Edappally, Vyttila and Vennala Panchayats and the Willingdon, Gundu, Ramanthuruthu, Vimanadweep and Thanthonni Islands. The Kerala Municipal Corporations Act, 1961, governed the MC’s functioning before the Kerala Municipalities Act, 1994, was enacted. Administration of municipal services is carried out in 66 divisions/wards.

5.3.1 Deliberative/Executive Wing A Mayor (elected from the councilors) chairs the Council meetings, and is responsible for overall supervision and control of administrative functions of the Municipal Corporation. The Council is composed of all elected councilors and subject to the provisions of the KM Act, the administration of the MC vests in the Council; the Council’s period extends for five years. The MC through the Council has all the powers, authority and responsibilities of the Government, to enable it to function as an institution of self-government in respect of the matters entrusted to it. The Council, subject to the provisions of the KM Act, may constitute committees for exercising its powers, discharging such duties or performing such functions, as it may delegate to the Committees. A Deputy Mayor presides over Council meetings during the absence of the Mayor. The Mayor devolves his/her functions on the Deputy Mayor when he/she is indisposed or out of the Sate. The Deputy Mayor is also the Chairman of the Finance Standing Committee.

Standing Committee. According to the KM Act, every Municipal Corporation shall constitute Standing Committees on the following subject areas and may exercise such powers as delegated to it by the Council:

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Finance. To supervise the utilization of budget grants and oversee the timely assessment and collection of taxes, fees, rents, etc.;

Development. To deal with dairy development, cooperation, small-scale industries, institutional finance, etc. and to prepare development plans;

Welfare. To deal with matters of welfare of women and children, development of SC/ST, social welfare, etc.;

Health and Education. To deal with matters of public health, education, etc.;

Works. To deal with matters of public works, housing, etc.;

Town Planning and Heritage. To deal with matters regarding town planning, etc.; and

Appeals Relating to Tax. To dispose of appeals on taxation, etc.

Steering Committee. The KM Act lays down that every MC shall have a Steering Committee consisting of the Mayor, Deputy Mayor and Chairmen of the Standing Committees and the Mayor shall chair the Steering Committee. The Steering Committee is to coordinate and monitor the functioning of all Standing Committees and shall have the powers as delegated by the Council.

Ward Committee. The Ward Committee consists of ward councilor as Chairperson and the members are drawn from the residents association, registered neighborhood groups, educational institutions in the ward, registered trade unions, etc. The Ward Committee disseminates information at the ward level regarding development and welfare activities. The KM Act lays down that even the Council shall not alter the priority of the development work list prepared by the Ward Committee.

5.3.2 Administrative Wing The Secretary is the administrative head of the MC and carries out resolutions of the Council, reports compliance to the Council, exercises powers and discharges duties conferred under the KM Act. The Secretary implements all the decisions/directions of the Mayor, ensures safe custody of the Municipal Fund and attends to all litigations for or against the MC. Seven departments manages the functions of the Municipal Corporation (refer Volume 7 – Urban Management and Institutional Development for inter department coordination). In addition to the Central Office, six Zonal Offices manage decentralized functions of the Municipal Corporation; these include Fort Cochin, Mattanchery, Edapally, Pachalam, Vytilla and Palluruthy. Figure 5-1 indicates the organization structure of Kochi Municipal Corporation. a) General Administration Department. The General Administration Department (GAD) manages staff postings and transfers, defines staff duties and responsibilities, prepares administration reports and ensures proper communication between the departments and the Corporation Council. The PA to the Secretary heads the GAD. b) Accounts Department. The Accounts Department (AD), a key department of the MC, manages MC finances and monitors the use of allocated funds for different schemes. It plays a major role in the formulation of the budget. The Accounts Officer is responsible for supervising all financial transactions related to the MC, advising the Secretary on all internal financial matters, maintaining records of financial receipts and expenditure in accordance with the purpose and

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utilization of funds, reporting deviations in utilization of funds in any of the approved schemes, assisting the MC in budget preparation, maintaining accounts regarding stamp duty surcharge and State grants, maintaining petty cash book and general cash book and attending to audit requirements and other such accounts-related duties. The AD is also responsible for internal audit of all bills for payment, audit clearances, preparation of annual financial statements and the demand, collection and balance statement (DCB). c) Engineering Department. A Superintending Engineer (SE) heads the Engineering Department and is assisted by five Assistant Executive Engineers (AEE) and ten Assistant Engineers (AE). The major duties and responsibilities of the Engineering Department include construction and maintenance of roads, drains and other public works. An AE in the Drawing Section supports the Engineering Department in preparing requisite detailed engineering drawings for undertaking works. An Executive Engineer (EE) in-charge of projects handles major schemes of the Municipal Corporation. The EE is supported by an AEE and an AE in overseeing construction of major schemes like shopping complexes, bus terminals, etc. d) Revenue Department. The Revenue Department (RD) is another key department of the Municipal Corporation, consisting of a Revenue Officer (RO), and Assistant Revenue Officer, two Revenue Inspectors at the Central Office, two-three Revenue Inspectors in each Zonal Office, and 56 Bill Collectors. The Deputy Secretary handles the revenue functions for West Zone (Fort Kochi area) and is assisted by an Assistant Revenue Officer. Some of the major responsibilities of the Revenue Officer include responsibility for collecting taxes such as, property tax, advertisement tax, and entertainment tax; issuing notices for recovery of tax; and monitoring revenue collections of the Municipal Corporation. e) Health Department. A Corporation Health Officer (CHO) heads the Municipal Corporation’s Health Department (HD). The HD is responsible for conservancy services, sanitation facilities, solid waste management and other public health duties. An Assistant Health Officer (also in charge of West Zone), one Health Inspector and one Junior Health Inspector (JHI) assist the CHO clearly indicating the pressure on health and waste management services. Twenty one permanent sanitary workers and eighty temporary sanitary workers carry out conservancy services in the city. The JHI is in-charge of works at the field level, which includes monitoring and supervising the work of sanitary laborers in the wards under their charge and attending to specific local complaints. The Project Officer, Urban Poverty Alleviation Cell is located within the Health Department. f) Town Planning Department. A Town Planning Officer (TPO) heads the MC’s Town Planning Department (TPD). The TPD is primarily responsible for enforcing Master Plan regulations, awarding building permissions and facilitating land acquisitions for major schemes. The TPD also conducts routine inspection of MC properties. The position of the Assistant TPO is currently vacant; two Building Inspectors (BIs) in the Central Office and two-three BIs in each Zonal Office carry out the department’s functions. The BIs report to the TPO through the AEEs in the Engineering Department.

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Table 5-1: Staffing Pattern of Kochi Municipal Corporation

Department Main Mattanchery Palluruthy Fort Vytilla Pachalam Edapally Total Office Kochi General Administration 54 ------54 Department Revenue 55 22 5 19 20 13 - 167 Department Accounts 30 ------30 Department Engineering 52 - 10 12 13 - 7 94 Department Health 324 205 68 92 38 70 - 797 Department Town Planning 15 - 4 6 5 - 3 33 Department Other 17 ------17 Departments Total 547 207 87 129 76 83 10 1,192 Source: Kochi Municipal Corporation.

Transferred Institutions. Health Institutions (except Medical Colleges, General Hospitals and other Specialized Hospital) are now under the direct control of the Municipal Corporation; daily management and maintenance of facilities is under the MC’s control, however, staff salaries, recruitment and transfers is managed by GoK. General Education (comprising High Schools, Higher Secondary and Vocational Higher Secondary, Primary and Upper Primary Schools) is also under the MC’s direct control; GoK is responsible for management and staff salaries, etc., similar to responsibilities for health institutions. A similar division of responsibility is observed for other transferred institutions like social welfare, agriculture, animal husbandry, dairy, fisheries and SC/ST. Under social welfare, most social security schemes3 are transferred to the MC; social security pension payment for eligible persons (under the following categories and based on stipulated norms: old age, widow, agriculture workers, physically handicapped) and unemployment wages is in accordance with GoK fund transfer to the MC. The MC’s workload has increased due to the additional responsibility, however, provisions for commensurate staff has not been made.

Zonal Operations. Zones in the city were created for newly added areas through merger of gram panchayats with the MC jurisdiction. Officials at the MC Central Office are currently in charge of zones for overseeing operations within the MC’s jurisdiction. The Zonal Offices are mainly responsible for tax assessment and collection, licensing of trades, issue of building permits and sanitation.

3 Previously under the State-level Departments like Revenue, Labour, Social Welfare, etc. The funds are now transferred from these departments to the MC for disbursal.

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5.4 Capacity Building As a service organization, capacity building of the MC is critical for planning and asset creation, and continued core service delivery and asset management.

Planning. According to the State’s Urban Policy and Action Plan (2002) and the KM Act, the MC requires:

Undertaking responsibility of urban planning, where the MC requires building staff capacity to undertake preparation of the Municipal Development Plan including urban planning to reduce State agency involvement in urban planning and implementation;

Undertaking preparation of Development Vision and Citywide Development Plans, which the MC is currently undertaking but the planning mechanism does not provide for a holistic approach; MC staff capacity should be built to ensure integration of plan works and adoption of a holistic approach to citywide infrastructure provision; and

Establishing a Planning Department within the MC, which should undertake all planning responsibilities for the preparation of the Municipal Development Plan including spatial planning and land use management for the identification of land for specific projects such as solid waste treatment/disposal plants.

The MC’s Planning Department will ensure works implementation, and monitoring and asset management by the Engineering and Health Department. Immediate focus is required to address requirements under the Kerala Development Program, where no specific post was sanctioned or department created within the Municipal Corporation to carry out decentralized planning4.

In formulating local-level plans, Ward Committees5 play an active role supported by the MC’s Engineering Department. However, procurement is carried out on the basis of the Stores Purchase Manual and PWD Manual; the MC lacks access to a comprehensive Works Manual comprising procedure from planning through implementation. Besides proving to be a pressure on the MC’s resources, works are disjointed and do not adopt a holistic view to planning.

Core Service Delivery and Asset Management. GoK’s Urban Policy and Action Plan (2002) and the KM Act focus on core service delivery with specific emphasis on:

Improving urban drainage, where it is imperative for the MC to develop Storm Water Master Plans that should be part of integrated planning within the Municipal Development Plan;

Undertaking solid waste management and sewerage provision, where GoI guidelines suggest waste disposal should be under the direction of a Municipal Environmental Engineering Department instead of the present Health Department;

4 Technically qualified staff was absent in panchayats; hence, they were allowed to procure external assistance for plan/estimate preparation. 5 Ward Committees are constituted in LSGIs with population exceeding 100,000 persons. For all LSGIs with population less than 100,000 Ward Sabhas are constituted.

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The MC undertaking water and sewerage services, where Section 315 of the KM Act, 1994, provides the Municipal Corporation with a mandate to provide water supply and sewerage services;

Preparation of annual maintenance plans, where training is required for the preparation of Municipal Development Plans; and

Implementing urban poverty alleviation programs, where the MC is undertaking steps to ensure increase in fund utilization with assistance from Kudumbashree.

Institutional Development. Primarily the State Finance Commission recommendations and the KM Act govern institutional development in the MC, which focus on:

Reorganizing decentralized operations based on magnitude of works/revenue collection/municipal functions to satisfy the requirement for preparing Municipal Development Plans;

Introducing information technology (IT) enabled services and streamlining municipal systems and procedures; the Information Kerala Mission oversees property mapping and introducing computerized accounting and management information systems (MIS); and

Addressing human resource development, through appointment of additional and appropriately qualified staff for Municipal Development Plan preparation and implementation.

Regarding project implementation capabilities, the MC currently undertakes new projects through the Engineering Department (through the Project Engineer in larger municipal corporations). However, these projects are limited to construction of shopping complexes, marriage halls, etc. and are largely limited to buildings. Major urban infrastructure projects are generally outsourced to State Line Departments on a deposit work basis, wherein the entire cost of the project is deposited with the State Department for undertaking the project; the State Department is responsible for designs, contract award and project management. The Municipal Corporation has no control on the progress and quality of the work carried out. Staff in the Municipal Corporation’s Departments attend to operation and maintenance or basic service delivery and are not equipped to handle project design, detailed engineering or construction supervision of urban infrastructure projects. It is therefore imperative to build staff capacity to handle the aforesaid functions in order to manage sub-projects under KSUDP.

FR Volume 2 - City Report - Kochi PAGE 22 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation Figure 5-1: Organization Set-up of Kochi Municipal Corporation

MunicipalMunicipal Corporation Corporation CouncilCouncil

MunicipalMunicipal Corporation Corporation MayorMayor

MunicipalMunicipal Corporation Corporation SecretarySecretary

CouncilCouncil GeneralGeneral Administration Administration AccountsAccounts RevenueRevenue RevenueRevenue EngineeringEngineering TownTown Planning Planning HealthHealth Department Department DepartmentDepartment DepartmentDepartment DepartmentDepartment DepartmentDepartment DepartmentDepartment DepartmentDepartment DepartmentDepartment CorporationCorporation Health Health CouncilCouncil Secretary Secretary PAPA to to Secretary Secretary AccountsAccounts Officer Officer DeputyDeputy Secretary Secretary RevenueRevenue Officer Officer CorporationCorporation Engineer Engineer TownTown Planning Planning Officer Officer OfficerOfficer

LadyLady Medical Medical OfficerOfficer

AsstAsst Revenue Revenue ProjectsProjects OfficerOfficer (West) (West) EngineerEngineer UPAUPA Cell Cell ProjectProject Officer Officer

PA to Assistant Town CouncilCouncil PA to AccountsAccounts RevenueRevenue AssistantAssistant Executive Executive Assistant Town AssistantAssistant Health Health Secretary Planning Officer SuperintendentSuperintendent Secretary SuperintendentSuperintendent InspectorInspector EngineerEngineer Planning Officer OfficerOfficer

PlanningPlanning Cell Cell AssistantAssistant AssistantAssistant DrawingDrawing Section Section SuperintendentSuperintendent EngineerEngineer EngineerEngineer Asst.Asst. Engineer Engineer

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6. MUNICIPAL FINANCE

6.1 Municipal Fund All cash received by the municipal corporation constitute a fund called the Municipal Fund (Fund) under the Kerala Municipality Act 1994 (KM Act 1994). The items of income credited to the Fund consist of the following:

Own source revenue which includes taxes, duties, cess and surcharge, fees from licenses and permissions, income from municipal properties, and income from other miscellaneous items;

Share of the taxes levied by the Government and transferred to the municipal corporation;

Grants released to the municipal corporation by the Government for the implementation of schemes, projects and plans formulated by the municipal corporation;

Grants released to the municipal corporation by the Government for implementation of schemes, projects and plans assigned or entrusted to the municipal corporation under the KM Act 1994; and

Money raised through donations and contributions from the public and non-governmental agencies.

The municipal corporation keeps its books of accounts under the cash-based system rather than the accrual method of accounting. Revenues are recorded only when received while expenditures are recognized only when paid.

The KM Act 1994 mandates the publication, not later than first week of June, of an annual financial statement of the municipal corporation of the preceding year showing a classified abstract of receipts and payments of the municipal corporation under Revenue, Capital and Debt heads, a demand, collection and balance statement and a statement of the general financial position of the municipal corporation.

6.2 Revenue Account The Revenue Account deals with the recurring Revenue Receipts and Expenditures of the municipal corporation. Presented in Table 6-1 is the Revenue Account of the Municipal Corporation for the fiscal years (FY) 1998-99 to 2002-03.

During those years, the Municipal Corporation had revenue surplus annually. The revenue surplus was highest in FY 2002-03 at Rs.246.68 million (48% of Total Revenue Receipts) and was lowest in FY 2000-01 at Rs.87.37 million (23% of Total Revenue Receipts). Total Revenue Receipts increased annually at a much higher rate of 13% than Total Revenue Expenditures at 6%.

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Table 6-1: Revenue Account (Rs. Million)

Particulars 1998-99 1999-00 2000-01 2001-02 2002-03 Revenue Receipts

I. Own Source Income: A. Tax Income a) Property tax 137.67 154.46 152.84 117.84 175.63 b) Profession tax 12.55 27.41 33.26 28.25 44.69 c) Entertainment tax 47.12 48.32 55.90 39.86 32.67 d) Other municipal taxes 1.44 2.22 3.47 2.00 1.86 Total Tax Income 198.78 232.40 245.46 187.95 254.85 B. Non-Tax Income a) Receipts from municipal properties 16.78 19.09 33.34 45.42 26.68 b) License fees 13.90 16.71 31.73 10.43 6.74 c) Others 0.90 0.81 5.66 14.79 9.27 Total Non-Tax Income 31.58 36.61 70.73 70.65 42.69 Total Own Source Income 230.36 269.01 316.20 258.59 297.54

II. Assigned / Shared Taxes a) Surcharge on stamp duty 70.00 51.33 58.55 38.46 53.65 b) Motor vehicles tax 16.90 20.60 0.00 25.00 39.42 Total Assigned/Shared Taxes 86.90 71.93 58.55 63.46 93.07

III. Grants-in-Aid from Central / State Government a) Grants-in-aid & contributions 1.13 21.78 1.13 88.63 109.38 b) Grants for running transferred institutions 0.00 15.10 9.06 12.52 12.49 Total Grants-in-Aid 1.13 36.88 10.19 101.15 121.86

Total Revenue Receipts 318.39 377.82 384.94 423.20 512.47

Revenue Expenditures a) Management and Collection of Taxes 41.79 43.32 64.62 42.55 44.95 b) Public Works 22.04 22.87 63.78 59.51 63.03 c) Town Planning 3.69 3.83 2.92 2.83 3.69 d) Education 0.21 0.27 0.72 0.05 0.26 e) Water Supply & Drainage 0.60 0.70 1.78 1.41 1.75 f) Public Health & Sanitation 104.66 108.65 122.07 86.54 105.22 g) Street Lights 20.42 21.18 25.69 14.27 24.28 h) Municipal Properties 2.95 2.76 4.26 3.39 5.56 i) Non Plan Operation Expenses 15.26 15.82 9.80 13.03 13.92 j) Miscellaneous Expenses 0.30 0.31 1.93 0.51 3.12

Total Revenue Expenditures 211.92 219.71 297.57 224.10 265.79 Revenue Surplus / (Deficit) 106.48 158.12 87.37 199.10 246.68 Source: Kochi Municipal Corporation

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Revenue Account

600 500 400 Revenue Receipts 300 200 Revenue Expenditures

Rs. Million 100 0 1998-99 1999-00 2000-01 2001-02 2002-03 Fis cal Ye ar

6.2.1 Revenue Receipts The Revenue Receipts of the municipal corporation can be classified into 3 types of revenue source:

Own source income;

Revenue from assigned and shared taxes; and

Grants-in-aid from the Government.

Own source income refers to those revenue items, which the Municipal Corporation is responsible for in terms of their assessment and collection. Assigned and shared taxes are taxes collected by the Government but the revenue is assigned to or shared with the municipal corporations. Grants-in-aid from the Government come in the form of plan, maintenance of assets, general and specific purpose grants.

During the FYs 1998-99 to 2002-03, the increase in Total Revenue Receipts was largely attributable to grants received from the Government. The percentage share of grants from the Government to the municipal corporation’s Total Revenue Receipts has significantly increased from 0.4% in FY 1998-99 to 23.8% in FY 2002-03. The percentage shares of Own Source Income and Assigned/Shared Taxes declined from 72% to 58% and from 27% to 18%, respectively.

FY 1998-99 Revenue Receipts FY 2002-03 Revenue Receipts 0% Own Source Income - 72% Own Source Income - 58% 24% Assigned / Shared Taxes - 18% 27% Assigned / Shared Taxes - 27% Grants from Government - 24% Grants from Government - 0%

58% 18 %

72%

In terms of average annual growth rate, Own Source Income grew at 6.6%, Assigned/Shared Taxes grew at 1.7% and Grants-in-aid from the Government significantly grew at 222.3%. In absolute terms, the amount of grants-in-aid from Government increased to Rs.121.86 million in FY 2002-03 from Rs.1.13 million in FY 1998-99.

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Revenue Receipts Sources

350 300 250 Own Source Income 200 Assigned / Shared Taxes 15 0 Grants from Government 10 0

50 0 1998-99 1999-00 2000-01 2001-02 2002-03 Fiscal Year

Own Source Income. Own source income is in the form of own tax income and own non-tax income. Own tax income refers to taxes, which the Municipal Corporation is responsible for in terms of their assessment and collection from taxpayers. Own non-tax income includes fees from licenses and permissions, income from municipal corporation’s properties, and income from other miscellaneous items.

During the FYs 1998-99 to 2002-03, the percentage share of Own Tax Income to Total Own Source Income slightly decreased from 86.3% in 1998-99 to 85.6% in 2002-03. Own Non-Tax Income grew slightly higher at an annual average rate of 7.8% than Own Tax Income, which grew at 6.4%.

Percent Share to Ow n Source Incom e Ow n Source Income

110 % 275 100% 250 90% 225 80% 200 70% 175 60% 150 50% 12 5 40% 10 0 30% 75 20% 50 10 % 25 0% 0 1998-99 1999-00 2000-01 2001-02 2002-03 1998-99 1999-00 2000-01 2001-02 2002-03 Fiscal Y ear Fiscal Y ear

Own Tax Income Own Non-Tax Income Own Tax Income Own Non-Tax Income

The major items of own tax income are: property tax, profession tax and entertainment tax. These three municipal taxes contributed about 99% to the Municipal Corporation’s Total Own Tax Income, about 85% to Total Own Source Income and about 49% to Total Revenue Receipts for FY 2002-03.

Property Tax. Property Tax is the biggest source of own tax income of the Municipal Corporation. It contributed about 69% to the Municipal Corporation’s Total Own Tax Income, about 59% to Total Own Source Income and about 34% to Total Revenue Receipts for the FY 2002-03. During the FYs 1998-99 to 2002-03, it grew at an average annual rate of 6.3%.

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Property, Profession & Entertainment Taxes Share to Total Own Tax Income, Own Source Income & Revenue Receipts

550 500 450 400 350 300 250 200 150 10 0 50 0 1998-99 1999-00 2000-01 2001-02 2002-03 Fiscal Y ear

Property, Profession & Entertainment Taxes Total Own Tax Income Total Own Source Income Total Revenue Receipts

The KM Act 1994 provides that the aggregate percentage to be levied for property tax, in the case of a Municipal Corporation, shall not be less than 13% and not more than 25% of the annual rental value (ARV) of all buildings or lands within the municipal area unless exempted under the Act or any other law.

The property tax may comprise of a tax for general purpose and a service tax. The service tax may include:

Water and drainage tax to provide for expenses connected with the construction, maintenance, repair, extension or improvement of water or drainage work provided or hereafter to be provided;

Lighting tax to provide for expenses connected with the lighting of the municipal area by gas, electricity or any other means; and

Sanitary tax to provide for expenses connected with the general sanitation of the municipal area and the removal of rubbish, filth and carcasses of animals from the private premises.

Where water tax and drainage tax are levied, the Corporation Council shall declare what proportion of tax is levied in respect of water works and the remainder shall be deemed levied in respect of drainage works.

The property tax rate schedule as prescribed in the KM Act 1994 and those presently in force in the municipal corporation are as follows:

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Table 6-2: Property Tax -Rate Schedule

Sl. Particulars Minimum Rate (%) for a Municipal Present Rate (%) No. Corporation – KM Act 1994 1. Tax for general purposes 6 7 2. Lighting Tax 2 2 3. Drainage Tax 2 2 4. Water Tax 1 1 5. Sanitation Tax 2 3 Total 13 15

The Municipal Corporation maintains a demand register for all properties assessed for property tax. The last survey of properties was carried out in late eighties. There is a proposal to computerize the property tax database. Under the present system, ARVs are revised once in four (earlier till 1999 was five) years. There has been no change in the property tax rate and ARV since 1992.

According to the 2001 census, the population of the Municipal Corporation area was 596,473 and the total number of holdings was 193,290, which tallies with the number of holdings according to the Municipal Corporation’s record.

The details of demand and collection (current and arrears) for the last three fiscal years are shown in Table 6-3.

Table 6-3: Property Tax – Demand & Collection (Rs. Million)

Account Type 2001-02 2002-03 2003-04 Demand Current 159.4 169.7 165.1 Arrears 72.8 63.9 106.3 Total 232.2 233.6 271.4 Collection Current 132.1 139.2 160.6 Arrears 36.2 36.4 44.7 Total 168.3 175.6 205.3 Balance Current 27.3 30.5 4.5 Arrears 36.6 27.5 61.6 Total 63.9 58.0 66.1 Collection Efficiency (%) Current 82.9 82.0 97.2 Arrears 49.7 56.9 42.1 Overall 72.5 75.2 75.6

The proposal linking property tax assessment to plinth area assessment is still pending for approval by the State Government. Under the proposal, all ULBs are required to switch to a zonal area-linked system involving self-assessment of ARV by the assessed. The new system will classify the municipal area into more than one zone on the basis of, as far as possible, similar locations of the buildings and lands situated therein.

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Profession Tax. Profession Tax is a major own tax income of the Municipal Corporation. It contributed about 18% to the Municipal Corporation’s Total Own Tax Income, about 15% to Total Own Source Income and about 9% to Total Revenue Receipts for the FY 2002-03. During the FYs 1998-99 to 2002-03, it grew at an average annual rate of 37.4%.

Profession tax is levied on companies and individuals vide Section 245 of the KM Act 1994. All companies and individuals transacting business or engaged in profession in the municipal area for at least 60 days in a half year shall pay the tax at rates prescribed by Government. However, Article 276(2) of the Indian Constitution has fixed the maximum tax leviable per year at Rs.2,500. In respect of salaried employees, the definition of income includes dearness allowance in addition to basic salary. The demand and collection performance for the year 2003-04 is outlined in Table 6-4.

Table 6-4: Profession Tax – Demand and Collection (Rs. Million)

Account Type Demand Collection Balance Current 45.00 (100%) 35.29 (78%) 9.71 (22%) Arrears 4.33 (100%) 4.23 (98%) 0.10 (2%) Total 49.33 (100%) 39.52 (80%) 9.81 (20%)

Entertainment Tax. Entertainment Tax is another major own tax income of the municipal corporation. It contributed about 13% to the municipal corporation’s Total Own Tax Income, about 11% to Total Own Source Income and about 6% to Total Revenue Receipts for the FY 2002-03. During the FYs 1998-99 to 2002-03, it declined however at an average annual rate of 8.8%.

The tax is collected according to the provisions of Section 3 of the Local Authorities Entertainment Tax Act. A proposal to tax on the basis of seating capacity and occupancy is pending for approval by the State Government. Entertainment tax is presently fixed between 24 to 48% of the price of admission.

Own Non-Tax Income. During the FYs 1998-99 to 2002-03, Own Non-Tax Income grew at an annual average rate of 7.8%. It contributed about 14% to the municipal corporation’s Total Own Source Income and about 8% to Total Revenue Receipts for the FY 2002-03. Income from Municipal Corporation’s properties contributed the biggest share to Own Non-Tax Income during the FYs 1998- 99 to 2002-03.

FY 1998-99 Ow n Non-Tax Income FY 2002-03 Own Non-Tax Income 2.8% Inco me fro m M un. 21.7% Inco me fro m M un. Properties - 53.1% Properties - 62.5%

License Fees - License Fees - 44.0% 15 . 8 % 44.0% 53.1% Others - 2.8% 15.8% 62.5% Others - 21.7%

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Kerala Water Authority (KWA), an autonomous body created in the year 1984, presently undertakes water supply within the Municipal Corporation area. The Municipal Corporation, therefore, does not have any revenue from water charges.

Assigned and Shared Taxes. At present, there are 2 assigned and shared taxes from the State Government with the local governments. These are the surcharge on stamp duty and motor vehicle tax. Under Section 270 of the KM Act 1994, the surcharge on stamp duty shall be at such rate fixed by the Government but shall not exceed 5% of the value of property transacted. On the motor vehicle tax, the Government shares 20% of the net collection of the tax and is distributed among Village Panchayats and ULBs as per formula based on unit length of roads.

During the FYs 1998-99 to 2002-03, assigned/shared taxes increased minimally at an average annual growth rate of 1.7%. As a result, they decreased their contribution to Total Revenue Receipts from 27.3% to 18.2% during the period. Individually, surcharge on stamp duty contributed 22.0% in FY 1998-99 and 10.5% in FY 2002-03 to the municipal corporation’s Total Revenue Receipts while motor vehicle tax contributed 5.3% and 7.7%, respectively.

Assigned / Shared Taxes vs. Total Revenue Receipts

600 525 450 375 300 225 15 0 75 0 1998-99 1999-00 2000-01 2001-02 2002-03 Fiscal Year

Surcharge on Stamp Duty M otor Vehicle Tax Total Revenue Receipts

Basic Tax, a general tax on land recommended by First State Finance Commission for devolution to the local governments, is still pending before the State Government for implementation.

Grants-in-Aid. During the FYs 1998-99 to 2002-03, the percentage share of grants from the Government to the municipal corporation’s Total Revenue Receipts has significantly increased from 0.4% in FY 1998-99 to 23.8% in FY 2002-03. During the period, grants increased at an average annual rate of 222.3% due to dramatic rise in general purpose grants in the last 2 fiscal years.

Grants-in-Aid vs. Total Revenue Receipts

600 525 450 375 300 225 15 0 75 0 1998-99 1999-00 2000-01 2001-02 2002-03 Fiscal Year

General Purpose Running Transferred Institutions Total Revenue Receipts

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6.2.2 Revenue Expenditures The Revenue Expenditures of the Municipal Corporation are classified and recorded according to the following cost centers: (i) Management and Collection of Taxes; (ii) Public Works; (iii) Town Planning; (iv) Education; (v) Water Supply and Drainage; (vi) Public Health and Sanitation; (vii) Street Lights; (viii) Municipal Properties; (ix) Non Plan Operation Expenses; and (x) Miscellaneous Expenses.

During the FYs 1998-99 to 2002-03, the four most significant cost centers were Management and Collection of Taxes, Public Works, Public Health and Sanitation and Street Lights. The four cost centers accounted for 89% of Total Revenue Expenditures during the period.

FY 1998-99 Revenue Expenditure FY 2002-03 Revenue Expenditure

0.1%

M gt. & Col. of Taxes - 19.7% 1. 4 % 7.2% 9.1% 2.1% 5.2% M gt. & Col. of Taxes - 16.9% 1. 2 % 19 . 7 % Public Works - 10.4% Public Works - 23.7% 9.6% Town Planning - 1.7% 16 . 9 % Town Planning - 1.4%

Educat ion - 0.1% Educat ion - 0.1% 10 . 4 % Water Supply & Drainage - 0.3% Wat er Supply & Drainage - 0.7%

1. 7 % Pub lic Healt h & Sanit at ion - 49 .4% 39.6% Public Health & Sanitation - 39.6%

Street Lights - 9.6% Street Lights - 9.1% 23.7% Municipal Properties - 1.4% Municipal Properties - 2.1% 49.4% 0.7% 0.1% 0.3% 1. 4 % Non Plan Op erat ion - 7.2% 0.1% Non Plan Operat ion - 5.2% M iscellaneous - 1.2% M iscellaneo us - 0 .1%

The expenditures for Management and Collection of Taxes grew at an average annual rate of 1.8% from Rs.41.79 million in FY 1998-99 to Rs.44.95 million in FY 2002-03. With the minimal growth, its percentage share to Total Revenue Expenditures decreased from 19.7% in FY 1998-99 to 16.9% in FY 2002-03.

Public Works expenditures grew from Rs.22.04 million in FY 1998-99 to Rs.63.03 million in FY 2002-03 or an average annual rate of 30%. With the high growth, Public Works increased its percentage share to Total Revenue Expenditures at 10.4% in FY 1998-99 to 23.76% in FY 2002-03.

The expenditures for Public Health and Sanitation grew from Rs.104.66 million in FY 1998-99 to only Rs.105.22 million in FY 2002-03 or an average annual rate of 0.1%. With the minimal growth, Public Health and Sanitation decreased its percentage share to Total Revenue Expenditures at 49.4% in FY 1998- 99 to 39.6% in FY 2002-03.

Street Lights expenditures grew from Rs.20.42 million in FY 1998-99 to Rs.24.28 million in FY 2002-03 or an average annual rate of 4.4%. Street Lights slightly decreased its percentage share to Total Revenue Expenditures at 9.6% in FY 1998-99 to 9.1% in FY 2002-03.

Non Plan Operation Expenses (expenditures for running transferred institutions) decreased from Rs.15.26 million in FY 1998-99 to Rs.13.92 million in FY 2002-03 or an average annual decline at 2.3%. With the decline, Non Plan Operation Expenses decreased its share to Total Revenue Expenditures from 7.2% to 5.2% for the same period.

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Water Supply and Drainage expenditure was insignificant at Rs.1.75 million in FY 2002-03 or 0.7% of Total Revenue Expenditures. This is because the Kerala Water Authority is operating water supply system within the Municipal Corporation area. Drainage accounted for 92% of the Water Supply and Drainage expenditure in FY 2002-03.

The expenditures of the other cost centers had been insignificant during the period. Town Planning’s percentage share to Total Revenue Expenditures was 1.4% in FY 2002-03, Education was 0.1% and Municipal Properties was 2.1%.

Debt liabilities were primarily on loans borrowed from Financial Institutions (Rs.12.71 million) and State Government loans (dues cleared as on 31 March 2003). The Financial Institution loan was drawn from the Kerala Urban Development Finance Corporation (KUDFC) and accounted for monies towards construction of shopping complexes, street lighting and Area Development Schemes. The total outstanding as of 31 March 2003 was Rs.5.27 million.

6.3 Capital Account The Capital Account deals with the non-recurring Capital Receipts and Expenditures of the municipal corporation. Presented in Table 6-5 is the Capital Account of the municipal corporation for the FYs 1998-99 to 2002-03.

Table 6-5: Capital Account (Rs. Million)

Particulars 1998-99 1999-00 2000-01 2001-02 2002-03 Capital Receipts A. Funds from Government a) Grants - Plan Schemes 8.09 109.77 117.70 16.02 103.73 b) Loans - Plan Schemes 0.00 0.72 0.00 0.00 0.00 c) Grants - Transferred Institutions 6.26 0.20 0.35 0.00 0.00 d) Grants - Kerala Development Program 142.12 132.88 154.92 98.46 198.25 Total Funds from Government 156.47 243.57 272.98 114.48 301.98 B. Funds from Financial Institutions - Borrowings 0.00 0.00 4.15 0.00 0.00 C. Investments Realized 0.00 0.00 0.00 2.00 14.56 D. Transferred from Revenue Account 5.95 156.40 69.28 75.80 149.54 Total Capital Receipts 162.42 399.97 346.41 192.28 466.07 Capital Expenditure a. Management 1.63 9.52 10.00 16.57 19.54 b. Plan Schemes 65.00 134.65 23.16 93.56 136.00 c. Poverty Eradication 31.04 116.17 124.18 92.02 99.43 d. Transferred Institutions 12.10 0.20 0.23 0.00 0.00 e. Education 0.00 0.00 0.09 0.01 0.00 f. Water Works & Drainage 0.00 19.61 27.44 2.53 17.01 g. Public Health 0.00 0.00 1.16 0.70 0.00 h. Street Lighting 0.50 0.50 1.08 6.70 19.72 i. General Items of Expenditure 0.00 0.00 0.00 0.00 0.00 j. Expenditure under Kerala Development Program 236.50 132.88 159.09 81.69 80.18 Total Capital Expenditure 346.77 413.53 346.41 293.78 371.87 Capital Surplus/(Deficit) (184.35) (13.55) (0.00) (101.51) 94.20 Source: Kochi Municipal Corporation

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The Municipal Corporation had capital surplus in FY 2002-03 only at Rs.94.2 million (20% of total Capital Receipts). In the other years, the municipal corporation incurred capital deficit. The capital deficit was highest in FY 1998-99 at Rs.184.35 million (113% of Total Capital Receipts). Over the five-year period, the cumulative capital deficit was Rs.205.21 million.

Capital Account

500 400 300 Capital Rec eipts 200 Capital Expenditure 100 Rs. Million 0 1998-99 1999-00 2000-01 2001-02 2002-03 Fis cal Ye ar

6.3.1 Capital Receipts Capital Receipts come in the form of capital grants released by the Government for the implementation of schemes, projects and plans formulated by the Municipal Corporation; capital grants released by the Government for the implementation of schemes, projects and plans assigned or entrusted to the Municipal Corporation under the KM Act 1994; loans from the Government for the implementation of schemes, projects and plans; loans from financial institutions; and transfers from the Revenue Account when the municipal corporation has revenue account surplus. During the FYs 1998-99 to 2002-03, the percentage share of grants from the Government to Total Capital Receipts was 69.5%, revenue account transfer was 29.2%, and investment realized was 1.1% while loan contributed 0.3%.

FYs 1998-99 to 2002-03 Capital Receipts

29.2%

1. 1%

0.3% 69.5%

Grant s - 69.5% Loans - 0.3% Investments Realised - 1.1% Rev. Acct. Transfer - 29.2%

6.3.2 Capital Expenditures The Municipal Corporation classifies and records Capital Expenditures according to the following capital cost centers: (i) Management; (ii) Plan Schemes; (iii) Poverty Eradication; (iv) Transferred Institutions; (v) Education; (vi) Water Works and Drainage; (vii) Public Health; (viii) Street Lighting; (ix) General Items; and (x) Kerala Development Program. Plan Schemes and the Kerala Development

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Program, which is actually a Plan Scheme also, accounted for 65% of capital expenditures during the FYs 1998-99 to 2002-03 while Poverty Eradication accounted for 26% during the same period.

FY 1998-99 Capital Expenditure FY 2002-03 Capital Expenditure

0.5% 18 . 7% 5.3% 21.6%

0.0% 9.0% 36.6% 5.3%

0.0% 3.5% 4.6% 0.1% 0.0% 68.2% 0.0% 0.0% 0.0% 0.0% 0.0% 26.7%

M anagement - 0.5% Plan Schemes - 18.7% M anagement - 5.3% Plan Schemes - 36.6% Povert y Eradicat ion - 9.0% Transf erred Inst it ut ions - 3.5% Povert y Eradicat ion - 26.7% Transf erred Inst it ut ions - 0.0% Educat ion - 0.0 % Wat er Works & Drainage - 0.0% Educat ion - 0.0% Wat er Works & Drainage - 4.6% Public Health - 0.0% St reet Light ing - 0.1% Public Health - 0.0% St reet Light ing - 5.3% General It ems - 0.0% Kerala Development Proj. - 68.2% General It ems - 0.0% Kerala Development Proj. - 21.6%

6.4 Key Financial Issues Municipal finance plays a key role in any local government. While municipal corporations are empowered to levy and collect their own taxes and user service charges, they must be efficient in revenue administration so they can generate sufficient funds from various sources to deliver and finance municipal services. In their delivery of the municipal services, the municipal corporations must be cost efficient and control expenditures within reasonable limits. Otherwise, municipal corporations cannot accumulate adequate surplus funds to undertake additional and future development programs.

The key financial issues affecting the Municipal Corporation that need immediate attention are:

No. Issues Actions Required 1. While Property Tax collection Municipal corporation must exercise all its statutory performance was relatively satisfactory for powers to enforce collection from chronic defaulters. In the last 2 years (about 75% collection addition, it must also explore other means like extensive efficiency), there is significant scope for public awareness campaign or reminder to settle property improving the collection performance. tax, appointment of tax collectors on commission basis, giving discounts or other incentives for early payment, full or partial condonation of surcharges if past accounts are settled in full, etc. 2. There has been no change in the Property State Government must act urgently on the legislation Tax rate and ARV since 1992. required to put the new system in place, i.e. plinth area based Property Tax and once every four years revision. 3. The database on property holdings is Municipal corporation must undertake a detailed survey to outdated. The last survey of properties identify properties that are not included yet in the tax net. was carried out in late eighties. In addition, it must speed up the computerization of the database. 4. There has been no regular revision of State Government must act on the legislation required to other taxes and non-tax income items introduce automatic indexation or periodic revision of other while the costs of revenue administration taxes and non-tax income items. and delivery of municipal services have risen.

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No. Issues Actions Required 5. There is a lack of adequate financial State Government must prescribe that accounts be management and information system. maintained under a double entry accrual based Adequate financial management and accounting system. Asset register must also be kept and information system is necessary for regularly updated. effective revenue administration and cost control. There is also a lack of reliable information as to the assets required to be maintained.

6.5 Kerala Water Authority Finance 6.5.1 Mandate and Sources of Finance The Kerala Water Authority (KWA) was constituted as an autonomous body by the Government of Kerala on 1st April 1984 under the Kerala Water Supply and Waste Water Ordinance 1984 as a successor to the erstwhile Public Health Engineering Department of the Government of Kerala. The ordinance was replaced by the Kerala Water Supply and Sewerage (KWSS) Act 1986.

Section 15 of the Act has given KWA the following mandate:

To obtain periodic or specific information from any local body;

To prepare and carry out schemes for water supply and sewerage;

To abstract water for drinking purposes from any natural source and disposal of wastewater;

To lay down schedule of fees for all services rendered to Government, local bodies, institutions or individuals;

To fix and amend tariffs and charges for water supply and sewerage services and collect all such fees;

To borrow money, issue debentures, obtain subventions, capital contributions, loans and grants, to incur expenditure and manage its own funds; and

To grant loans and advances to such persons or authorities as the KWA may deem fit.

In the initial years of its establishment, KWA had a monopoly over the planning, designing, execution, operation and maintenance of water supply and sewerage schemes across the entire State. This monopolistic role of KWA in providing piped water supply and sewerage services underwent a change after the 73rd and 74th constitutional amendments. Under these amendments, the responsibility of supplying drinking water was vested with local bodies. The change is more marked in the case of rural water supply. Government issued orders in March 1998 defining the procedures for the implementation of small type of water supply schemes covering a single panchayat by the local bodies with technical assistance from KWA and other agencies. As a result, KWA’s role is changing from that of a monopoly provider of water to that of a facilitator and supervisory agency implementing only urban and major comprehensive rural water supply schemes. KWA, however, continues to be responsible for the large underground sewerage and sanitation schemes.

In line with its mandate, the sources of finance for KWA are water and related charges collected from its customers, grants and loans from the Government of Kerala, grants from the Government of India,

FR Volume 2 - City Report - Kochi PAGE 36 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation and loans from financial institutions like Housing and Urban Development Corporation (HUDCO) and Life Insurance Corporation of India (LIC).

6.5.2 Cost Recovery The State Government’s policy on cost recovery for KWA operations is articulated in the KWSS Act 1986. The Act states that KWA “shall not, as far as practicable and after taking credit for any grants or subventions or capital contributions or loans from Government, carry on its operations at a loss and shall so fix and adjust its rates of taxes and charges as to enable it to meet as soon as feasible the cost of its operations, maintenance and debt service and where practicable to achieve an economic return on its fixed assets.” The Authority, however, has to take prior approval from the State Government for the revision of its rates.

Water Supply The existing water tariffs shown in Table 6-6 came into effect on 1 April 1999 but have not been revised since.

Table 6-6: KWA Water Tariff Schedule

Customer Monthly KL Rate Category Consumed Domestic 0 –10 Rs.2/KL subject to minimum of Rs.20 / month + Rs.2 as MIC 10 –30 Rs.22 + @ Rs.3 /KL for above 10 KL 30 –50 Rs.82 + @ Rs.5/ KL for above 30 KL Above 50 Rs.182 + @ Rs.7.35 /KL for above 50 KL Non-Domestic 0 –50 Rs.7.35/KL subject to a minimum of Rs.100 / month + Rs.2 as MIC Above 50 Rs.370 + Rs.10.60 /KL for above 50 KL Industrial Whole consumption Rs.10.60/KL subject to minimum of Rs.200 / month + Rs.2 as MIC

Water connection fees are Rs.500 for domestic and Rs.1,000 for non-domestic. Government local bodies are charged for the standposts / street taps provided in their areas at the rate of Rs.2,628 per street tap each year. Local bodies, however, are not charging any fee directly from street tap users. Water charges per month are collected by KWA under the Provisional Invoice Card System.

KWA had requested the State Government in January 2000 to increase the water tariff by 30% effective 1 April 2000 and to allow KWA to revise the water tariff from time to time corresponding to the increase in power tariff. The State Government is yet to take a decision on this request.

All water connections are supposed to be metered. But, as per KWA’s Water Supply Regulations, the responsibility of the safe custody and sound condition of the water meter is vested with the consumer. If the meter is found defective the consumer shall repair or replace the defective meter within 30 days on receipt of notice, at his own cost. In case of default, a surcharge is imposed at the rate of 25% on the monthly water charges for the first month after the expiry of the notice period; 50% for the next two months and 100% beyond that period. In case of continued default, KWA shall have the power to disconnect the water supply to the premises without further notice.

It is estimated that more than 50% of water connections have defective meters. However, KWA has not been successful in implementing its regulations on defective meters. The consumers have

FR Volume 2 - City Report - Kochi PAGE 37 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation challenged the regulations on defective meters as being against the KWSS Act 1986. A proposal to amend the Act is now under consideration.

Sewerage At present, sewerage schemes are in operation only in two cities in the State, i.e. Thiruvananthapuram and a part of Kochi. Except for a sewer connection fee, see Table 6-7, there are no monthly or annual sewerage service charges collected.

Table 6-7: KWA Sewerage Connection Fee

Customer Category Rate Domestic 10% of the estimate cost - minimum Rs.500 Non-domestic 10% of the estimate cost - minimum Rs.1,000 Casual 10% of the estimate cost - minimum Rs.1,000 Industrial 10% of the estimate cost - minimum Rs.2,500 Source: KWA

6.5.3 KWA Financial Performance in Kochi

KWA’s operation in Kochi has service connections of 59,681 domestic, 5,093 non-domestics, 86 bulk consumers and 6,320 public standposts for water supply and 800 sewer connections. Presented in Table 6-8 is a summary of the direct income and expenditures of KWA’s water supply and sewerage operations in Kochi.

Table 6-8: Kochi Water and Sewerage Operations – Income and Expenditure (Rs. Million)

Particulars 2002-03 2001-02 2000-01 1999-00 Income Operating Income * 164.69 176.97 159.40 106.89 Non-Operating Income (mostly penalties) 65.73 51.98 41.09 12.00 Total Income 230.41 228.95 200.49 118.89 Expenditure Salaries & Allowances 53.52 48.16 55.72 45.91 Power Charges 5.44 4.56 12.05 14.12 Consumables ( including chemicals) 0.81 1.61 1.24 1.25 Repairs & Maintenance ** 6.20 10.14 10.17 6.27 Administrative & Other Expenses 2.15 2.58 2.28 2.08 Total Expenditure 68.12 67.06 81.45 69.64 Surplus (Deficit) 162.29 161.89 119.03 49.25 * Includes Sewer Connection Fee 0.90 2.79 1.03 0.84 ** Includes Sewer Maintenance Cost 0.01 0.01 0.14 0.01

Excluded in the above expenditures are the direct water production costs, depreciation of Kochi fixed assets and indirect costs which could be allocated like interest and head office expenses. Kochi operation involves only the distribution of water coming from KWA’s Aluva head works. Under this operating set-up, the water production costs for Kochi are recorded under Aluva Division’s costs. KWA could not provide the water production costs pertaining to Kochi operations.

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The surplus results in the Kochi operations as presented above could be misleading due to lack of water production costs. Likewise, the resulting operating cost recovery ratio if calculated based on the above data could be misleading for the same reason. If the water production costs were included, it is possible that Kochi operations would continue to incur operating losses due to the extremely high non-revenue water (NRW) estimated at about 60% of water produced.

During the FY 1999-00 to FY 2002-03, operating income grew at an average of 15% while expenditures decreased by 1%. This could be attributed to the increase in consumer base and cost control measures undertaken by KWA. Non-operating income, mostly late payment charges imposed and collected by KWA, grew incredibly at 76%. Collection efficiency on Kochi accounts was about 50% which was higher than the state average efficiency of 22%.

6.5.4 Key KWA Financial Issues The key issues affecting the financial performance of KWA that need immediate attention can be summarized as follows:

Non-Revenue Water (NRW)

Issue: The high NRW in KWA has been the major cause of its financial losses. The level of NRW has reached to a point that it could outweigh the financial benefits to be derived from other revenue enhancement and cost control/reduction measures to be implemented by KWA.

Action Recommended: KWA needs to put in place a comprehensive NRW reduction program. The program should include other parts of the state in addition those that will be implemented under KSUDP and JBIC funded projects on water supply.

House Connections versus Standposts

Issue: The census 2001 indicated that only 40% of the urban population in Kerala had access to safe drinking water, compared with the national average of 69%. This statistic has been recognized by the state government which has an un-written social policy to improve the state percentage. As a result, water lines have been extended and public standposts provided, often irrespective of the pressure and volume of water available for distribution.

Action Recommended: As part of the NRW action, a policy should be agreed to increase the provision direct house connections in place of providing public standposts. This action would reduce the burden of the ULBs for the payment of standposts by increasing consumers directly connected into the water tariff net. Standposts that are required due to social ‘safety-net’ necessity should be metered as part of improving accountability and management procedures. The overall result will provide a better service to all customers by reducing wastage.

Defective Meters

Issue: The huge number of defective meters could render ineffective any kind of measures to reduce NRW. Without functioning meters to measure actual water production and usage, water consumption is prone to wastage and consumers tend to be under billed.

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Action Recommended: KWA should give priority for the replacement of defective meters. If the present regulations on defective meters could not be implemented due to differences in the interpretation of some sections in the KWSS Act 1986, KWA should get a court ruling on this issue or have the Act amended to clarify the issue once and for all. For proper operational management of the system, KWA should be responsible for the provision and maintenance of consumer meters.

Collection Efficiency

Issue: Collection efficiency has been very low. Implementation of disconnection policy on long overdue accounts has been lax. KWA’s cash flow has been hampered by the chronic delay in payment by government local bodies and a large portion of outstanding accounts belonging to them.

Action Recommended: Strict implementation of disconnection policy on long overdue accounts should be carried out. Customers normally pay if disconnection policy is strictly implemented. The State Government should assist KWA with regards to the collection of accounts owed by the government local bodies. The Government should devise an inter-government payment system that facilitates the accounts settlement among the different government bodies and institutions without sacrificing the proper recording and accounting of expenses and control procedures of the concerned institutions.

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7. URBAN PLANNING AND LAND USE MANAGEMENT

7.1 Planning Efforts in the Past In Kochi6, as early as 1890 there was a Committee of Merchants to look after the sanitary arrangements of Mattanchery and another Committee of Officials to supervise the sanitation and conservancy of Ernakulam.

In 1896 regular Sanitary Boards superseded these Committees. The function of these Boards mainly consisted of road cleanliness and street lighting. In 1909 the ruler of Kochi to make adequate provision for the town councils of Ernakulam and Mattanchery enacted the Municipal and Sanitary Improvement Regulation. For Fort Kochi, the provisions of the Madras Town Planning Act, 1920 were applied.

A comprehensive approach to the planning of urban areas of Kochi and its surrounding area was initiated after Kerala State was reorganized in 1956 and the Town and Country Planning Department was constituted in 1959. Govt. of Kerala (GoK) accorded sanction for the preparation of a Development Plan for the Kochi region to the Town and Country Planning Department in 1961. The Town and Country Planning Department brought out an Interim Development Plan in 1966 for Kochi region, which included six municipal towns and 51 panchayats. The Interim Development Plan (1966) identified the development of townships at Kalamassery, Trikkakara, Ambalamugal and Eloor.

The Kochi Development Plan was formulated in 1976, which included development of primary zone of Kochi city consisting of five Municipalities and 33 Panchayats incorporated into a comprehensive policy document. The Development Plan (1976) prepared by Greater Cochin Development Authority (GCDA) for Kochi region delineated the primary influence zone of Kochi city as Greater Kochi (73,131 Ha as per 1981 Census), which includes five municipalities and 33 panchayats around Kochi Corporation. Development Plan (1976) aimed at rational distribution of population, coordinated transportation network, and broad land use plan. The main proposals and status of the Development Plan (1976) are detailed in Table 7-1. At present, the GCDA and the Town and Country Planning Department have undertaken the work of preparing a Perspective Plan for Kochi Region for the year 2025.

Problem associated with preparation of Perspective Plan is up-dating town base maps and existing land use maps, which are used as a basis for formulating development proposals. The existing land use (1981) map available is outdated and is not accurate for authentic physical planning. Recent developments and extension of the cities are often not included. Aerial photographs and high- resolution satellite images are potential data sources for spatial information for future planning activities.

6 Kochi was earlier known as Cochin.

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Table 7-1: Development Plan (1976) Proposals and Status

Proposals Status Housing Scheme Panampilly Nagar Housing Scheme (This is included Almost completed, funded by HUDCO under Ernakulam West DTP Scheme and Ernakulam West Extension DTP Scheme) Gandhi Nagar Housing Scheme Almost completed, funded by HUDCO Indira Nagar Housing Scheme Completed, funded by HUDCO Thottakattukara Housing Scheme Completed Aluva HIG Scheme Completed Paravoor Housing Scheme Completed Vaduthala MIG Scheme Completed Thrikkakara Housing Scheme Partially completed, funded by HUDCO. Edathala Housing Scheme Phase 1 had been completed. Kasthurba Nagar Housing Scheme Completed Transportation Kaloor-Kadavanthara Road (22m wide road having a Completed except for a small stretch of 100 m. length of about 4 kms) Construction of ROB at Kathrikadavu Completed Widening of Sahodaran Ayappan Road (in association Its in advance stage of completion with Corporation of Kochi) Extension of Panampilly Nagar Road Almost Completed. Formation of Bund Road New Bridge at Chilavannur Completed Palluruthy-Manassery road Bridge completed Irimpanam-Angamaly Road Seaport Airport road, phase 1 between Irimpanam Kalamassery completed. New Mattanchery Bridge On BOT terms completed Pandarachira Bridge (Rameshwaram Scheme Area) Under process Commercial Tower and Eastern Entry provision for Building Completed Ernakulam Junction Railway Station (South commercial Development Scheme) Source: Greater Cochin Development Authority.

7.2 Land Use Management 7.2.1 Land Use Pattern The main impact of urbanization processes has been expansion and constant change of urban land use. Physical, social, political and economical factors have played their decisive roles in forming Kochi city’s land use pattern. Of the total developed area in Kochi, 50.08 sq. km is under residential use. The high percentage of land use for residential area is due to the local preferences for low-rise / low density housing. Table 7-2 provides a break down of the city’s land use.

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Table 7-2: Existing and Proposed Land Use in Kochi Corporation

Category Existing Area in Land Use (%) Proposed Area in Land Use (%) 1977(sq. km) 2001 (sq. km) Residential 47.51 50.08 35.82 37.76 Commercial 1.56 1.65 2.06 2.17 Industrial 1.62 1.71 38.59 4.07 Transportation 5.43 5.73 12.85 13.54 Recreational 6.35 0.67 5.58 5.88 Water Courses 22.0 23.40 18.79 19.80 Agricultural 11.95 12.59 7.88 8.31 Public & Semi-Pub 3.95 4.17 8.03 8.47 Total 94.88 100.00 94.88 100.00 Source: Greater Cochin Development Authority, Kochi.

7.2.2 Development Pattern The physical development of Kochi is along major transportation corridors where Fort Kochi, Mattanchery and Thripoonithura are the oldest settlements. Ernakulam, Fort Kochi and Mattanchery are of mixed land use with predominant commercial activities. Eloor, Udyogamandal, Kalamassery and Aluva in the North and Brhamapuram and Ambalamugal in the East are industrial areas. In the northeast Kakkanad is the institutional area and houses the District headquarters.

In Kochi there are three main growth centers: Cheranelloor, Thrikkakkara and Maradu-Kumbalam.

Thrikkakkara is the administrative capital of the District and houses educational institutions and industrial establishments. This character of the region will be maintained.

The growth center at Maradu-Kumbalam, which is at the Southern fringe of Kochi region, is proposed for tourism development. This area is at the intersection of NH 47, NH 49 and NH 47A link road. National Waterway No.3 and Alappuzha coastal rail passes through this area. Consequently this growth center is well linked to Kochi Port and other parts of the region. The rail, road facilities and the waterway facilities are essential for growth in tourism in this area. Private investments such as International Convention Centre, Le Meridian Hotel, White Fort Hotel, BTH Sarovaram, etc. indicate the trend and potentials for tourism related development in this growth center. Lake Shore Hospital and EEC are other major investments in the region.

Cheranallooor is also well linked to the hinterland by a good transport network. NH 17 and National Waterway No. 3 pass through Cheranalloor. The proposed rail link to Kochi Port is through Cheranelloor. This area is within close proximity to industrial areas of Eloor and its linkage to the Port makes it suitable for industrial development activities. This centre has potential for wholesale trading and related storage facilities. Figure 7-1 indicates the development pattern and growth directions in the project area.

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7.2.3 Key Issues Key issues affecting urban development in Kochi comprise: a) Informal Development in Fringe Areas. Areas like Kalamassery, Thrikkakara, Eloor, Tripoonithura and Maradu are under pressure through urban growth but these do not have the level of infrastructure and development control. Major development has taken place by converting agricultural land and low-lying areas for urban use. b) Shelter. There is a shortage of affordable housing in most of the planning area. The urban poor find it difficult to get developed sites for house construction at an affordable price because of the high land cost. This has resulted in the growth of slums, e.g. in Mattanchery. The development Plan (1976) has identified present deficiencies in the housing stock and future requirements but it has not indicated how shelter and land requirements for the urban poor should be provided. It is essential to estimate the actual housing needs of the populace (including affordability), particularly for those Below Poverty Line. c) Poor Management of Water Bodies/Tanks. Deterioration of the quality of water in Vambanadu Lake due to discharge of untreated domestic and industrial effluents. Water bodies and low-lying marshy areas are being reclaimed due to demand for land for development, weak regulations and non-enforcement of environmental regulations that exist to safeguard water bodies. Ground water is the primary source for domestic consumption in newly developed areas but over extraction has resulted in brackish water, especially along the coastal belt. Thus for any future use, ground water exploitation should be effectively monitored and controlled. d) Lack of Co-ordination in Planning. Industrial, residential and infrastructure investment decisions are uncoordinated particularly in the fringe areas where pressure for urban expansion is increasing and has become increasingly difficult to monitor and control development. There is a lack of clarity over departmental responsibilities for land use planning, development, maintenance and enforcement. This has resulted in ineffective and uncoordinated decision- making actions. e) Land Reclamation and Construction. Sand filling of ponds, farmlands, wetlands and other water bodies affects natural water flow and groundwater recharge. Construction of new roads and buildings block many canals, which were important for navigation and drainage. Vast areas of wetlands and paddy fields have been converted into settlement and industrial areas, thereby affecting agriculture and the economy. f) Transportation. The city is directly connected to other urban centers of the region through State Highways and District Roads. These roads radiate from the city center to environs but the operational efficiency of transportation along these radial roads is hampered by poor alignment and road geometry, uncontrolled ribbon development along the roadsides, bottlenecks created by narrow bridges, railway crossing, etc. and lack of links connecting radial roads with each other.

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8. SUBPROJECT RATIONALE - NEED AND DEMAND

8.1 Approach to Subproject Selection The approach taken during the Project scoping exercise and identification of suitable project components included numerous meetings with the Municipal Corporation Mayors and technical staff as well as state line agencies, such as KWA, PWD and Irrigation Department in their respective sectors to determine their development plans and priorities.

In addition, surveys and focus group discussions were undertaken with city households and business communities in order to obtain their considered view on priorities for city development investment.

8.1.1 Municipal Corporation Priorities At the Mid Term Workshop, as part of the working group session, the City Mayors and officers were requested to proportion any funding that might be available for infrastructure improvements as an indicator of civic priority. The results for Kochi are presented in Table 8-1.

Table 8-1: Kochi Municipal Corporation Priorities

City / Sector Water Sewerage Urban Solid Waste Roads & Poverty Supply /Sanitation Drainage Management Transport Alleviation Kochi 20% 30% 20% 5% 23% 3%

8.1.2 Community Priorities As part of the Project preparation, a Baseline Socio-Economic Survey was undertaken in all 5 Project cities. The 1% sample household survey included questions on municipal service delivery and priorities for improvement. For simplicity the results in Table 8-2 show the aggregate of both poor and non-poor for each city against each sector.

Table 8-2: Kochi - Community Municipal Service Priorities

City / Sector Social Water Sewerage Urban Solid Waste Roads & Category Supply /Sanitation Drainage Management Transport Kochi Poor 1 2 3 4 5 Non-Poor 1 2 3 4 5 Clearly, the community priority is for improvements in water supply, sewerage/sanitation and urban drainage, in that order.

8.2 Subproject Objectives and Component Selection Criteria The Project purpose has been defined to assist the selected municipal corporations to “promote good urban management and develop and expand urban infrastructure to increase economic opportunities and to reduce vulnerability to environmental degradation and urban poverty.” The total investment in each city will vary, depending on the level of current basic needs, the city’s affordability, and the assessed implementation capacity of the city or its agencies. Additional details on the Project objectives and selection criteria are provided in Volume 1 - Main Report.

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9. URBAN INFRASTRUCTURE SERVICES

9.1 Water Supply 9.1.1 Development of Water Supply Kochi Corporation consists of Fort Kochi, Mattancherry, Willington Island and part of Ernakulam. The population of Kochi Corporation in 2001 was 596,473 and is projected to be 683,000 by the year 2031. The filtered water system for Kochi city was first introduced in the year 1914 with the development of Chowara water works on the Periyar River, located about 20km from the city.

Table 9-1: Details of Water Production Schemes

Sl Source Distance from Abstraction of Year Remarks No city Raw water 1. Periyar River 20km 48 MLD of water 1965 Rainfed sustainable 2. -do- -do- 72 MLD of water 1969 -do- 3. -do- -do- 70 MLD of water 1993 -do- 4. -do- -do- 35 MLD of water 1995 Under implementation Project assistance from HUDCO/Federal Bank.

In addition, under Kochi Urban Poverty Reduction Program funded by DFID a water supply project at an estimated cost of Rs.170.6 million is under implementation. It is expected that this project will benefit 125,000 of poor community living in the western part of Kochi.

Kochi is the commercial hub of Kerala with an international airport, shipyards, oil refinery, and industrial zones and is also a tourist center. The city is built on a cluster of islands and peninsulas with groundwater in most areas subject to saline intrusion. Based on the studies conducted by Tata Consultancy (1993) the above source will cater to the growing demand of Greater Cochin Development Area for the foreseeable future. The Irrigation Department of Government of Kerala are also constructing temporary bunds about 8 km downstream of the above head works to prevent entry of saline water during lean flow periods.

9.1.2 Treatment and Transmission Raw water is extracted from the Periyar River (Alwaye) from a series of intake wells and pumped to conventional water treatment plants of 225 MLD total capacity. The entire clear water is conveyed by four trunk mains to the city and surrounding areas. A 900mm C.I. pipe supplies water to Perumannur sump at Eranakulam and thereafter boosted directly into the town distribution system, supplying water to Cochin Port, Cochin shipyard, and also to western part of Kochi. Several tappings are provided in the second transmission main (1,050mm diameter), which conveys water to various local bodies and bulk consumers, apart from supply to Eranakulam town at the Thammanam sump. The other two mains are serving Municipality/Panchayat populations, which are located near the Head works.

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There is no system of flow measurement in the transmission or tapping points and hence correct assessment cannot be made regarding the quantity of supply to various bulk supply beneficiaries. In addition, on account of the reduced carrying capacity of the primary transmission main (more than 40 years old) and also due to reduced operating efficiency of pumping plant the net receipt of quantity of water is estimated to be only about 140 MLD. Two water supply improvement projects presently being implemented are due for commissioning by the end of 2005.

9.1.3 Storage and Distribution System Three main distribution stations are in existence, see Figure 9-1. Each station has a ground level reservoir connected to a pumping station with a total storage capacity is 21ML. The city has seven elevated overhead tanks (OHT) with a total storage capacity of 10ML. Out of the above only one O.H.T. located at Thoppumpady is functioning. The remaining O.H.T’s are not functioning due to inadequate water supply of sufficient pressure. The corporation area has a water supply distribution network of about 1,500 km. Various materials have been used for the distribution network from 50mm G.I. pipes to 1000mm diameter concrete pipes.

The distribution network covers the majority of streets within the city. Table 9-2 provides a summary of the types of registered connections to the public water supply.

Table 9-2: Water Supply Connections

Type of Connection Number of Connections Percentage of Population Domestic Household 59,681 41 Public Standposts7 6,320 52 Non-domestic 5,093 - Industrial 86 -

Major part of Ernakulam town is served for more than 20 hours of water supply on account of direct pumping from the sump. But certain areas in Ernakulam experience difficulty in getting adequate quantity of water. In essence, the entire Corporation area and O.H.T’s are not effectively operated. Distribution of water is carried out by direct pumping, but due to poor efficiency of the pumps certain pockets suffer from very low pressures and supply. Furthermore, the age of the pipes in most of the city are reported to be very old. As a result, the distribution network is not functioning satisfactorily.

Acute water scarcity is felt in western part of Cochin and a part of Vypin Island. The main problem is due to inadequate quantity of water through the existing defective concrete pipes which connect Ernakulam town and Kochi Island. In addition, there are problems in operating the system on account of the large number of old corroded pipes with reduced capacity. Consequently, communities resort to

7 On average each public standpost serves 12 families at a maximum distance of 120m.

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FR Volume 2 - City Report - Kochi PAGE 49 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation obtaining water through ‘pit taps’ with supply duration of half to one hour on alternate days. Because of the acute problem, in certain pockets of Kochi Island, water is provided through rainwater harvesting systems and also through tanker supply. The above population is entirely dependant on piped water supply on account of the presence of saline groundwater in the area.

After offsetting the losses in process and distribution, the present per capita availability of water to Ernakulam town is about 90 Lpcd and in the western portion of Kochi the per capita supply is about 25 Lpcd only. Therefore, there is an urgent need for rehabilitation/strengthening of the existing water supply system as a whole, rather than augmentation. Priority will be given for assessment of leakage level in the distribution system and taking necessary steps for rectifying the problem.

9.1.4 Unaccounted for Water In any water supply system, wastage and loss of water should be restricted to the maximum extent. As otherwise, the precious water produced by resorting to high pumping will lead to wasteful expenditure. In addition, the present system is not operating satisfactorily, leading to consumer dissatisfaction in most areas. Due to leaky pipelines particularly in western part of Kochi Island, the communities are forced to take contaminated water. The estimated loss of water in the distribution system on account of leakage is to the tune of 30% (Tata Consultancy Report, 1993) but when taking into account other losses like process, transmission, unauthorized connections, the estimated UFW within Kochi MC is over 60%.

9.1.5 Existing Water Tariff and Collection Performance The present tariff rates have been in operation for the past five years. Under the present collection system, issue of provisional in-service card (PIC) is under progress, and the same is yet to be covered for the entire consumers. The amount demanded is fixed based on actual available meter reading for the immediate past six months to one year. For non-domestic consumers having more than 10KL, meter readings are taken once a month, while non-domestic consumers having a consumption of less than 10KL no fixed meter reading cycle exists. In cases, where meters are not working an alternative of estimating the actual consumption by adopting certain per capita consumption norms are carried out. There are about 650 consumer personal ledgers (CPL) for about 65,000 consumers. The maintenance of these records has been extremely poor. In addition, a large proportion of the meters (50 to 70%) are not working, largely due to the poor water pressure and intermittent supply. In the absence of a water meter workshop, defective water meters are not replaced immediately. It is therefore proposed to have a centralized water meter workshop at Kochi to cater for the entire need of the State. The economics of billing and collection needs examination. Collection efficiency is estimated at 50%. In order to improve the system, the following recommendations are made. a) Maintain monthly meter reading for industrial and non domestic consumers; b) Meter reading frequency in case of domestic consumers as mentioned below:

Category Reading frequency a) High consumption Every month b) Medium consumption Every three months c) Low consumption Every six months

FR Volume 2 - City Report - Kochi PAGE 50 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation c) Initiate facilities for consumers to pay through banks; d) Build up consumer profile characteristics for categorizing consumers; e) Encourage payment through banks over time and restrict usage of counters; f) Maintain separate CPL for domestic and non-domestic categories; g) Early introduction of CPL by proper computerization; and h) Strict implementation of disconnection policy for defaulting consumers.

9.1.6 Operation and Maintenance The Operation and Maintenance (O & M) of various components such as pumping stations, W.T.P, distribution system is carried out by KWA who provides about 350 staff including 80 Engineering cadres. It is common that in-adequate attention is given for proper operation and maintenance of water supply schemes. As a result, the capital investments made in the past have been whole or partially lost. Therefore, it has become necessary for rehabilitation/replacement of certain components before their normal ‘life expectancy’. Proper operation and maintenance should be undertaken in order to retrieve the full benefit, on a long-term basis, from the proposed investments. For effective operation of the system, suitable modalities have to be formulated.

9.1.7 Proposed Water Supply Project Objective The main objective in water supply is in two parts. The first task will be to enhance the efficiency of the existing system by providing a more cost effective production and delivery of water. By a systematic approach of reducing leaks and wastage in the distribution system, it is expected ultimately, that the consumers will be provided with a 24-hours water supply.

The second part is to strengthen the institutional arrangements, introducing better operational practices, with improved collection performance, so that the investments made are beneficial on a long term basis.

Future augmentation for providing water supply facilities for the Corporation for ultimate requirements including the bulk consumers who are located within the Corporation area is also reviewed.

Design Criteria The Tata Consultancy made a study (1991) on the water demand of Kochi Corporation/ Municipalities and surrounding panchayats. TCS concluded that based on the type of water consumption by various categories of consumers, the average per capita demand for water will be about 200 Lpcd. However, for the total demand of water supply for Kochi (augmentation water supply project), TCS has proposed a higher per capita supply of more than 300 Lpcd.

However the CPHEEO standards, consider a per capita supply of 150 lpcd for Metropolitan and major cities provided with piped water supply where sewerage system exists or contemplated. Considering

FR Volume 2 - City Report - Kochi PAGE 51 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation other needs, such as floating population and taking into account of 15% losses for UFW, it is proposed to adopt a supply of 200 Lpcd for Kochi Corporation.

For the adjacent Municipalities it is proposed to adopt 135 Lpcd since there is a possibility of the Municipalities being merged with the Corporation in the future. The per capita supply to Panchayats is limited to only 70 Lpcd as per standards where on-site sanitation is expected to continue. In identifying the physical sub-components, the design parameters / level of services considered are summarized in Table 9-3.

Table 9-3: Water Supply Design Parameters

Design Parameter Present situation Design Criteria Comments City Population 606,565 (2004) 683,000 Design horizon 2031 Population on city At least 97% population with access 567,260 (2004) 663,500 water supply to water main Coverage of sewage facilities for the Supply Rate 89 lpcd 200 lpcd Corporation. Available after other ULBs area Water Production 125 MLD 140 MLD extraction Requires public awareness to reduce Water Pressure 0 -3 m head 2-7 m head wastages. 20 year target –at EOP expect 50% Supply period 2 - 3 hours per day 24 hours of city area in selected areas Un accounted for Less than 20% of 20 year target – at EOP only 50% 60% of production water production city area in selected pilot areas.

Water Source Demand and Production Development Allowing for acceptable long term 15% operational losses, the Water Source Demand is given in Table 9-4.

Table 9-4: Water Supply Demand and Source Development

Sl Description of Item 2004 2011 2021 2031 No 1. Corporation population 606,565 630,000 660,000 683,000 2. Demand of Water Supply @ 200 lpcd 121 MLD 126 MLD 132 MLD 137 MLD (including 15% operational losses)

The present water supply system serves a number of urban bodies, namely, Kochi Corporation, four Municipalities and 27 Panchayats. The system has been planned, designed, and implemented accordingly. Hence, it is necessary that the future design proposals should take into consideration of all the above areas. However, the proposal of delivery of water to the above (other than Kochi Corporation area) is not contemplated in this project. Therefore, the requirement of 350 MLD for the year 2031 will be extracted from the surface water of Periyar River. Based on the TCS report, it is concluded that the above source will cater to the future demand.

Treatment and Transmission The present Treatment capacity is 225 MLD, which will be able to meet the demand of Kochi Corporation. However, considering the overall demand of other ULBs, the total requirement is

FR Volume 2 - City Report - Kochi PAGE 52 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation estimated as 350 MLD by 2031. The additional installation of 125 MLD water treatment plant should be taken up in two stages: a) installation of 75 MLD water treatment plant by 2011 and b) the installation of balance 50 MLD water treatment plant on a later stage.

For the transmission main, the existing conveying main can only deliver about 140 MLD as against the designed quantity of 170 MLD due internal corrosion. After carrying out the proposed rehabilitation works and changing the pump sets at the head works it is expected that it will convey the designed quantity of 170 MLD. Similarly, the laying of another transmission main (1,200 mm diameter M.S. pipe), which is designed to convey 108 MLD water, is under progress. When work is complete, the transmission mains will be able to carry 278 MLD of water.

A further important issue under this component is land acquisition. It has been reported that sufficient Government land will be available for any new water treatment plant in Kalamassery. However, the Government should ensure sufficient land for the future Water treatment plant is made available during the next 10 years. Kerala Water Authority has stated that sufficient land has been acquired for laying both raw and clear water transmission mains.

Storage and Distribution Sufficient storage facilities in the form of elevated O.H.T’s and G.L. sumps are in existence. The distribution network in the Corporation area has a total length of over 1,500 km. As detailed earlier, the main problem is related to availability of sufficient quantity of water delivered to the city. The problems in the distribution system are that most of the pipes are corroded internally as well as externally. It is therefore proposed to rehabilitate/strengthen the existing distribution network of about 200 km, after proper leakage assessment. Nearly 60,000 G.I pipe house service connections within the Corporation area also require replacement.

Table 9-5 provides a summary of the ‘with and without’ effects of the proposed project component on water supply service in Kochi, without any augmentation of supply.

Table 9-5: Water Supply and Consumer Projections

Item 2004 2008 2011 2021 Without Project Population (Total) 606,565 620,000 630,100 659,350 Population with access (%) 94 94 94 94 HH Connection (%) 41 42 44 46 Standpost access (%) 53 51 50 48 Production and delivery losses (%) 60 63 66 70 Ave water supply (lcpd) 89 80 72 61 With Optimization & Strengthening Population with access (%) 94 95 97 97 HH Connection (%) 41 50 63 89 Standpost access (%) 53 45 34 8 Production and delivery losses (%) 60 32 24 15 Ave water supply (lcpd) 89 143 155 165

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The ultimate aim is to provide a 24-hour supply by 2031 for all areas. However, in reality that is very unlikely to be achieved, although without it maximum benefits will not be achieved. By 2011 the aim is to have 50% of selected areas with a 24-hour water supply service. In the early years these will be in the higher income areas where water demand is expected to be greatest and where standposts can be eliminated. Supply to remaining areas should satisfy greatest demand times from 5am to 11pm. On average, supply delivery should be increased from 2-3 hours to 8-12 hours per day covering the 2 peak periods - morning and evening. With the completion of the water optimization planned for 2008 the installed capacity of 140 MLD in 2011 would exceed the demand forecast. Thus, production would have to be restricted to meet demand, which would be managed through metering and an increasing slab pricing structure.

Based on city priorities and capacity for implementation within the project timeframe the sub-project components proposed are summarized in Chapter 10. Further details of project components and cost estimates are indicated in Volume 6 – Technical Analysis, Section A.

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9.2 Sanitation and Sewerage 9.2.1 Existing Sewerage System Overview. There is an existing sewerage system in Kochi, which serves only a small central area of the Municipal Corporation. KWA had prepared proposals for an underground sewerage system covering the entire Municipal Corporation area and Panchayats in 1966 by dividing the project area in four zones. But to date only some pockets in the centrally congested area of Ernakulam South are provided with sewerage. The coverage of the existing sewerage system is only 5% of the total Municipal Corporation area and the adjoining Municipalities and Panchayats lack sewerage.

Features of the Existing Sewerage System a) Sewerage was planned by the PHED in 1966 and taken up for implementation in 1971; b) For the planning and implementation purposes the entire city was divided into four zones A, B, C and D; c) Out of these zones, only a part of Zone B was commissioned. Zone B, which is further divided into five sewerage blocks (A, B, C, D and E) for planning purpose has only Block A (fully) and Block B (partially) functional at the moment and connected to the existing STP of 4.5 MLD; d) Seven pumping stations were envisaged to cover zone B, covering south of Ernakulam; e) Block A of Zone B has one sewage pumping station (PS 1), which is constructed near College Ground for collecting sewage from Hospital Zone, Corporation Office area, etc. The sewage is directly pumped to the existing STP; f) Block B, which also comprises of Gandhi Nagar Colony and Naval Campus, has a single sewage pumping station (PS-7), which pumps sewage from the aforesaid areas to the existing STP; g) All other pumping stations of Zone B (PS-2, 3, 4, 5 and 6) are only planned and not constructed because of funds paucity; h) Existing sewerage system has 800 household connections; and i) Stoneware pipes of 150-225 mm diameters and RCC pipes of 250-600 mm diameter were used.

Details of sewage pumping station operation are indicated in the Table 9-6 below:

Table 9-6: Existing Pumping Station Details

Pumping No. of Pumps No. of Working Discharge of Discharge DG Sets Stations Installed Pumps Hrs. Each Pump to STP Working

PS-1 6-9 AM 2 x 23.5 HP (installed 30 HP#4 nos. 2 11AM-1 PM 28 lps 1.21 MLD (not in 1960) 3-10 PM working) PS-7 9-11 AM (installed 75 HP#4 nos. 1 1-3 PM 225 lps 3.24 MLD - in 1988) Total 4.45 MLD

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Sewage Treatment Plant. Sewage from South Ernakulam is treated at the STP of 4.45 MLD capacity at Fatima Road through an activated sewage process. The STP covers an area of 2 Ha. and treats sewage to achieve an effluent quality of 30 mg/l BOD5 at 50 mg/l suspended solids (confirmed by KWA). Effluent analysis is carried out by a private agency, once a month. Treated effluent is discharged into the Chettichira Lake. Exact flow to the STP is not known due to the malfunctioning of the existing flow meter. Further, screenings and grit are not removed due to mechanical failures. All other mechanical equipments including surface aerators, 8#25 HP are in working condition.

Present O&M Practices. A single sewerage sub division at KWA undertakes daily monitoring of the sewerage system, its appurtenances, two pumping stations and the sewage treatment plant. An Assistant Executive Engineer is in charge of the division supported by an Assistant Engineer, responsible for monitoring the sewage treatment plant and pumping stations. The cost incurred by this division is approx. INR 260,000 per month (according to discussions with KWA), which excludes the salary cost of the O&M staff. Presently no mechanized sewer cleaning methods are employed for daily maintenance of the system.

9.2.2 Existing Sanitation System Kochi Corporation Area. The predominant mode of sewage disposal in the Corporation is through septic tanks. Other forms of night soil disposal include pit latrines, bore latrines, etc. Because of the low lying terrain and relatively high groundwater levels, sewage effluent disposal through individual soakage pits is ineffective and a number of households in the MC area have connected their latrines to existing drains and canals. This has resulted in poor surface water quality flowing in the drains and is a potential public health problem. Table 9-7 indicates the overall sanitation status in Kochi MC area (as per Census 2001):

Table 9-7: Sanitation System in Kochi

Particulars No. of HH Percent of total Total HH as per 2001 census 142,504 HH with WC Latrines/septic tanks 115,285 80.90 HH with Pit Latrine 11,160 7.83 HH with other Sanitary systems 8,418 5.91 HH without any Latrine 7,641 5.36

Slums. According to the data available from Town and Country Planning Dept. (1996), Kochi MC area has 208 slums covering an area of 13,958 ha; 63,324 persons reside in the slums in 12,741 dwelling units. Only 57% of the total slum population has access to latrines. This indicates that of 7,641 households in MC area, which do not have access to latrine, 5,547 households are in slums. Since the average density of slums is quite high, only 30% households have space to build TPPFL or septic tanks.

Kochi Urban Poverty Reduction Project is a joint venture of Kochi MC and DFID, India. The project is currently undertaken for improving the sanitation in slums and urban poor colonies. The project aims at slum infrastructure improvements, which include roads, drains, toilets, street lighting, and city wise components like water supply to West Kochi, flood control, sanitation and solid waste

FR Volume 2 - City Report - Kochi PAGE 56 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation management. These improvements were undertaken at a cost of Rs.707.6 Million. The basic features of this project are: a) Slum Infrastructure Improvement. Includes among other works, roads and roadside drainage as major components with a budgetary allocation of Rs.247.3 Million. 95% progress has been achieved (according to Municipal Corporation Sept. 2003 report), benefiting 39,000 families in 264 colonies. 193 km of roadside drains have been constructed. b) City Wise Improvement. Water supply to West Kochi- benefit population – 125,000 urban poor. Project cost Rs.170 million; 40% achievement so far. The water supply will be increased to 29 MLD against present supply of 10 MLD. This will increase the supply to 232 Lpcd. c) Flood Protection. Out of the total budget of Rs.29.6 Million, Rs.3.3 Million was allocated for flood control of Fort Kochi and Mattancherry areas of the MC. The present intervention will benefit 16 colonies. d) Sanitation. 7,000 targeted families are to be provided with septic tanks, out of which 1,757 septic tanks have already been constructed. The total project allocation is Rs.38.2 Million. The cost of construction of one septic tank is about Rs.6,500/- excluding superstructure (Rs.500 as beneficiary contribution and the remaining as a grant).

The above figures suggest that substantial slum improvement was achieved through the project. Areas not undertaken by the DFID project will be considered while implementing KSUDP/PIAP.

9.2.3 Service Adequacy and Key Issues Since the coverage of sewerage and corresponding sewage treatment capacity is very limited, the majority of sewage is still discharged into open roadside drains leading to pollution of drains/canals. In some low-lying areas, due to poor gradients and tidal effects many drains are completely blocked, affecting hygienic conditions. Problematic areas are Ernakulam South (partly covered by present sewerage system), Mattanchery and Fort Kochi, which are badly affected with polluted roadside drains. Two of the existing pumping stations in Zone B are not equipped fully with power back up.

Sewage from the Municipal Corporation area needs proper treatment before disposal. Treatment of sewage is possible by both off-site and on-site methods. Off-site treatment is financially viable in areas with high population density with sufficient water supply. Considering the present and future water supply demand projections, the Municipal Corporation area alone will produce approximately 100 MLD of domestic wastewater by 2031. Only blocks A and B of Zone B are commissioned and there is urgent need to complete the system in remaining blocks so that Zone B is fully functional and the existing STP is fully utilized. Available land for constructing the sewage treatment plant is a problem, which will limit the extension of the sewerage system in the above-mentioned areas.

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9.2.4 Design Criteria The following criteria are considered for adopting sewerage for Ernakulam and Kochi: a) Adequate Water Supply. More than 100 Lpcd as per CPHEEO guidelines, so that self-cleansing velocities can be maintained in small diameter sewers. The water supply provisions of 200 Lpcd, under KSUDP will be sufficient; b) High Population Density. Areas that have already reached their optimum population density, e.g. core city area with substantial commercial activities. The areas of Ernakulam with dense habitat and commercial establishments thus qualify for sewerage along with Fort Kochi; c) Sufficient Space for the Construction of Sewerage. There should be minimum road width to lay sewers without much inconvenience both during construction and O&M satisfying all environmental guidelines; d) General Environmental Improvement. Considering unhygienic conditions due to overflow of sewage into roadside drains and pollution of nearby water bodies; e) Urban Development Strategy. Consideration of potential future growth areas under Town Planning Strategy; f) Institutional capacity to successfully execute, operate and maintain sewerage facilities; and g) The availability of sufficient land for future expansion of Sewage Treatment Plants.

9.2.5 O&M Staff Requirements a) Operation & Maintenance. The sewerage created through KSUDP would need to be efficiently managed through skilled O&M staff. The primary aim of operation and maintenance of sewerage system and the sewage treatment plants is to keep any installed sewerage facility in a working condition and to maintain and run the plant efficiently so that the effluent from the plant meets the prescribed standards and could be discharged safely on land or into water. The O&M staff entrusted with the maintenance must have knowledge of processes and equipment. For this purpose, a detailed account of problems encountered and material/equipment and spares will have to be kept. There should be periodic inspection of operating staff coupled with regular training in the various operations of the plant. b) Staffing Pattern. Looking at the expanse of the proposed sewerage system and geographical difficulties in maintaining a centralized O&M staff, the project area within MC has been divided into three zones, based on the planning zones. c) Tools and Equipment Needed for O&M. These include suction cum jetting machines for sewer cleaning- 1 number for each zone will be required.

9.2.6 Project Identification Since the whole MC area including South & North Ernakulam and Kochi are geographically separate from each other, it is not techno-economically feasible to prepare an integrated sewerage scheme for these areas and they have to be considered separate. The average density of the MC area is 6,286

FR Volume 2 - City Report - Kochi PAGE 58 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation persons/sq. km with Mattanchery and Fort Kochi area being the most densely populated with 9,700 persons/sq. km. On completion of the ongoing DFID scheme and subsequent increase in water supply to 29 MLD, water supply situation is expected to improve in West Kochi and will consequently increase the demand for a sewage collection and disposal system.

Based on the needs analysis of the existing sewerage and sanitation facilities in Kochi Municipal Corporation area, the following technical projects have been identified under KSUDP (see Figure 9-3) and are detailed and prioritized in the following sections. a) Extension of Sewerage System in South Ernakulam: (complete Zone B) including remaining Blocks C, D and E for full coverage of Zone B. Area covered by this zone is 28.94 sq. km with a population of 171,331 (as per census 2001). Based on the water supply of 200 Lpcd, sewage generation will be of the order of 35 MLD, out of which 4.5 MLD is already treated in the existing STP catering to Block A and part of Block B. Although the space for constructing a separate STP of 30 MLD is not available in this zone, it is viable to expand the present STP of 4.5 MLD, which has a space for accommodating additional STP units of 10 MLD. As some part of South Ernakulam is already covered by sewerage system, it is viable to extend it in wards 43, 56- 61 for further coverage of 60,000 persons in approx. 9 km2. The techno-economic evaluation and cost comparison of different treatment technologies reveals UASB and FAB as viable options. FAB technology is recommended as the most feasible option of sewage treatment as it requires half the land normally required for UASB. The land requirement for 10 MLD STP based on FAB technology will be 0.8 Ha. which is available in the existing STP.

The extension of the sewerage system for the balance population of 90,000 in South Ernakulam should be taken up, once the land for constructing an additional 20 MLD STP is identified. b) New Sewerage System in Kochi: This comprises of high-density areas with a population density of 9,700 persons/sq.km covering an area of 29.76 sq.km (population coverage of 254,080 according to Census 2001). At a water supply rate of 200 Lpcd, the sewage generation for the 2031 population will be 45 MLD. Taking into account the sanitary improvement projects that have already been implemented in some of the areas in Kochi under DFID funded Urban Poverty Reduction Program; the sewerage system coverage shall be limited to only 180,000 persons with treatment capacity of 35 MLD. Considering all these factors, it is viable to cover the most high- density areas in North Kochi, covering wards; 1-3, 6, 21-25 with an approximate population of 100,000. The corresponding treatment capacity of the STP shall be 20 MLD. North Kochi is a highly congested area so sewage will be pumped south to Mundamveli where the Municipal Corporation has land, which can be utilized for the STP construction.

A further STP site will have to be identified for a 15 MLD STP to extend sewerage in South Kochi for a population of 80,000. c) New Sewerage System in North Ernakulam covering areas of Kaloor, Edappally and Vennala. North Ernakulam is a relatively low-density area in comparison to South Ernakulam and Kochi with a population density of 5,234 person/sq.km covering an area of 28.63 km (population coverage of 149,838 according to Census 2001). At a water supply rate of 200 Lpcd, the sewage generation for current population is 24 MLD and for 2030 population is 30 MLD; the private STP

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site has been identified at Edapally, adjacent to the new Medical campus. The STP site requires approx. 2.4 Ha of land. The sewerage works along with the construction of a 30 MLD STP can be initiated once the private land is acquired. Figure 9-3 shows the coverage of existing and proposed sewerage system along with technically feasible locations for sewage treatment plants; A techno-economic evaluation and cost comparison of different treatment technologies preliminary designs and preliminary site layout plan for the FAB based STPs is given in Volume 6 – Technical, Section B. d) Table 9-8 provides site requirements.

A techno-economic evaluation and cost comparison of different treatment technologies preliminary designs and preliminary site layout plan for the FAB based STPs is given in Volume 6 – Technical Analysis, Section B.

Table 9-8: STP Technology and Site Requirements

Area STP (Mld) for STP Area Proposed STP ultimate year Technology requirements Location (2030) (Ha) South Ernakulam (Popn. 60,000) 10 FAB 0.8 Existing 4.5 MLD STP MC land at North Kochi (Popn 100,000) 20 FAB 1.6 Mundamveli North Ernakulam (150,000) 30 FAB 2.4 To be acquired To be identified and South Ernakulam (Popn. 90,000) 20 FAB 1.6 acquired To be identified and South Kochi (Popn 80,000) 15 FAB 1.2 acquired

Sub-Project Component Summary Based on city priorities and capacity for implementation within the project timeframe sub-project component proposed are summarized in Chapter 10, which include the following:

Extension of South Ernakulam city center sewerage with house connections serving 60,000 population;

Extension of sewerage in North Kochi with house connections serving 100,000 population;

Construction of 10MLD STP for South Ernakulam and 20 Mld STP for North Kochi at Mundamveli; and

Sewerage and sanitation maintenance equipment.

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9.3 Urban Drainage 9.3.1 Existing Situation, Service Adequacy and Key Issues Unlike other project cities, Kochi has a relatively flat topography. Topography of the central part of Kochi city is almost flat. The average altitude towards the eastern fringes is about 7.5m above MSL but towards the west the altitude is less than 1m on average. The whole land slopes gradually from east to west. Average annual rainfall in the region is about 2,900 mm. According to records, maximum recorded high tide level for rainy months of mid May to mid November works out as +0.44 m and maximum recorded low tide level is +0.158m relative to MSL. The city has a large network of open drains, which act as major storm water receivers. The quantitative description of drainage system is tabulated below:

Table 9-9: Details of Drains in Kochi

Sl Description of the Item Quantity (Km) No 1. Total length of the drains 689.11 2. Total length of covered drains 148.30 3. Total length of uncovered drains 540.80 4. Total length of Pucca drain 689.11 Source: Irrigation Division, Ernakulam.

The city has about 95 km of storm water drainage canals (Thodu). Zone and ward wise details of the canals and drains are given in Volume 6 – Technical Analysis, Section C. A number of places in the city suffer from water logging/flooding due to the heavy rainfall in the monsoon. The major water logged areas in the city are North Railway Station and its adjoining areas towards the west, South Station and surrounding areas of KSRTC Bus Stand, Mullassery Canal, Kalathilparambil Road, Kaloor-Palarivattom-Mamangalam area, Thammanam-Kadavanthra area, Mattanchery and West Kochi area. During periods of water logging, the normal life and traffic movement of the city is disrupted. The water logging in some roads persists for a few hours whereas flooding in certain low lands continues for a few days. The main reasons for local flooding in the city are: a) Decreased carrying capacity of the existing canals/drains due to heavy silt deposition, discharge of solid wastes in the canals/drains and growth of vegetation in the canals/drains; b) Reduction of canal width due to encroachment; c) Overloading to the existing canals/drains due to unplanned development and haphazard fill up of low land/water bodies without giving due consideration to the drainage system; d) Flow of backwater from the sea to the major drainage canals due to tidal effect. This reverses the direction of the normal flow in the canals and increases the accumulation of silt in the canal bed;

FR Volume 2 - City Report - Kochi PAGE 61 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation e) Inadequate flow capacity in certain culverts that obstruct normal flow in the canals/drains; f) Poor condition of existing culverts resulting in overflow and flooding of adjoining areas; g) Missing links in the existing drainage network; and h) Irregular and inadequate maintenance of the existing canals and storm water drains.

Operation and Maintenance (O&M): The existing city drainage system lacks proper maintenance. The Kochi Municipal Corporation (KMC), State Irrigation Department and Public Works Department are jointly responsible for operation and maintenance of the existing drainage system of the city. The type of drains vis-à-vis agencies responsible for their O&M is tabulated below.

Table 9-10: Agencies Responsible for Drainage

Type of Drain/Canal Agency Responsible Drains along internal roads Kochi Municipal Corporation Drains along the National Highways PWD (National Highways) Drains along State Highways, District Roads & any PWD (Road & Bridge) other major roads Drainage Canal & other water bodies State Irrigation Department

Better coordination among these agencies is essential for maintenance of the overall drainage system of the city. Lack of public awareness is also a factor for poor functioning of the existing drains/canal. Citizens should be made aware of the fact that indiscriminate disposal of the wastes into the waterways not only create drainage problems, but also detriment to their health and hygiene. Separation of city wastes (both liquid and solid) from the storm water flow is very important for the improvement of the existing drainage system of the city. These aspects will be included as part of a Project public awareness program.

9.3.2 Project Identification The following projects have been identified based on the service inadequacy with an intention to minimize/eradicate the flood/water logging problems of the city: a) Detailed study of the city drainage system and preparation of a Drainage Master Plan; b) Improvement of link drains in the most flood prone and waterlogged areas of the central part of the city; c) Improvement of the Thevara-Perandoor Canal; d) Rehabilitation of the major drainage canals in the central zone of the city; e) Rehabilitation of major drainage canals in the Fort Cochin area; f) Improvement of other drains; and g) Covering of existing open drains.

Detailed Study of the City Drainage System and Preparation of Drainage Master Plan: No comprehensive study has yet been undertaken of the city drainage system. This results in a lack of adequate information to deal with the city’s drainage problems. The low lands which otherwise were the recipients of storm water runoff have been filled up due to haphazard and unplanned growth

FR Volume 2 - City Report - Kochi PAGE 62 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation without giving due consideration to drainage. Some studies have been done for the city drainage but these only cover parts of the city. A comprehensive study of the entire city drainage system is therefore essential to achieve the following objectives: a) Preparation of a base map of the city for drainage with contours; b) Preparation of storm water drainage inventory for easy identification of the status of the existing drains/canals and their catchment areas; c) To have a comprehensive database and mapping for better planning and management of the city drainage; and d) To identify missing links and prioritization of works.

As part of the Detail Design a study of the city drainage system will be undertaken and a drainage master plan prepared to determine the short and long-term drainage proposals for the city.

Improvement of link drains in the most flood prone and waterlogged areas of central part of the city: The central part of the city is the most affected area particularly during the monsoon. A large number of places are flooded and water logged. The flood prone areas have been categorized into the following six zones: a) Zone-I: Kotte Canal, Town Hall, Kalabhawan and areas north of Banerjee road; b) Zone-II: M.G.Road, north of Mullassery Canal; c) Zone-III: KSRTC bus stand area between A.L.Jacob road and Veekshanam road; d) Zone-IV: KSRTC bus stand-Karikkamuri Ernakulam Railway Junction area; e) Zone-V:K.S.N.Menon road, V.R.M. road, Kizhavana road-South Panampilly Nagar area and; and f) Zone-VI: Some stretches of low lying area in Panampilly Nagar in the vicinity of T.P.Canal.

In order to minimize/eradicate flooding to these areas the following project components have been identified: a) Construction of New Drains (Approx. length 900 m) and reconstruction of existing drains (Approx. length 600 m) for Zone-II; b) Construction of New Drains (approx. length 400 m) and reconstruction of existing drains (Approx. length 300 m) for Zone-III; c) Construction of new drains (approx. length 900 m), one culvert and reconstruction of existing drains (approx. length 500 m) and three culverts for Zone-IV; and d) Construction of new drains (approx. length 1550 m) and culverts (5 nos.) and reconstruction of existing drains (approx. length 750 m) for Zone-V.

It is understood that the improvement works for the link drains in Zone-I and Zone-VI have already been taken up. Hence, these components have not been included in the KSUDP.

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Improvement of the Thevara-Perandoor Canal: Thevara-Perandoor Canal (T.P.Canal) is passing through the heart of the city and is a major recipient of the city storm water runoff. Though the canal is named as the T.P canal, there is no effective linkage of the canal between the Thevera side and the Perandoor side except by a 900 mm diameter pipe at the point of crossing of the railway track to Kottayam. At present the canal flow is restricted due to lack of a proper linkage between the Thevera and Perandoor sides, reduction of canal width due to encroachment, constricted flow capacity in certain culverts and deposition of silt and other wastes in the canal. The canal also receives backwater from the sea during high tide periods. A low carrying capacity combined with reverse backwater flow has made the canal a pool of stagnated water rather than a drainage outlet. The adjoining areas are flooded once the flows exceed the carrying capacity of the canal. Besides flooding the adjoining areas, the stagnated water in the canal encourages breeding of mosquitoes and other disease vectors. In order to improve the existing canal, the following components have been identified: a) Protection of both sides of the canal. Parts of the (9 km) canal are already protected. The remaining unprotected length is required to be protected from erosion and encroachment. b) Provision for fencing the canal. Wastes from the shops and market areas in Kadavanthra and Kaloor are directly disposed in to the canal. Providing wire mesh fencing in these areas will reduce the possibility of direct waste disposal in the canal. c) Provision for desiltation of the canal. Municipal Corporation of Kochi is already carrying out desiltation of the canal in the Thevera side. Hence, desilting for this part of the canal is not been taken under the KSUDP. Desilting provision under the KSUDP is therefore considered for the Perandoor stretch of the canal. d) Reconstruction of few existing culverts and repositioning of KWA main pipelines. The following eight culverts are required to be reconstructed with increased vent way provision:

Culvert near KRL pipeline crossing near KSRTC bus stand;

Culvert on the road to KSRTC in the eastern side of railway line;

Railway pipe culvert;

RCC culvert (foot over bridge) CBI office;

Church road culvert;

Culvert near sky line marble arch;

Reserve Bank staff quarters road culvert; and

Kaloor main road culvert. e) Provision for high capacity pumps of 100 HP each- 3 nos and 2 nos Sluice gates. In order to drain out the stagnated water, one high capacity pump (100 HP) is proposed to be installed at the one side of Ernakulam-Kottayam Railway line. In addition, two more pumps (100 HP each) to be installed at the two end points of Thevara-Perandoor canal at Thevara (Anamthuruthi) and Perandoor end with sluice gates, so as to easily pump out the excess canal water. f) Eviction and Rehabilitation of Encroachment. The canal is encroached in a number of places along its stretch. A number of slums are there in Thevera, Sneha Nagar, Uday Nagar and

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Pottakuzhi road along the canal. It will therefore necessary to remove the encroachments and providing resettlement/rehabilitation as required, to maintain the actual canal width for increasing its carrying capacity and better flow.

With the implementation of the above project components, the flood prone areas such as Panampally Nagar, Snehanagar Colony, Kaloor Journalist Colony, Indira Nagar Colony, Judges Avenue, Kattakara Road and Athiparambil lane at Kaloor are likely to be directly benefited. However, this scheme would require a detailed R&R plan for the removal of encroachments if included under KSUDP.

Rehabilitation of the Major Drainage Canals in the Central Zone of the City: In addition to improvement of the T.P canal, rehabilitation of the following canals is required to improve the drainage system of the central zone of the city: a) Railnagar Canal; d) Thevera Canal; b) Marshalling Yard Canal; e) Koithara Canal; and c) Ponnethchal Canal; f) Market Canal.

The Railnagar Canal, Marshalling Yard Canal and Ponnethchal Canal are situated in the eastern side whereas the Thevera Canal, Koithra Canal and Market Canal are located in the western side of the T.P canal. These canals are major drainage outlets of a number of flood prone areas in the central part of the city. The following canals are identified as requiring rehabilitation work: a) Side protection and desilting of Railnagar Canal; b) Side protection and desilting of Marshalling Yard Canal ( approx. length of the canal is 600 m); c) Side protection and desilting of Ponnethchal Canal (approx. length of the canal is 2 km); d) Side protection, desilting and eviction of encroachment of Thevera Canal (approx. length of the canal is 1.5 km); e) Side protection (for a length of 1 km), desilting (for a length of 0.9 km), reconstruction of culverts (2 Nos.) and eviction of encroachments of Koithra Canal; and f) Desilting and fencing of Market Canal (approx. length of the canal is 0.8 km);

Improvement works of Mullassery Canal has already been undertaken, hence, it is not been included in the KSUDP. The areas which will be mainly benefited from this project are railnagar, the area between Chilavannoor road and Kochukadavanthra road, part of Panampilly, Kasturba Nagar and Ernakulam market and adjoining areas. However, the Koithra Canal scheme would require a detailed R&R plan for the removal of encroachments if included under KSUDP.

Rehabilitation of Major Drainage Canals in the Fort Cochin Area: Following drainage canals have been identified to improve the storm water drainage system in the Fort Cochin area:

Rameswaran-Manthra Canal;

Pandarachira Thodu; and

Pallichal Thodu.

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Components identified to rehabilitate these canals are as follows: a) Cleaning, desilting, fencing, reconstruction of culverts and rehabilitation slums of Rameswaram- Manthra Canal (Approx. total length of the canal is 6.25 km); b) Side protection (approx. length 900 m), desilting (approx. length 3.5 km) and reconstruction of culverts (3 nos.) of the Pandarachira Thodu (approx. total length of the canal is 4.1 km) and eviction and rehabilitation of encroachment (about 500 families); and c) Side protection (approx. length 400 m) and desilting (approx. length 500 m) of Pallichal Thodu (approx. total length of the canal is 3.50 km).

The rehabilitation of the above major canals is likely to improve the existing drainage system in the Fort Cochin area. However, the Rameswaram-Manthra Canal and Pandarachira Thodu schemes would require a detailed R&R plan for the removal of encroachments if included under KSUDP.

Improvement and Covering of Other Drains: Drains that are damaged or silted-up and having missing links needs to be improved. Also, open drains need to be covered with the provision of manholes to facilitate the cleaning/maintenance. Covering of the drain shall minimize the possibility of direct disposal of solid waste in to the drain, mosquito breeding and other nuisance. Covering of road side drains in the congested areas of the city will prevent the possibility of occurrence of accident and these can be used as pedestrian pathways. About 272 km of open drains in the city are required to be covered. Based on city priorities, any requirement for R&R and capacity for implementation within the project timeframe the drainage component proposed is summarized in Chapter 10.

9.4 Solid Waste Management This section analyses the solid waste management system prevailing in Kochi in terms of collection, transportation, treatment and disposal. The situation analysis addresses both the qualitative and quantitative aspects in terms of process, mechanism, tools and equipment used and other related issues. Deficiency analysis is undertaken, comparing the prevailing situation with that of various standards/norms available. Finally, issues and problems related to various aspects of solid waste management are summarized for improvement measures and to determine tentative cost estimates.

9.4.1 Present Situation Analysis – Municipal Solid Waste Solid Waste Generation Recent studies8 on solid waste generation in Kochi indicate an average waste generation of 707 grams per capita per day. Based on the Census 2001, a population of 0.60 million for generates total waste of 421.50 MT/day. Table 9-11 indicates the source-wise solid waste generation at the corporation level.

8 Strategy for modernization of Solid Waste Management in Cochin, School of Planning, CEPT Ahmedabad, October 2003.

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Table 9-11: Solid Waste Generation in Kochi (2001)

Sl. Sources of Waste Generation Waste Generation Per day (MT) Percentage to the Total No. 1. Domestic waste 279.12 66.22 2. Commercial 89.15 21.15 3. Institutional 10.66 2.53 4. Road sweeping 18.63 4.42 5. Drain cleaning 7.97 1.89 6. Clinical waste 9.31 2.21 7. Construction/ Demolition 6.66 1.58 Total 421.50 100.00 Source: Kochi Municipal Corporation.

Waste Composition The studies provide details on the physical composition of waste; Table 9-12 summarizes the physical composition of wastes generated in the city.

Table 9-12: Physical Composition of Waste

Physical Composition Percentage by weight

Paper 4.90 Vegetable 58.00 Metals 0.70 Glass 0.30 Plastics, rubber 1.10 Wooden matter (coconut shells, husk, etc.) 6.00 Stones, earth 14.00 Textiles 2.00 Miscellaneous 13.00 Total 100.00

Street Cleansing Under the Kerala Municipalities Act 1994, road/street sweeping and drain cleaning are obligatory responsibilities of the Municipal Corporation (MC); the MC shall also arrange to collect and dispose solid waste generated in the city. The Municipal Corporation area has been geographically divided into 66 wards deploying 88 Sanitary Workers and 15 Drivers under the supervision of a Sanitary Inspector. The sweepers of the Kochi Municipal Corporation are provided with the tools/equipment like brooms made of coconut leaves, baskets, wheelbarrows/push carts and “monvetty”/shovels for the street cleansing operation. Only the main roads and city center area are cleaned daily; the cleaning frequency for other parts of the city varies. Street sweepers keep the waste collected in small heaps, which are removed by a handcart collection crew.

Primary Collection and Storage In Kochi, a large section of households, shops and commercial establishments generally do not practice waste segregation at source. A few households/commercial establishments separate recyclable / reuse waste and sell the same to kabadiwalas/scrap dealers. In Division 61 (Pamanpally Nagar), 100% waste segregation is practiced in 3,158 households.

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Currently residents leave their household refuse at the nearest open temporary storage point in the morning from where it is collected by the Municipal Corporation (MC) staff. Market waste is directly collected from large heaps accumulated in front of the market; none of the market stalls have individual containers. At the Central Market, the common practice is to dump waste into the adjacent canal. However, a container collection system has been adopted in one market and at a few commercial centers where 5 cu. m containers were replaced by dumper placers. Only 50% of the hotels keep the waste in plastic or gunny bags for the municipal workers to collect. Shops have no individual storage bins.

There are 576 waste collection points located within the Kochi MC area using a variety of methods for primary collection and storage of solid waste consisting of: (i) open storage points; (ii) concrete cylindrical bins; (iii) small steel bins; (iv) side loader type steel bins; and (v) dumper placer containers. All bins except the dumper placer containers are manually emptied.

Open Storage Points. Secondary open collection points are open spaces for waste disposal identified by the conservancy staff; these collection points collect waste from households, street sweepings and drain cleaning. There are 300 such locations spread across the city;

Small Bins. These are green color bins made of steel and in a hexagonal shape of 0.25 cu. m and 0.49 cu. m storage capacity. These bins are located in residential areas and along main roads;

Concrete Cylindrical Bins. Primarily used in Fort Kochi, these bins are being phased out due to difficulty in emptying;

Side Loader Type Steel Bins. These are yellow colored bins made of steel and in a hexagonal shape with usually located along main roads. There are approximately 40 such bins designed for mechanical unloading but most of these bins are in a dilapidated condition and unfit for use; and

Dumper Placer Containers. There are 58 such containers in the city and are placed at areas where generation is high. These containers are green in color and have a capacity of 5 cu. m and 7 cu.m.

Kochi MC has initiated a pilot scheme for door-to-door collection of garbage in a few housing colonies in Circle 14 covering 570 households; this pilot scheme receives active support of the neighborhood committees and divisional committees. Six-bin handcarts with 60-litre bins are used in one colony while a tractor goes directly to the other. The six-bin cart collects waste on alternate days and empties the waste into 5 cu. m containers, which are transferred to the dumping ground by dumper placers.

Waste Transportation The Kochi MC’s Health Department has a fleet of 47 collection vehicles. Loading and unloading operations are both mechanized and manual. Of the total 47 vehicles, six vehicles are at the workshop for repair. Only 32 lorries, four dumper placers and five tractors are involved in primary and secondary collection of waste on a typical day. Out of the 34 lorries, 30 are on hire. Kochi MC does not have its own workshop facilities. Vehicles are sent to local/private workshops for maintenance the annual operation and maintenance of vehicles is approximately Rs.7.5 million. Approximately 80% of the waste generated is collected and transported by the vehicles.

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There is no routine planning for collection and transportation of waste from different parts of the city. Vehicles collect waste from open storage yards/dustbins as and when required, especially in residential areas. These sites are often attended to more based on complaints received. Most open storage points/dustbins are not cleared on a day-to- day basis. The garbage is removed from 06:30 hours to 13:00 hours. A waste transfer point (dumping yard of 30 cents) located near St Teresa’s Convent is currently operational but this site is expected to close as there is protest from the surrounding residents and commercial complexes. Details of the solid waste management system are in Figure 9-2.

Disposal and Treatment of Wastes Waste disposal was originally carried out at Cheranallor Panchayat in an area of 1 Ha; the site was closed in July 2004. An alternative dumping site of 5 Ha was available at Thripunithura (14 km from Eranakulam City Center); the site is in a low-lying area and is currently water logged. Kochi MC currently disposes waste in the low-lying areas of Wellingdon Island along National Highway 49A without any treatment or environmental protection.

Kochi MC has already acquired 15.4 Ha of land in Brahmapuram Panchayat for constructing a waste treatment and disposal facility. Kochi MC proposes to set-up a compost plant of 300 MT capacity at Brahmapuram and discussions indicate that the technology developed by M/s Karnataka Compost Development Corporation (KCDC) is being considered. The compost plant and the landfill are proposed on either a Build-Operate-Transfer or on a turnkey basis. The decision is pending with the Corporation Council. The Corporation is also considering acquisition of an additional 20 Ha. land in the surrounding area. This is a separate project taken up by the MC and an amount of Rs 4.40 crores have been earmarked under the plan funds. The area required for the new compost plant including sanitary landfill up to 2021 will be 15.19 Ha.

Bio-Medical Waste. There are 80 government and private clinics, hospitals and nursing homes with 8,437 beds within Kochi Municipal Corporation area that are responsible for treating and disposing of their own waste. Incinerators are present in some of the hospitals and disinfectant waste is normally buried and subsequently covered with clay.

9.4.2 Proposed Solid Waste Management Component Design Assumptions Deficiency analysis was carried out based on the norms/standards prescribed in the ‘Manual on Municipal Solid Waste Management, Ministry of Urban Development and Poverty Alleviation, Government of India, New Delhi, May 2000’ (referred to as “the Manual”). Infrastructure need was identified for: (i) primary collection and storage; (ii) secondary collection and transportation; and (iii) waste treatment and disposal. Additional analytical details are provided in Volume 6 – Technical, Section D. The above works will improve the existing solid waste management system for the city

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FR Volume 2 - City Report - Kochi PAGE 70 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation center and developing areas. Based on city priorities and capacity for implementation within the project timeframe the solid waste management component proposed is summarized in Chapter 10.

Table 9-13 summarizes the solid waste management infrastructure need for Kochi and is based on the following assumptions:

Waste Generation. While the Manual prescribes a waste generation norm of 250 grams per capita per day (gpcd) for cities with a population of 500,000, waste in Kochi is generated at 707 gpcd (this figure needs verification through a detailed waste analysis). For estimations, a waste generation rate of 250 gpcd is assumed (conforming to the Manual recommendations); waste generation is expected to increase at a compounded annual growth rate (CAGR) of 1.41%9. Based on the above-mentioned generation and growth, daily waste generated at the city was determined for 2011, 2021 and 2031; for current analysis, requirement in 2011 is determined.

Street Cleansing. Sanitary workers will be supplied with adequate tools and equipment for street and drain cleaning purposes, in accordance with the Manual. The following pattern is assumed: (i) market areas will be swept at least twice daily and other areas will be swept once daily; (ii) commercial waste will be collected after street sweeping beats; and (iii) drains (less than 60 cm deep) will be cleared at noon. Burning waste in the street is strictly prohibited under the Kerala State Pollution Control Board (KSPCB) regulations and it is assumed that this practice will be discontinued.

Waste Storage. It is recommended to transit into a two-bin system of waste segregation and storage at source – for organic and inorganic waste. However, this transition will be gradual and an awareness program is imperative during the detailed design phase of the project to facilitate this transition. The following storage system is assumed: (i) household waste will be preferably stored in litter bins, which will either be disposed into street side dustbins (100 kg capacity spaced at 500 m and one dustbin for 250 persons) or collected through the door-to-door collection system – it is assumed that households generate 65% of the total waste; (ii) bins of 0.5 cum and 1 cum capacity are recommended for storing trade waste or hotel waste – it is assumed that commercial establishments, marriage/function halls and markets generate the balance 35% of the total waste; (iii) hazardous and/or hospital waste will be stored in special containers at one container for every 10,000 persons; and (iv) construction debris should be stored within the premises. Storage receptacle capacity is assumed as 1.25 times the waste being generated.

Primary Collection. Primary waste collection from households is proposed through auto tippers. The current system of waste collection practiced by Kudumbashree is recommended. It is assumed that the auto pickups will collect all domestic waste and dump the waste into 3 m3 dumper placer bins – this collection is either door-to-door and/or from street side dustbins. Wheelbarrows or pushcarts will also be used for primary waste collection.

9 The consumption of raw materials and finished product by the community is directly proportional to the Gross National Product (GNP) of the country. Solid waste quantities are directly proportional to the quantity of material consumed and thus the increase in per capita solid waste quantities would be directly proportional to the per capita increase in GNP. Based on a World Bank study on the relation between GNP and per capita waste generation, waste generation is expected to grow at a compounded rate of 1.41% per annum.

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Secondary Collection. Secondary waste collection is proposed through dumper placer vehicles and refuse collectors/compactors; 100% waste transfer is recommended with all waste from receptacles transferred to the treatment/disposal site. Dumper placer vehicles will collect and transfer waste from the 3 m3 dumper placers to the compost/landfill site at Brahmapuram. Refuse collectors/compactors would collect and transfer waste from the 0.5 m3 and 1 m3 bins to the compost/landfill site. Existing trucks will collect waste from peripheral areas. A “routing plan” will be developed by the design consultant post-PPTA. It is also assumed that a maximum of 50% of current vehicles will be operational in 2011.

Fleet Size. Trip patterns and quantum determine the vehicle units, the following is recommended: (i) auto pickups will make short trips from source to 3 m3 bin points making five trips daily and carrying a maximum of 500 kg per trip (equivalent to 2.5 MT/vehicle/day); (ii) twin dumper placers will undertake three trips daily and carry 3 MT of waste per trip translating into 9 MT/vehicle/day; and (iii) refuse collectors/compactors will undertake three trips daily and carry 8 MT of waste per trip translating into 24 MT/vehicle/day.

Waste Treatment/Disposal. Waste treatment shall comprise composting and landfill. The following waste composition is assumed for the treatment/disposal process: (i) 40% of the waste is organic in nature; (ii) 60% of the waste is inorganic in nature; and (iii) 30% of the waste treated (composted) is a reject. The inorganic waste and compost rejects will be used in the landfill; a tipper truck of 8 MT capacity will transfer compost rejects to the landfill area. The area of the site is sufficient to cover landfilling at estimated amounts till the year 2021.

Additional analytical details are provided in Volume 6 – Technical Analysis, Section D. The above works will improve the existing solid waste management system for the city center and developing areas. Based on city priorities and capacity for implementation within the project timeframe the solid waste management component proposed is summarized in Chapter 10.

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Table 9-13: Preliminary Requirement for Integrated SWM System

Item Unit 2004 2011 2021 2031 Gap 2011 1 Population nos 606,000 630,114 659,351 683,351 24,114 2 Daily Waste Generation MT 152 174 209 249 22 3 Daily Per Capita Waste Generation gram s 250 276 317 365 26 4 Street Length km 1,665 1,724 1,812 1,905 59 5 Sanitary Workers nos 101 3,448 3,625 3,810 3,347 6 Waste Storage, Collection and Transportation Primary Collection and Storage Pushcarts / Wheelbarrows nos 46 56 66 46 Dustbins (~ 100 kg) nos 2,520 2,637 2,733 2,520 Drain Desilting carts nos 35 42 50 35 Secondary Collection and Transportation Utilization Factor for Receptacles & Vehicles 1.25 1.25 1.25 Design Mass for Receptacles MT 217 261 312 217 Design Volume for Receptacles cum 434 523 623 434 Waste Containers (0.5 cum) nos 130 157 187 130 Waste Containers (1 cum) nos 87 105 125 87 Dumper Placer (3 cum) nos 25 94 113 135 69 Auto Pickups for Direct Collection nos 48 58 69 48 Twin Dumper Placer Vehicles nos 2 16 19 23 14 Refuse Collectors / Compactors nos 15 3 4 5 (12) 7 Waste Treatment and Disposal Tipping Trucks nos - 1 2 2 1 Compost Plant MT - 69 84 100 69 Sanitary Landfill MT - 125 151 180 125 Sanitary landfill Area requirement Ha. 0.383 0.438 0.526 Total landfill area requirement for 2004, 2011 & 2021 Ha. 0.383 2.84 8.11 Area of the identified site* Ha. 15.4 * Sufficient upto 2021.

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9.5 Roads and Transportation 9.5.1 Overview Roads and urban transport proposals under the Kerala Sustainable Urban Development Project (KSUDP) are based on a Conceptual Road Network Plan (CRNP) prepared for each Project city. The CRNP was developed based on previous comprehensive traffic and transport schemes (CTTS) prepared for each Project city. The CRNP also drew from inputs based on discussions with officials from concerned municipal corporations (MCs), Development Authority, Town Planning Department, Public Works Department and the Transportation Advisor to Government of Kerala (GoK), Prof. Dr. NS Srinivasan. The CRNP also takes into consideration the existing network, directions of likely development, Master Plan/Traffic Study proposals, stakeholder’s suggestions, etc. Details on the CRNP are provided in Volume 6 – Technical Analysis, Section E.

The Urban Policy and Action Plan-2002 formulated by the Government of Kerala (GoK) aims at providing basic services and economic growth in urban areas and address the transport and road safety issues. The role of urban transport planning is to integrate other city infrastructure sub-sectors for achieving the desired development vision and economic growth targets.

The urban transport sub-sector review includes: (i) a detailed assessment of the existing system; (ii) review of prevalent operational practices; (iii) identification of critical issues; (iv) review of on-going development initiatives, including the role of private sector participation; (v) need for additional infrastructure strengthening to address the identified critical issues effectively; and (vi) identification of financial implications. The analysis and recommendations made are based on the review of available secondary data and proposals, site visits, field surveys (to the level required to update available data and undertake the need assessment and analysis) and discussions with the stakeholders including the officials of the municipal corporation, Greater Cochin, Development Authority (GCDA), Roads and Bridges Development Corporation (RBDCKL), Public Works Department (PWD) and Kerala Road Fund Board (KRFB).

Areas Covered. The areas covered under urban transportation include: a) Road network system comprising of road availability, traffic and travel characteristics (radial roads, by-passable traffic, central city area, junctions, parking and pedestrian facilities) and road safety; b) Street lighting; and c) Public transport system.

Project Identification. The criteria adopted for identification of sub-projects are as follows: a) Need analysis based on demand assessment and supply gap; b) Urban strategy and existing Development Plans; c) Environmental and social impact; d) Financial viability and project sustainability; e) Compatibility with committed projects;

FR Volume 2 - City Report - Kochi PAGE 74 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation f) Project implementation strategy; g) Exclusion of committed projects under different schemes; h) Capacity augmentation to major radial roads in the outer city area and major arterial / sub-arterial roads in the intermediate city area so as to activate the desired dispersal of activities. The road network concept of ‘ring and radial’ pattern developed in the Master Plan is taken as the guiding factor. The capacity augmentation shall include:

Missing links in the identified ring roads of different categories in city road network;

Important links providing vital connectivity between the ring roads; and

All major radial roads up to the corporation limit. i) Access to major activity centers like tourist destinations, transport terminals, solid waste dumping/processing yard, inter-modal integration and industrial/medical/educational centers; j) Existing traffic demand corridors with high volume–capacity ratio; k) Segregation of through traffic from central city by providing appropriate link roads or by-passes; l) Road safety aspects covering pedestrian facilities, junction improvements, parking aspects, road signage, lane marking, etc.; and m) Design and selection criteria prescribed by the Indian Roads Congress (IRC).

Guidelines for Sub-project Selection. Apart from the discussions with stakeholders, schemes proposed in various reports and documents were considered for sub-project identification. The documents reviewed comprise: a) Structure Plan for Central City Cochin -2001, Greater Cochin Development Authority; b) Baseline Traffic and Transport Study for Cochin, 1991, Kerala Urban Development Project; and c) Comprehensive Study for Transport System for Greater Cochin Area -Final Report, (2001), Transport Department, Government of Kerala.

Traffic Surveys. In order to understand the existing traffic characteristics, update the available past data and facilitate sub-project preparation, primary traffic surveys were carried out to the limited level required. They include: a) Link volume at eight locations; b) Turning volume count at three junctions; c) Rail-level crossing survey at two locations; and d) Speed and delay survey on selected major road sections.

Detailed road inventory survey were carried out on selected eight major corridors totaling 37 km, so as to understand the available road space and its usage, pedestrian facilities, street lighting, drainage, parking locations, bus stops, etc. Traffic survey locations were selected by eliminating locations for committed projects. Details of survey analysis results are summed up in the Supplementary Report (Roads and Urban Transportation).

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9.5.2 Existing Roads Kochi city has a road network of 1,665 kms of which nearly 73% is surfaced. With a road density of 27 km per sq. km area, Municipal Corporation (MC) has nearly 9% of the urban land area under transport and communication use. In the GCDA area, the transport use of urban land is 6% as indicated in Structure Plan for Central City Cochin (2001)10.

Table 9-14: Road Network in Kochi City

Road Category Length (Km) % Share Black Top Road 1,041.10 62.53 Metal Road 150.60 9.05 Concrete Road 178.70 10.73 Others 294.50 17.69 Total 1,664.90 100.00 Source: Directorate of Urban Affairs, Govt. of Kerala.

Of the road network, a length of 499 km constitutes major roads and is classified in Table 9-15 below.

Table 9-15: Classification of Major Roads in Kochi

Road Classification Length (Km) Distribution (%) Single lane 39.3 7.9 Intermediate lane 92.5 18.5 Two lane 260.7 52.3 Three lane 33.9 6.8 Four lane 69.7 14.0 Six lane or more 2.8 0.5 Total 498.9 100.0 Source: Comprehensive Study for Transport System for Greater Cochin Area-Final Report, 2001, Transport Department, GoK.

According to the Comprehensive study for Transport System for Greater Cochin Area (2001) assessment, only 15% the major roads have a divided carriageway. 21% have right of way (ROW) less than 10 m, 57% have ROW between 10 to 20 m, 16% have ROW between 20 to 30 m and 6% have ROW more than 30 m. About 6% roads were observed to have footpath on either side. In the remaining network, covered drain of 0.6 meter is available as footpath, which is not continuous and only partially usable. Out of total road network, 84% of the road length has streetlights. Of this, 72% of the road network is provided with sodium vapor lamps, while the remaining 28% is provided with fluorescent lamps. Generally, the road surface was found to be poor with cracks, rutting and potholes.

10 Structure Plan for Central City Cochin - 2001, Greater Cochin Development Authority.

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Table 9-16: Distribution of Road Network as per Right of Way (ROW)

Sl. Right of Way (ROW) (m) Length (Km) Percentage No. 1 <10 107.2 21.49 2 10 to 20 283.7 56.87 3 20 to 30 78.1 15.65 4 30 to 40 11.6 2.33 5 >40 18.3 3.67 Total 498.9 100.00 Source: Comprehensive Study for Transport System for Greater Cochin Area – Final Report, 2001, Transport Department, GoK.

Major Issues. Problem of congestion on main roads and intersections is a result of a combination of factors. Most of the arterial roads have substandard road geometric and carry significant amount of intercity traffic in addition to the local traffic. Inadequate parking facilities and inefficient management of road space are the other factors contributing to the traffic congestion. Absence of pedestrian facilities in most of the road sections is another major concern. Poor geometric for the roads connecting important activity centers like tourist destinations (Fort Kochi, Chottanikara, Vega Land), industrial centers (Eloor, Ambalamugal) and institutional area at Thirukkakara and for few major radial road sections like Thoppampady - Edakochi section, Marine Drive – Pachalam - Cheranallur section. MG Road, Thevara road and Pullapally-Thammanam road are the other major critical roads. Absence of adequate east – west axis roads put maximum traffic pressure on Banerjee Road, MG Road-Edapally section and SA Road.

Most of the arterial and sub-arterial roads are under Public Works Department (Roads and Buildings Division) and Public Works Department (National Highways Division) and collector roads under MC. In Kochi, MC also has many major roads. Each is responsible for their own road development and maintenance. Inadequate maintenance by these agencies due to various reasons has resulted in poor riding quality for most of the city roads. All these problems together have resulted in speed reduction during the peak-hours in city roads in general. As per RITES (2000) Study, 83% of the major roads were observed with a peak-hour journey speed of less than 35 km per hour. The average peak-hour speed at selected outer city road sections is in the range of 15 to 38 km per hour during the year 2004 (Table 9-17).

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Table 9-17: Speed and Delay Characteristics at Selected Links

Peak Hour Off-peak Hour Sl Length Name of the Road Journey Delay Running Journey Delay Running No (Km) Speed (Sec) Speed Speed (Sec) Speed (Km/hr) (Km/hr) (Km/hr) (Km/hr) 1 Edakochi Road 9.00 23.09 83 24.55 32.69 56 34.65 2 Thripunithura road (a) Pettah-SN junction - Anchuvillakku road 2.60 32.39 38 37.29 37.59 23 41.42 (b) Pettah-Vytilla road 2.70 37.67 25 41.72 40.84 15 43.59 3 Pullepadi-Thammanam road 3.00 15.79 336 31.03 24.94 15 25.84 4 Vaikom road Anchuvillakku-Police station road 0.40 26.67 11 33.49 32 8 38.92 5 Beach road (a) towards Dutch cemetery 3.20 22.11 60 24.99 27.56 44 30.80 (b) towards Dutch Alappuzha 5.00 23.78 48 25.39 30.35 35 32.26 6 Karshaka road 0.70 35.00 14 43.45 44.21 7 50.40 7 Cochin Madurai NH (Upto Thripunithura junction) 3.10 35.32 36 39.86 44.29 17 47.49 8 Shanmugham road 2.50 22.78 30 24.66 25.57 18 26.95 9 MG road 3.40 14.78 296 23.01 20.71 96 24.73 10 Mathai Manjooran road 1.00 26.28 27 32.73 34.29 13 39.13 11 Palarivattam - St.Martin church link road 0.40 30.64 15 45.00 40.00 5 46.45 Source: Primary Survey under ADB PPTA 2004

Based on surveys, the average annual traffic growth rate on comparable sections of city roads during the period 1991-2004 is 6.2%. This growth rate is indicative being based only on a few road sections.

Table 9-18: Traffic Growth Rate during 1991-2004

Peak-hour traffic (No. of Sl. AACGR ( %) Road Section Vehicles) No. 1991 2000 2004 1991- 2000 2000- 2004 1991-2004 1 Vaduthala Gate 241 NA 551 - - 6.57 2 MG Road (Near Dwaraka) 1,964 3,830 NA 7.70 - - 3 Chittoor Road near Valanjambalam 1,191 779 NA -4.60 - - 4 Shanmugam Road near Menaka 1,569 2,922 2,908 7.15 -0.12 4.86 5 Edacochi Road 359 1,061 1,789 12.81 13.95 13.16 6 Thammanam-Pullapady Road 494 NA 1,345 8.02 7 PT Jacob Road 905 1,902 NA 8.61 8 Beach Road 262 275 481 0.55 15.00 4.79 9 Trippunithura Road 1,296 1,797 2,167 3.70 4.79 4.03 Total 5.83 4.95 6.22 Source: 1) Baseline Traffic and Transport Study – Cochin, 1991, Kerala Urban Development Project; 2) Comprehensive Study for Transport System for Greater Cochin Area – Final Report, (2001), Transport Department, Government of Kerala and 3) Primary Survey (2004) under ADB-PPTA, 2004.

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Prospects Including Committed Projects. Different agencies are involved in planning, construction, and maintenance of the urban road network in Kochi planning region and they include MC, PWD, GCDA, RBDCKL, Cochin Port Trust (CPT), Goshree Island Development Authority (GIDA) and Kerala Industrial Infrastructure Ltd (KINFRA). In the recent past, a major thrust has been given to road improvement program for Kochi City. The details of committed/completed road projects by these agencies in Kochi is presented in Table 9-19 and presented in Figure 9-3.

Table 9-19: Details of Committed Transportation Projects – Kochi

Sl. Road Section Implementing Remarks No. Agency 1 SA Road 90% LA completed through land MC surrender method. Target to complete by March 2005. 2 Pullepady-Thammanam Road (with ROB) i) Pullepady-Thammanam Road (with ROB) MC, GCDA & LA completed & ROB started. ii) Thammanam-NH Bypass RBDCL LA to start. 3 Stadium Link Road connecting Thammanam- LA and road formation in progress MC Pullapady Road 4 Panampally Nagar (IOC) to Thevara at Atlantis Partially done. MC & RBDCL Section 5 Road from Goshree Bridge to Mamangalam on Road formation upto Pachalam, along the GIDA Old NH47 through Pachalam and Pottakuzhi. backwater is in progress. 6 Bund Road from Panampally Nagar to Work in progress. GCDA Thykoodam as a parellel to SA Road. 7 Extension of Pullepady-Thammanam Road from Alignment investigation completed by PWD (Roads) NH Bypass to Seaport - Airport Road LBS. LA estimate is Rs 110 million. 8 Extension from Seaport - Airport Road to KINFRA LA in progress KINFRA Park 9 Proposal to construct a Bus Terminal at a Feasibility study in progress. Identified suitable place in the outer city under BOT MC locations include Vennala on Seaport - Scheme. Airport Road or Vyttila 10 Model Road project (Widening of Shanmugham Corporation has handed over 10 m. width Road from High Court Jn. Upto Fine Arts Hall and Dept. of of land. Phase I from High Court Jn. To construction of bridges at Padiyartham Canal Tourism / PWD Guest House work in progress including crossing and Market Canal) the bridge. i) High Court - Guest House Section (Phase I) PWD (Roads) Bridge under construction. Road project & Tourism tendered. ii) Guest House - Fine Arts Hall Section (Phase II) Dept. Not started. 11 Airport - Seaport Road i) NH 49 Thirupunithura-Kalamassery (Phase I) RBDCKL Completed (Rs 300 million project cost) ii) Kalamasery-Periyad near Angamaly on NH47 In progress RBDCL (Phase II) 12 Construction of footpaths i) Jose Jn. To South Railway Station Completed Tourism Dept. ii) Town Hall To North Railway Station Completed 13 Rail Over Bridge (ROB) i) Pullepady-Thammanam Road level crossing RBDCKL & Started Railways ii) Ponnurani level crossing at Vyttila-Palarivattom RBDCKL & Completed Road Railways iii) Pachalam level crossing on Chittoor Road RBDCKL & LA to start. Railways

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Sl. Road Section Implementing Remarks No. Agency iv) Vaduthala level crossing on Chittoor Road RBDCKL & LA to start. Railways v) Atlantis level crossing near Cochin Shipyard RBDCKL & LA to start. Railways vi) South Kalamassery level crossing RBDCKL & In progress Railways vii) NH17 Crossing at Edapally RBDCKL & LA to start. Railways 14 Extension of S.C. Bose Road to Palarivattom/ In progress MC Vytilla Road (Convent road) 15 Kalloor - Kadavanthara Road with ROB at In the final stage of completion. GCDA Kathirikadavu 16 Four laning of Vyttila-Aroor section of NH Bypass PWD (NH) In progress 17 Construction of Goshree Bridges connecting Completed GIDA Marine Drive and Vypeen

9.5.3 Urban Travel Demand and Traffic Characteristics Link Volume. The estimated average annual daily traffic (AADT) on some of the main roads indicate that traffic was in the range of 50,000 to 60,000 passenger car units (PCU11) on inner city road sections, 10,000 to 20,000 PCU on intermediate city road sections and in the range of 8,000 to 22,000 PCU on roads in the city’s periphery, during the year 2004. This high traffic volume exerts more pressure on the existing narrow urban roads, causing frequent congestion and accidents.

Table 9-20: Peak Hour Traffic Distribution at Selected Locations

Sl. Road Section AADT of 16 Peak Hour Peak Hour Estimated Estimated No. Hours Traffic (PCU)- Factor (%)- AADTof 16 Peak Hour (PCU)-2000* 2000* 2000 Hours (PCU)- Traffic (PCU) - 2004 2004 1 Outer City Sections 1.1 Edakochi-Palluruthy section 17,176 1,543 8.98% 21,684 1,948 1.2 Beach Road near Football Ground 5,013 1,013 20.21% 6,329 1,279 1.3 Old Railway Station Road 6,581 701 10.65% 8,308 885 2 Intermediate City Sections 2.1 Thevara Road 14,829 1,296 8.74% 18,721 1,636 2.2 Indira Gandhi Road at Welligton Island 9,853 975 9.90% 12,439 1,231 2.3 P T Jacob Road 16,282 1,858 11.41% 20,556 2,346 2.4 Pottakuzhy Road 7,591 887 11.68% 9,583 1,120 3 Inner City Sections 3.1 MG Road near Dwaraka 47,612 3,973 8.34% 60,109 5,016 3.2 Shanmugam Road near Menaka 42,593 3,682 8.64% 53,773 4,648 3.3 MG Road near Padma 39,121 3,628 9.27% 49,389 4,580 Note: Estimated with 6% annual growth rate. * - Comprehensive Study for Transport System for Greater Cochin Area – Final Report, (2001), Transport Department, Gok.

11 In order to assess traffic flows and patterns, a common unit called the passenger car unit (PCU) is followed in India. The PCU is a unit, which represents equivalent space occupied by a particular vehicle type in the traffic stream, corresponding to its average speed. The car is considered a representative vehicle and its PCU is assumed as unity. The PCU is used to determine the traffic intensity of different roads with different composition of vehicle types; the traffic capacity of different road types; and the utilization level of a particular road to define congestion levels. Further details are provided in Volume 6 – Technical.

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Primary survey carried out at selected road sections in outer city area in August 2004 indicated that many roads have reached their maximum capacity. Most of these sections are projected to have volume-capacity ratio with more than three in the year 2014, as given below, and need widening.

Table 9-21: Peak-hour Traffic Volume on Selected Road Stretches - 2004

Sl. Link Name Peak-hour Peak-hour Capacity Volume- Projected Projected No. traffic in PCU* capacity Volume- Volume- volume ratio12 capacity capacity (PCU)* (2004) ratio (2009) ratio (2014) 1 Beach Road (Jacob road- 9.00 – 10.00 AM 761 800 0.95 1.27 1.70 Chellanam Section) 2 Pullepadi-Thammanam Road 4.00 – 5.00PM 1,464 800 1.83 2.45 3.28 3 Thripunithura Road (Vytila- 6.00 – 7.00PM 3,258 2,143 1.52 2.03 2.72 Petta Section) 4 Shanmugham Road 11.30 – 12.30PM 5,479 2,143 2.56 3.42 4.58 5 MG Road (Shenoys-Padma 4.15 – 5.15PM 4,318 5,143 0.84 1.12 1.50 Section) 6 Edakochi Road (Thopumpady- 5.15 - 6.15 PM 2,883 1,714 1.68 2.25 3.01 Pallathuruthi Section) 7 Chittoor Road (MG Road- 5.15 - 6.15 PM 1,859 800 2.32 3.11 4.16 Pachalam Section) 8 Chittoor Road (Pachalam- 3.30 – 4.30PM 674 800 0.84 1.13 1.51 Vaduthala Section) * - PCU conversion and capacity calculations are as per IRC:106-1990 (Guidelines for capacity of Urban Roads in Plain areas) Source: Primary survey under ADB PPTA (2004).

Radial Roads. Of the existing radial roads, five roads are on major corridors with high inter-city vehicular traffic entering / leaving the city and they include: a) NH 47 towards Alappuzha; d) NH 49 towards Madurai; and b) NH 47 towards Thrissur; e) Kottayam Road. c) NH 17 towards Parur;

Through Traffic. 26% of passenger trips and 31% of goods trips were estimated to be through traffic during the year 2000 and they need bypass13. Existing NH 47 Bypass has become an urban road with concentrated commercial activities. Hence, capacity augmentation to the existing bypass as well construction of a next level bypass will help to reduce the traffic problems in the city.

Junctions. Road widths in the inner and intermediate city areas are generally narrow and experience heavy traffic flow. This results in frequent traffic congestion and problem for turning traffic at junctions. Of the 40 major junctions where turning traffic data is available for the year 2001, six junctions (Madhav Pharmacy Junction, High Court junction, Bypass junction, Pallimukku junction, Hospital Road junction and Vytilla junction) were with the high peak hour traffic volume,

12 The Volume/Capacity (V/C) Ratio indicates the congestion levels on a particular road. The Indian Road Congress (IRC) specifies a design service volume (DSV) for each road type therefore indicating a level of service. The utilization of a particular road is then derived using the V/C Ratio where ‘V’ indicates the observed traffic volume on the identified road type and ‘C’ indicating the DSV or the Maximum Volume on the identified road type. Further details are available in Volume 6 – Technical. 13Comprehensive Study for Transport System for Greater Cochin Area – Final Report (2001), Transport Department, Government of Kerala.

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Table 9-22: Peak-Hour Turning Traffic at Selected Junctions

Sl. Junction Name Peak-hour Peak-hour traffic volume No. No. of vehicles PCU* 1 Pallimukku Junction 4.30 – 5.30 PM 8,071 10,419 2 Kacheripadi Junction 3.30 – 4.30 PM 6,062 9,022 3 NH bypass Junction 4.15 – 5.15 PM 6,288 10,436 * - PCU conversion is as per IRC:106-1990 (Guidelines for capacity of Urban Roads in Plain areas)

Source: Primary survey under ADB PPTA, (2004).

Parking. On-street parking is a major issue due to the absence of off-street parking facilities. Heavy parking demands on the major corridors reduce the usage of carriageway, causing congestion and blocking connecting roads. Major parking demand corridors in the city are at MG road, Shanmugham road, Kadavanthara-Pallimukku section of SA Road, Market Road, Durbar Hall Road, South Junction Road and Banerjee Road. The concentrated commercial and institutional activities along these roads generate heavy on-street parking demand on these sections and their connector roads, causing frequent traffic congestion. Recently, private landowners along the major road corridors have started using their vacant plots as off-street parking facility with user fee. This indicates both the heavy parking demand as well the acceptance of user fee for off-street parking along the demand corridors.

Table 9-23: Peak On-Street Parking Accumulation

Sl Location Car Auto Two LCV Parking No Wheeler Accumulation (E.C.S) Ravipuram to Madhav Pharmacy 156 66 142 0 285 1 M.G. Road Madhav Pharmacy to Ravipuram 215 71 210 0 339 Kaloor to High court 44 24 45 0 79 2 Banerjee Road High court to Kaloor 60 29 60 0 104 Kaloor to Jawahar Stadium 36 10 47 0 58 3 Edappally Road Jawahar Stadium to Kaloor 38 12 45 0 61 Banerjee Road to Paiso 15 4 6 2 26 4 Broadway Road Paiso to Banerjee Road to 54 17 35 4 90 Shanmugham High Court to Hospital 95 20 83 0 136 5 Road Hospital to High Court 49 10 60 0 74 Market to Hospital 48 21 39 7 96 6 Market Road Hospital to Market 34 15 27 5 68 Pallimukku to Jamatha 33 18 39 0 61 7 S.A. Road Jamatha to Pallimukku to 42 33 48 0 87

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Sl Location Car Auto Two LCV Parking No Wheeler Accumulation (E.C.S) South Junction South junction to Jos junction 23 27 20 0 55 8 Road Jos junction to South junction 2 4 13 0 9 Jos junction to B T H 9 D.H. Road 32 12 7 0 46 B T H to Jos junction 11 7 10 0 21 Source: 'Final Report on Comprehensive Study for Transport System for Greater Cochin Area, April 2001 submitted to Department of Transport, Govt. of Kerala.

Pedestrian Facilities. Apart from all the major road corridors in the inner and intermediate city area, locations with commercial, hospital and educational activities were found with heavy pedestrian traffic for parallel and crossing movement. Outer city road sections also found with considerable pedestrian traffic, particularly during the peak hours, as given in Table 9-24. The critical sections with heavy pedestrian traffic in the central city area include M G Road between Dwaraka to Woodland junction, Thopumpady, BTH to Main Jetty, Menaka to High Court, Old NH from Kacheripady to Town Hall, Edapally road (Kaloor-North Over Bridge) and Chittoor road between South Jn and Valanjambalam. Peak hour pedestrian traffic at these locations was found to be 13,000 to 35,000 persons per day in 200014. But except few sections, most of the roads do not have footpath facilities. This underlines the need for improving pedestrian facilities in the urban traffic system.

Table 9-24: Mid-Block Pedestrian Count at Selected Locations

Sl Section Name Peak Hour Pedestrian Volume (No) No 1 Beach Road 04.15 PM - 05.15 PM 426 2 Thripunithura Road 08.00 AM - 09.00 AM 786 3 Pullepadi - Thammanam Road 08.00 AM - 09.00 AM 246 4 Shanmugham Road 12.00 PM - 01.00 PM 1,276 5 Edakochi Road 06.00 PM - 07.00 PM 478 6 MG Road 05.15 PM - 06.15 PM 2,310 Source: Primary Survey under ADB PPTA, 2004.

9.5.4 Road Safety In 2003, Ernakulam district has 446,959 registered motor vehicles, of which majority of them are in the city region. This suggests that on an average, there are 141 motor vehicles for every 1,000 persons and 151 vehicles per sq. km area. This is significantly higher than the state average of 78 motor vehicles per 1,000 persons and 65 vehicles per sq. km area. During the period 1991-2003, the average growth of vehicle population in Ernakulam District was found to be 13% and the same is with declining trend during 2001-03 (10%)15. Growth of motor vehicles and its pressure on the road network is significant, resulting in over utilization of road network in the region with frequent traffic related problems like congestion and accidents. Available statistics indicates that road accidents is a major concern in Ernakulam District with about 4% average annual growth rate during 2001-03.

14 'Final Report on Comprehensive Study for Transport System for Greater Cochin Area, April 2001 Department of Transport, GoK. 15 Compiled from Economic Review 2002 and 2003, State Planning Board, Govt. of Kerala.

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Table 9-25: Details of Road Accidents - Ernakulam District

Sl. Year No. of Annual No. of Persons Annual No. of Persons Annual Growth No. Accidents Growth (%) Injured Growth (%) Killed (%) 1 2000-01 6,895 7,718 353 2 2001-02 7,349 6.58 8,258 7.00 347 -1.70 3 2002-03 7,048 -4.10 7,915 -4.15 405 16.71 AACGR (%) 1 2001-03 3.40% 0.50% 2.55% Source: Economic Review 2002 and 2003, State Planning Board, Govt. of Kerala.

Out of the 7,048 accidents reported in Ernakulam District during the year 2002, 42% of the accidents (2,958 accidents) were from Kochi City alone. Two wheelers, car and auto-rickshaw were found to be the major vehicle categories involved in accident.

9.5.5 Existing Street Lighting In general, urban roads are provided with street lights of different categories. As per the RITES Study (2001), about 84% of major roads in the city were provided with adequate streetlights. Kochi MC is maintaining the street lights, through Kerala State Electricity Board (KSEB). Road inventory survey conducted by the PPTA at selected major roads, mostly in the outer-city area, revealed that the roads are adequately lit with tubes (15%) and MVL (84%). Average distance between lamp posts on major roads found to be about 44 m. About 2% of street lights at the selected road sections were found not working due to delay in maintenance.

Table 9-26 Details of Street Lights Availability at Selected Road Sections

Sl. Road Section Length No. of lights Avg. space No. of lights not No. (km) between working on the street survey day Bulbs Tubes MVL SVL Total lights (m) No. % 1 MG Road Perumanoor to Madhav 3.30 0 0 106 0 106 31.13 7 6.60 Pharmacy 2 Beach Road 8.13 0 13 203 0 216 37.66 10 4.63 3 Vaikom Road - Anjuvilakku junction to Police Station Junction 0.40 0 3 6 0 9 44.44 0 0.00 4 Karshaka Road 0.60 0 0 11 0 11 54.55 0 0.00 5 Edakochi road 9.00 0 16 181 0 197 45.69 0 0.00 6 Thripunithura Road 5.24 0 11 61 0 72 72.71 1 1.39 7 Cochin - Madhurai NH upto 3.02 0 44 25 0 69 43.77 0 0.00 Thripunithura 8 Pullepady - Thammanam road 3.00 0 32 16 0 48 62.50 0 0.00 9 Palarivattam - St. Martin church 0.30 0 0 9 0 9 33.33 0 0.00 link road 10 Mathai Manjooran road 1.00 7 8 0 0 15 66.67 0 0.00 11 Shanmugham road 2.50 0 0 79 0 79 31.65 00.00 Total 36.49 7 127 697 0 831 43.91 18 2.17 Source: Primary Survey under ADB PPTA, 2004.

Problems and Prospects. Few intersections and some of the major road corridors including the NH Bypass portion are insufficiently lit. The existing maintenance system by Corporation needs improvement as 2% of streetlights do not function or get delayed in maintenance attention.

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9.5.6 Existing Access to Public Transport a) Rail Transport. Five rail stations serve Kochi and the rail line divides the city into two parts by passing through the heart of the city. The older part of the city is towards the west of the rail line while all new developments are taking place in the eastern part of the city. Four ROBs provide uninterrupted access between the two parts of the city. Remaining level crossings at major road corridors affect the road traffic due to their frequent gate closures. Heavy traffic at Pullapady, Wellington Island, Pachalam, Vaduthala, Edappally, Ponnurani and Atlantis level crossings are subjected to considerable delay (about 5 to 6 minutes) during the peak hours. It is estimated that the traffic at Pachalam crossing has reached 0.5 million train vehicle units (TVU) and 0.2 million TVU at Vaduthala crossing during the year 200416. This justifies the requirement of ROBs at the aforesaid locations. b) Bus Transport. Private bus operators mainly operate city bus service. About 650 private buses operate in the city in 160 routes and mostly terminate to outside city destinations. The terminals with a large number of buses originating and terminating include Aluva, Fort Kochi, Edakochi, Cheranallur, Mattancherry, Perumpadappu, Chottanikara, Vyttila and Kakanadu. As the city bus system is operated through private operators, there is no adequate facility for parking of buses or bus terminal at present in an organized manner. Inter-city buses and inter-state buses are operated by KSRTC. c) Mass Rapid Transport System (MRTS). A detailed study carried out by RITES (2001) had identified a 30 km stretch from Aluva to Thiruppunithura, through NH47, MG Road, SA Road and Thirupunuthura, as a viable MRTS corridor for Kochi city. The project is estimated to cost Rs.20,970 million at 1999 prices. It is understood that no decision is taken so far on this study recommendations. d) Air Transport. Kochi has an international airport at Nedumbasery, about 25 km away. During the year 2001-2002, 11,478 flights were operated from this airport of which 38% were international flights. Little more than 0.8 million-air passengers boarded or alighted at this airport and this was 7% more to the previous year traffic17. This increasing air traffic put more pressure on the city road network from/to airport for mode change. e) Water Transport. Kochi has a good inland water network around the city. NW 3 passes through the city. State Water Transport Department (SWTD), Kerala Shipping, Inland Navigation Corporation (KSINC) and private operators are providing passenger and cargo boat services to the adjoining islands and industrial centers. Development of road network in and around Kochi has connected many islands and this has reduced the importance of IWT for passenger movement. But it has more tourism potential and being promoted by numerous tourism related schemes. f) Intermediate Public Transport (IPT). Auto rickshaw and taxi car are the popular IPT modes. Vans/Mini Buses are found operating in the radial roads to outer city destinations.

16 Primary Survey under ADB – PPTA: 4106. 17 Economic Review, 2002, State Planning Board, Govt. of Kerala

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Public Transport Share. Public transport trips in the city are carried out through intra-city and intercity bus services, institutional buses and rail. 1991 CES Study has estimated that the composition of public transport vehicles on major roads was 68 percentage, private vehicle 18% and IPT 14%. Major issues identified include: (i) bus stops with unscientific design and locations; (ii) inadequate terminals; (iii) absence of terminals for private buses; (iv) roadside parking of private/KSRTC buses at trip origin/destination; (v) inadequate coverage of public transport services due to poor/narrow roads resulting in more concentration on major corridors only; and (vi) inadequate service during the early and late hours.

9.5.7 Roads and Transportation Scheme Selection From the CRNP, a long list of priority schemes was identified. The long list was then screened to select schemes that could satisfy the Project objectives and comply with ADB funding requirements and guidelines. During the screening process, committed road network improvement projects by various agencies were reviewed, incorporated in the CRNP and excluded from the proposals undertaken by KSUDP. The proposals finalized for KSUDP were screened based on (i) total transport improvement of the city; and (ii) minimal/negligible environmental and social impacts. Apart from the network justification, traffic-based need analysis was carried out for the identified proposals. Results of the need analysis, taking into consideration the projected volume-capacity ratio and required lanes for the years 2009 and 2014 for all five cities, are presented in Volume 6 – Technical Analysis, Section E; the figures justify the need for carrying out improvements to the identified road sections. The road and urban transport proposals identified under KSUDP will therefore form a part of the total city network requirement, for achieving the desired traffic flows and service levels.

Based on city priorities and capacity for implementation within the project timeframe appropriate improvements are proposed with minimum social and environment impact. The proposed sub-project component schemes listed in Table 9-27 are summarized in Chapter 10.

Table 9-27: Details of Urban Transport Proposals – Kochi City

Sl. Road Name Activity / Justification Length No. (Km) A. Road Upgrading 1 Upgrading of Karshaka Road linking eastern side of the South Railway Station To provide better access and circulation to the 1.1 First 150 m. from South Bridge eastern entry of Ernakulam South Station. Also 0.15 1.2 Remaining portion up to Railway station proposed in RITES Study. 0.45

2 Palarivattom Road linking St Martin

Church to Palarivattom Jn - NH Bypass Part of the radial road linking Edapally road, NH Bypass and Vyttila road. Also proposed in RITES 2.1 NH Bypass-Palarivattom Junction 0.50 Study. 2.2 Palarivattom Junction-St. Martyn Church 0.30 Total 1.40 B Improvements to Priority Roads 1 M.G. Road (from Perumanoor to Madhav It is the main commercial road with heavy bus traffic Pharmacy) and needs optimization of road space use, as 4.00 widening is not possible. Also proposed in RITES Study.

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Sl. Road Name Activity / Justification Length No. (Km) 2 Palarivattom - Vyttila Road It is one of the main north-south axis road between 4.00 MG Road and NH Bypass with heavy traffic. 3 Other major roads (MG Road - Edappally Road, SA Road, Chittor Road, all cross roads between MG Road and Chittoor Providing road safety facilities in arterial and sub- road, Toppumpady - Beach road, arterial roads and major roads in the inner city with 35.00 Thoppampady - Mattancherry road, DH concentrated pedestrian traffic. road, Hospital road, Mullassery canal road, TD road and Church landing road) Total 43.00 C New Infrastructure 1 Stadium Link road to connect It is one of the main road on north-south axis Thammanam - Pullapally Road connecting Edappally road and TP Road, through the 1.50 developing area and also provide access to the JN Stadium. It is a Corporation proposal. 2 Twin carriageway bridge over canal on A two lane 30m long canal bridge, at grade, located SA Road on the SA Road which has been widened by Kochi MC to four lanes for the majority of its length. Total 1.50 D. Junction Improvements 1 Pallimukku junction 2 Jose junction 3 Maharaja College junction 4 Padma junction 5 Madhav Pharmacy Junction These are the critical junctions on the arterial roads with heavy turning traffic, cause considerable time 6 Kacheripady loss to the commuters. Improvement to these 7 Judges Avenue (RBI Jn) junctions will help to reduce the junction related problems. Also these junctions were identified for 8 Manorama Intersection improvement in RITES Study. 9 Park Avenue with Hospital Road 10 Kathirikadavu Junction 11 SA Road with Kaloor Kadavanthara Road 12 Kaloor junction

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10. THE PROPOSED SUB-PROJECT

10.1 Project Purpose The purpose of the Project is to improve the urban environment and living conditions, with particular attention to the urban poor, in the five municipal corporations.

The Sub-Project has thus been designed with city components grouped into three broad, mutually interactive and supporting categories, further elaborated in the sections below.

Part A: Urban Infrastructure Improvement;

Part B: Urban Management and Institutional Development; and

Part C: Implementation Assistance.

10.2 Part A: Urban Infrastructure Improvement The process leading to the selection and formulation of the main physical infrastructure project components is described in Volume 1, Chapters 7 and 8 plus the technical analysis presented in Chapter 9 above and Volume 6 – Technical Analysis. A review of priority needs in the project cities against the main project objectives has resulted in a concentration on environmental infrastructure components for improvements in: water supply; sewerage and sanitation; storm water drainage; solid waste management; and, urban roads and transportation. A summary description of the sub-project components is given in the following sections.

10.2.1 Water Supply Component Kochi Municipal Corporation will require supplying treated water of about 137 MLD for a population of approximately 683,000 by 2031 considering an average per capita water supply of 200 lpcd. This is against present rated supply of 125 MLD and the net water availability of 50 MLD due to various losses. The proposed component under KSUDP, contributes in achieving the target through the rehabilitation of water supply transmission and distribution systems to reduce unaccounted for water in order to make available 200 lpcd water to 160,000 persons proposed to be served through the proposed sewerage systems and 148 lpcd for non-sewered population of 523,000 in 2031 and ultimately provide a 24 hour water supply. Source development or supply augmentation is not considered necessary until after 2031.

Total component beneficiaries at EOP (2011) will be 472,600 of which 122,900 are poor.

Sub-Component 1a: Water Transmission Mains

Rehabilitating the existing transmission 900mm and 1,050mm dia. mains for conveying designed quantity of water; and

Installation of suitable flow bifurcation valves and flow meters for controlling and recording the flow through the en-route tapping.

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Sub-Component 1b: Water Supply System Optimization

Distribution network mapping and hydraulic analysis;

Training on improving leak detection, waste control and metering program;

Conducting awareness program among the consumers, with regard to the usage of water, and consumer participation in maintenance of water supply system;

Water and power audit of production, treatment and distribution;

Water management training and capacity building;

Leak detection and rectification; and

Installation of bulk meters in delivery and feeder mains.

Sub-Component 1c: City Distribution Network Strengthening

Distribution network (50 mm GI -80 mm AC-450 mm /600 mm CI) - 200 km;

Replacement of about 60,000 old service connections in the corporation area; and

Installation of 30,000 domestic water meters to house connections and stand post.

10.2.2 Sewerage and Sanitation Component Kochi Municipal Corporation will require collecting and treating 120 MLD of sewage discharged from a population of approximately 710,000 by 2041 contemplating a sewerage system with an average per capita water supply of 200 lpcd. The proposed component under KSUDP, contributes in achieving the target through extension of the sewerage networks in South Ernakulam and North Kochi, extending the existing STP at South Ernakulam for additional 10 MLD capacity, construction of a 20 MLD STP, procurement of sewer cleaning equipments, in order to collect and treat approximately 30 MLD of sewage from 160,000 users in the urban areas of Kochi Municipal Corporation. Besides this, sanitation improvements in non-sewered areas are proposed through on-site sanitation systems and de-sludging of existing septic tanks, benefiting a total population of 413,000.

Based on city priorities, land acquisition for STPs and capacity for implementation within the project timeframe the proposed sewerage component summarized below will be limited to South Ernakulam and North Kochi. Details of the proposed sewerage system are presented in Figure 10-1.

In addition, funds are allocated in Part B – Urban Management and Institutional Development, under the poverty alleviation component, for community infrastructure, such as on-plot sanitation and community sanitation facilities for poor communities.

Total component beneficiaries at EOP (2011) will be 573,300 of which 40,800 are poor.

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Sub-Component 2a: Extension of sewerage in South Ernakulam

90 km. Sewers (250-800mm dia) and 12,000 house connections serving 60,000 population; and

3 No. Sewage Pumping Stations;

Sub-Component 2b: Extension of existing STP at South Ernakulam

Construction of additional 10 MLD STP using FAB technology at existing STP. The STP will also have provision to treat the septic tank sludge of non-sewered areas of Ernakulam. STP site plan is detailed in Figure 10-2.

Sub-Component 2c: Extension of sewerage in North Kochi

110 km. Sewers (250-800mm dia) and 20,000 house connections serving 100,000 population; and

4 No. Sewage Pumping Stations.

Sub-Component 2d: Construction of new STP for North Kochi

Construction of new 20 Mld STP using FAB technology at Mundamveli at MC land. This STP will have provision to treat the septic tank sludge of non-sewered areas of Kochi. STP site plan is detailed in Figure 10-3.

Sub-Component 2e: Facilities for Non-Sewered Areas

One jetting cum suction sewer machine each for South Ernakulam and North Kochi plus seven vacuum (4 in Ernakulam and 3 in Kochi) sludge cleaning machines will be procured for emptying sludge from septic tanks benefiting a total population of 382,500; and

Provision of 4,500 household twin pit pour-flush latrines and 30 community sanitation blocks (included under poverty alleviation component).

10.2.3 Urban Drainage Component Kochi Municipal Corporation will require maintaining 690 km of its drainage system with 540 km of road side open drains. In addition, 95 km of major drainage canals also needs improvements. The proposed component under KSUDP, contributes in mitigating the localized flooding during Monsoons in affected parts of the city through rehabilitation of the existing drains, construction of new drains, providing top covers to 272 km of open drains, provision of bypasses in order to effectively dispose off the storm water in the urban areas. To achieve this, topographical surveys and preparation of 1m contour maps is essentially proposed to prepare a detailed drainage master plan taking into consideration the rainfall intensity and other topographical factors.

Due to considerable encroachment along some of the identified canals requiring improvement, only those schemes that can be implemented immediately without the need for resettlement and rehabilitation (R&R) have been selected for inclusion in the project, as detailed below. Urban drainage proposals are detailed in Figure 10-4.

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Total component beneficiaries at EOP (2011) will be 70,300 of which 5,500 are poor.

Sub-Component 3a: Detailed study of the city drainage system and preparation of Drainage Master Plan (included under Implementation Assistance).

Sub-Component 3b: Improvement of link drains in the most flood prone and waterlogged areas of central part of the city.

Sub-Component 3c: Rehabilitation of the major drainage canals in the central zone of the city.

Sub-Component 3d: Rehabilitation of Pallichal Thodu in the Fort Cochin Area.

Sub-Component 3e: Improvement of other secondary drains and covering of existing open drains (Approx. length 272 km).

10.2.4 Solid Waste Management Component Kochi Municipal Corporation will require collecting, processing & disposing 90,000 MT of yearly solid waste generated from a population of approximately 683,000 by 2031 assuming an average per capita waste generation of about 300 gm per person in 2031. The proposed component under KSUDP, contributes in achieving the target through proper collection, transportation with additional equipment, construction of a mechanical aerobic compost plant and sanitary landfill facility, in order to collect and process approximately 78,000 MT of solid waste from 660,000 users in the urban areas of Municipal Corporation in the year 2021. Targets are to collect 100% of the waste from both high density and low-density areas as the public health risks increase due to inadequate waste collection. Details of the solid waste composting and landfill site is presented in Figure 10-5.

Total component beneficiaries at EOP (2011) will be 567,900 of which 41,400 are poor.

Sub-Component 4a: Street Cleansing

Supply of long handle brooms, 6-bin (30 liters capacity each) containerized wheel borrows, metal tray, shovels, etc. to the sanitary workers.

Sub-Component 4b: Primary collection and storage

Purchase of 130 small (0.5 m3) and 87 medium (1.0 m3) and 69 dumper placer (3.0 m3) containers together with 48 auto pickups for primary collection of waste from households and small business.

Sub-Component 4c: Waste transportation

Purchase of a fleet of 14 dumper placers for final disposal transportation.

Sub component 4d: Waste treatment and disposal

Civil works and mechanical equipment for the construction and operation of compost plant and sanitary landfill site (15.19 Ha).

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10.2.5 Roads and Transportation Component Roads and urban transport proposals are based on a Conceptual Road Network Plan (CRNP) prepared for the city, which are based on previous comprehensive traffic and transport schemes. The CRNP also drew from inputs based on discussions with officials from the municipal corporation, Development Authority, Town Planning Department, Public Works Department and the Transportation Advisor to Government of Kerala (GoK), Prof. Dr. NS Srinivasan. The CRNP also takes into consideration the existing network, directions of likely development, Master Plan/Traffic Study proposals and stakeholder suggestions. Urban roads and transport proposals are detailed in Figure 10-6.

Total component beneficiaries at EOP (2011) will be 123,100 of which 13,600 are poor.

Sub-Component 5a: Upgrading of Priority Roads

Upgrading to three lane road - 0.8 km length; and

Upgrading to four lane road – 0.6 km length;

Sub-Component 5b: Improvements to 9 Priority Roads for 43 km length with covered drain, footpath, guard rails, bus bay etc.

Sub-Component 5c: New Infrastructure

Construction of link road to stadium (1.5km.);

Twin carriageway bridge over canal on SA Road;

Sub-Component 5d: Improvements to Road Junctions

Improvements to 12 critical junctions on the arterial roads with heavy turning traffic.

10.3 Part B: Urban Management and Institutional Development While KSUDP will ensure infrastructure provision in the five municipal corporations, for long-term sustainability of the assets created and for effective management of urban basic services, it is imperative to address key management issues. Infrastructure creation under KSUDP will be implemented through the Project Management Office (PMO) at the state-level in association with Project Implementation Units (PIUs) at each corporation; Kudumbashree will advise and monitor poverty alleviation components in the city corporations. The urban management component under KSUDP is related to institutionalizing a system to address the municipal corporations’ ability to sustain service provision and the LSGD’s ability to oversee service delivery by LSGIs. In summary, the urban management and institutional development under KSUDP will address:

Capacity building of the Local Self Government Department and the Directorate of Urban Affairs regarding internal systems and procedures and ULB performance monitoring;

Capacity building of the five Project municipal corporations comprising urban planning, asset inventorization, accounting and financial management;

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Municipal staff training on project development, design and implementation – this shall apply to the five municipal corporations and 53 municipalities; and

Community development and participation including poverty alleviation tracking.

From the urban management perspective, KSUDP will complement the activities envisaged under the ADB aided Modernizing Government Program (MGP). Urban Management and Poverty Alleviation activities under KSUDP would address select initiatives in MGP’s Theme V on Effective, Efficient and Accessible Local Self Government and shall include:

Five-Year Planning Framework. Asset management plans, community rehabilitation plans for the physically and mentally challenged, and spatial plan with focus on connectivity.

Local Economic Development. Identification of micro-enterprise opportunities for the poor.

Strengthen Local Self Governments. New office management systems, procurement manuals, public works manual, IT plan, budgeting, accounting and resource mobilization.

10.3.1 State Level Institutional Development The current role of the LSGD is primarily related to policy formulation and administrative control of all agencies within its purview; the DUA shares this responsibility and facilitates in tracking Plan fund flows / devolution and human resource / personnel management. However, in order to enhance the role of the LSGD and DUA in urban management, the outcomes of capacity building assistance activities comprise (i) comparative performance assessment / municipal database institutionalized at the DUA and maintained by the DUA for ready reckoning by the State in policy matters; (ii) database on the ULBs’ human resources/personnel; (iii) preparation of budget manual; (iv) State Policy on environmental sanitation infrastructure cost recovery; and (v) State Policy/Guideline on financing patterns for infrastructure projects.

10.3.2 Municipal Corporation Institutional Development The capacity building assistance to the five municipal corporations is aimed at addressing the planning, core service delivery, institutional development and financial management improvements. Key outputs of the capacity building assistance comprise (i) Geographical Information System (GIS) based maps – for detailed engineering designs (following topographic surveys) and property mapping; (ii) database on municipal assets and properties (property tax mapping) – property tax assessments and existing service utility lines; (iii) financial management reforms through property tax rationalization and accounting reforms; (iv) undertaking other e-governance initiatives; and (iv) developing performance based contracts for procurement, infrastructure creation and service provision.

10.3.3 Municipal Staff Training Under KSUDP, the objective of the training support is to address three key elements comprising effective planning and infrastructure provision, core service delivery and asset management, and prudent financial management. The training assistance shall address the following aspects (i) sensitization / orientation training; (ii) conceptual training; and (iii) implementation training. It is envisaged that this training and capacity building program will target the five Municipal Corporations and 53 Municipalities. KILA will impart training to guide staff in appreciating project structuring and feasibility analysis; this activity will

FR Volume 2 - City Report - Kochi PAGE 100 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation run parallel with the works of the Design and Supervision Consultant (DSC) in the five Corporations to help staff contribute in the works of the DSC. Preliminary sessions of the implementation training will commence before construction contracts are awarded; main sessions on physical and financial monitoring will commence once the contractor is appointed for project implementation.

10.3.4 Poverty Alleviation Under KSUDP, the objective of capacity building for poverty alleviation initiatives is to ensure that the Project benefits reach the poorest of poor and that all stakeholders involved in the Project are well informed regarding the activities and process to achieve Project activities. A key component for successful implementation of poverty alleviation initiatives is the constitution of a Civil Society Organization (CSO), which is expected to identify requirement of the poor and vulnerable, and facilitate Project implementation. The CSO will essentially comprise city-level stakeholders including but not limited to the Municipal Corporation, business groups, and resident welfare associations, NGOs, CBOs, CDS and Kudumbashree. Training of CSO members, UPA staff at MC, Kudumbashree and CDS members is therefore imperative and may be carried out through identified training institutes. While a training needs assessment is a requisite for identifying areas of capacity building, the following is an indicative list

Community Infrastructure Fund (CIF). These activities may include (i) planning and identification of community infrastructure needs; (ii) operational and maintenance issues relating to infrastructure provision; and (iii) awareness regarding women empowerment, environmental health and diseases, and education.

Poverty Social Fund (PSF). These activities may include (i) conceptual clarity for scaling-up livelihood initiatives through livelihood development strategies; (ii) facilitating confederation of Self Help Groups to graduate into Micro Finance Institutions (MFI); and (iii) focus on business development initiatives for micro enterprises.

Strategic Programs. These may include (i) project development programs with specific reference to CIF and PSF utilization; (ii) CSO networking and resource convergence; and (iii) creating strategy mechanism for CSO to run programs under health, sanitation and income generation.

10.4 Part C: Implementation Assistance The Project Management Office (PMO) based in the state Local Self Government Department (LSGD) and the Project Implementation Units (PIU) based in the 5 Project cities will implement KSUDP. A Project Management Consultant (PMC) group comprising international and domestic firms will be located in Thiruvananthapuram to assist the PMO in project management and two domestic Design and Supervision Consultant (DSC) firms will be provided to assist each PIU in the project cities. A domestic Public Relation Consultant (PRC) firm will be employed by the PMO to make the public aware of the short-term inconveniences and long-term benefits of the project. A domestic Benefit Monitoring and Evaluation Consultant (BMEC) firm will be required to help the PMO in generating baseline data, which will be monitored to assess impact of the Project. The PMO, with assistance from the PIUs, will identify and recruit NGOs in each Project city primarily for assisting in the poverty alleviation planning process through community participation, the public awareness campaigns and project benefit monitoring and evaluation; the NGOs may also assist with any rehabilitation and resettlement activities. Chapter 11 provides further details on implementation.

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11. CITY SUB-PROJECT IMPLEMENTATION

11.1 Executing and Implementing Agencies 11.1.1 Executing Agency The Local Self Government (LSG) Department of the state government would be the Executing Agency (EA) of the project and will be responsible for overall strategic guidance, technical supervision, execution of the project, and ensuring compliance with the loan covenants. A state-level Project Management Office (PMO), led by a full-time Project Director executes the project; he/she will have no other duties within the LSG or elsewhere. The Project Director, supported by the PMO and consultants, will: (i) coordinate all activities under the Project; (ii) will be responsible for overall project implementation, monitoring, and supervision; and (iii) will directly report to the Secretary, LSG (Urban) Department. A state-level Empowered Committee (EC) will be set-up with full powers to decide on matters related to the project. The Project Director would be the member secretary; the members of the committee include the Chief Secretary (chairperson), Secretaries of Planning, Finance, Local Self Government, Water Resource (or represented by MD, KWA and Chief Engineer, Minor Irrigation) and Public Works. The Director, Kudumbashree will also form a part of the EC. Other relevant officials may be invited as necessary. Once the project is made effective, the EC will meet regularly to review project performance and decide on major issues, such as counterpart funding, implementation bottlenecks, land disputes, special procurement, policy reforms, etc.

A Tender Approval Committee (TAC) comprising Secretary, LSG (U), Secretary, Finance, and PD, KSUDP will approve all tenders related to KSUDP implementation; the EC will delegate powers related to tender approvals to the TAC. The TAC will take decisions related to all tenders under KSUDP.

11.1.2 Implementing Agencies Given the multiplicity of functions and the overlap in service provision, identifying the implementing agency is critical for smooth operations. The Municipal Corporations will be the implementing agencies conforming to GoK’s policy of decentralizing planning and service delivery. A city-level Steering Committee (SC) in each project city would be constituted for overcoming any bottlenecks in project progress. The SC would constitute the District Collector, Mayor, Corporation Secretary, representatives of State-level departments in the city (Public Works Department, Electricity Board, Kerala Water Authority, Pollution Control Board, etc.), and representatives of chamber of commerce, industry and NGOs. Besides reviewing project progress, the SC also sorts out local issues and provides guidance on policy matters. The members of the Civil Society Organization (CSO) will jointly discuss and prepare poverty alleviation projects, which will be approved by the City-level Steering Committee. Kudumbashree will continue to play an active role in advising and monitoring activities facilitating poverty alleviation.

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11.2 Project Management 11.2.1 Project Management Office The PMO is responsible for (i) appointing project management consultants, detailed design and construction supervision consultants, benefit monitoring and evaluation (BME) consultants, public relations and community awareness consultants, and NGOs; (ii) approving the design of the investment components in consultation with the project cities; (iii) pre-qualifying contractors; (iv) implementing public relations and community awareness programs; (v) preparing standard bid documents; (vi) monitoring the tendering process and guiding the project cities in bid evaluation and preparing bid evaluation reports for approval by ADB; (vii) procuring equipment at the state-level; (viii) coordinating with ADB on matters related to disbursements; (ix) conducting the training and capacity building programs; (x) providing support under the institutional development assistance; and (xi) maintaining project documents and submitting timely reports (including monthly project performance reports, quarterly progress reports, BME reports) to ADB. The PMO is headed by the Project Director and supported by deputies, based on the project size. The PMO is staffed with senior level technical, financial, social, capacity building/management and procurement officers to manage all technical and procurement and loan account administration. An accounting and administrative unit manages procurement and loan account administration. The EC will authorize the Deputy Project Director, Technical, to provide technical sanctions to all works under KSUDP after carrying out suitable proof-checking of designs.

11.2.2 Project Implementation Units A PIU will be established within each Municipal Corporation. The responsibilities of the PIU include: (i) carrying out detailed surveys, investigations and engineering designs of individual city components; (ii) tendering, evaluating bids and awarding works, contract administration, supervision and quality control; (iii) measuring works carried out by the contractors and certifying payments; (iv) conducting public awareness campaigns and participation programs, (v) carrying out the Benefit Monitoring and Evaluation (BME) studies; (vi) carrying out environmental assessments; (vii) ensuring project city compliance with loan covenants; and (viii) preparing monthly reports. The Design Supervision Consultant (DSC) supports the PIU in all the aforesaid activities. A Project Manager will head the PIU and will be supported by sector specialists in environmental and civil engineering, as appropriate. The PIU will also comprise staff involved in procurement, accounts and community development. Staff deputed from the Revenue Department shall handle all land acquisition and resettlement and rehabilitation issues. The Project Manager at the PIU will report to the Secretary, Kochi Municipal Corporation, and the Project Director at the PMO. All administrative and project co-ordination related issues will be handled by the Secretary. The Secretary will also be authorized to release payments to contractors based on the approval/certification of the Project Manager, PIU, and subject to fund release by the PMO. The Secretary shall interface with the Municipal Corporation Council and KSUDP regarding Project progress.

11.2.3 Project Management and Design Consulting Services Consulting services are required for project management, engineering design, construction supervision, procurement of goods and services, public relations and awareness, and BME. Consultants would be selected and engaged in accordance with ADB’s Guidelines on the Use of

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Consultants and other arrangements satisfactory to ADB for selecting and engaging domestic consultants.

Project Management Consultant (PMC). A Project Management Consultant group comprising international and domestic firms will assist the PMO in project management activities including reviewing engineering designs, procurement, and implementation. The PMC also assists the Project Management Office (PMO) and the Project Implementation Units (PIUs) in project formulations, management, monitoring and evaluation, financial and environmental management aspects, public relations and awareness, training and capacity building, and institutional development / strengthening.

Design and Supervision Consultant (DSC). The main objectives of the DSC is to update maps and plans, undertake survey, investigations and prepare detailed designs of various project components for each project city, prepare technical specifications and contract documents, assist in construction supervision and quality control, and undertake works measurement. Two DSCs will support PIUs in the five Corporations; one for the southern region covering Thiruvananthapuram and Kollam and the other for the northern region covering Kochi, Thrissur and Kozhikode.

Public Relations Consultant (PRC). A domestic Public Relations Consultant firm appointed will facilitate public relation and awareness programs (PRAP) on project related issues. The Information, Education and Communication (IEC) materials developed by the PRC is utilized in public awareness campaigns.

Benefit Monitoring & Evaluation Consultants (BMEC). A domestic Benefit Monitoring & Evaluation (BME) consulting firm recruited by the PMO will identify and evaluate broad macroeconomic, socio-economic and environmental impact of the Project and ensure that project facilities are managed efficiently and the benefits of the project reach the target groups. For this purpose, the BME consultants will liaise closely with the PMO, PMC and DSCs to measure the benefit resulting from the Project, and facilitate the PMO in correcting any problems or issues arising from the feedback provided.

Non-Governmental Organizations (NGOs). NGOs recruited in each project city will assist in public awareness campaigns and benefit monitoring and evaluation studies. NGOs will also form a part of the CSO to identify and help implement poverty alleviation components. NGOs generally have experience in community mobilization, training, information dissemination, communication and media development covering the fields of municipal service provision, socio- economic surveys, environmental health, income generation, education, gender and resettlement.

Figure 11-1 indicates the propose project management structure.

FR Volume 2 - City Report - Kochi PAGE 104 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation Figure 11-1: KSUDP – Proposed Project Management Structure

AsianAsian DevelopmentDevelopment Government BankBank of India

Govt. of Kerala Empowered Committee (EC)

Project ProjectProject Project City-level Steering Management ManagementManagement Management Committee (each city) Office ConsultantsConsultants (PMC) (PMC) Office

Project Imp. ProjectProject Imp. Imp. Unit, Unit, ProjectProject Imp. Imp. Project Imp. ProjectProject Imp. Imp. ProjectProject Imp. Imp. Unit, Unit, Unit, Kochi ThiruvananthapuramThiruvananthapuram Unit,Unit, Kollam Kollam Unit, Kochi Unit,Unit, Thrissur Thrissur KozhikodeKozhikode

DesignDesign and and Supervision Supervision DesignDesign and and Supervision Supervision ConsultantsConsultants (DSC) (DSC) ConsultantsConsultants (DSC) (DSC) TVMTVM and and KLM KLM KCH,KCH, TSR TSR and and KZD KZD

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11.3 Procurement and Disbursement Procedure 11.3.1 Procurement of Goods and Works Goods, works, and services financed by ADB will be procured in accordance with ADB’s Guidelines for Procurement. Procurement will generally be carried out by the PIUs under the guidance of the PMO, except for equipment and vehicles common to all cities, which will be directly procured by the PMO. Equipment and selected materials will be acquired using international competitive bidding (ICB), international shopping (IS), and local competitive bidding (LCB) procedures as appropriate. To the extent possible, goods to be procured will be grouped into packages larger than $500,000 to be suitable for ICB procedures. Miscellaneous goods for immediate use that cannot be grouped into a larger contract and that cost less than $500,000 per contract will be procured through IS or LCB procedures. Off-the-shelf items and standardized products costing $100,000 or less will be procured following the State’s applicable procurement procedures acceptable to ADB.

Given the Project areas’ geographic location and the nature of works, civil works contracts valued at less than $5 million each would not be attractive to international bidders, and therefore will be carried out using LCB procedures acceptable to ADB. Some civil works such as road improvements, sewage treatment plants, pumping stations, and solid waste management sanitary landfill disposal sites will be undertaken on a turnkey basis. Where the cost, insurance, and freight or ex-factory cost of goods and supplies for permanent works of one package is estimated to equal or exceed 60%, such procurement package should not be treated as a civil works package. Equipment, materials or civil works costing $100,000 or less including for use by community organizations or NGOs for the slum improvement and poverty alleviation activities related to Community Infrastructure Fund (CIF) and Poverty Social Fund (PSF) will be procured following the State’s applicable procurement procedures acceptable to ADB.

11.3.2 Disbursement Procedures The loan proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook and Interim Guidelines for Disbursement Operations, LIBOR-Based Loan Products. An imprest account will be established at the Reserve Bank of India and to expedite implementation of the Project through the timely release of loan proceeds. It is proposed that a second-generation imprest account (SGIA) will be opened immediately, in compliance of the State Government, with prescribed procedures as agreed-upon by the Government of India (the Borrower) and ADB. Under the SGIA, the Controller of Aid Accounts and Audit (CAAA) will pass on the rupee equivalent of ADB’s imprest advance to the EA through the budgetary mechanism. The EA will maintain the advance in a separate commercial bank account and withdraw from it only the eligible portion of expenditure. The SGIA would be managed, replenished, and liquidated in accordance with the Loan Disbursement Handbook and the detailed arrangements agreed to by the Borrower and ADB. The initial amount to be deposited in the imprest account will not exceed the lesser of the equivalent of six months expenditures or 10% of loan amount. The initial and subsequent amounts to be deposited in the SGIA will be determined by ADB in consultation with the Borrower.

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11.4 Procurement Packages and Implementation 11.4.1 Procurement Packages The sub-project components will be implemented in a number of separate packages, which are summarized in Table 11-1 with further details provided in Annex A.

Table 11-1: Proposed Contract Packages - Kochi

Package Package Name Estimated Completion Type of Code Base Cost Time Contract US$ Mill (Months) Water Supply Improvement Trunk water supply rehabilitation and LCB KOC-WS-01 4.40 24 strengthening Item Rate City water supply distribution network optimization ICB KOC-WS-02 5.92 36 and strengthening Item Rate Sewerage & Sanitation Improvement Extension of South Ernakulam city center ICB KOC-SS-01 6.77 39 sewerage (Popn. 60,000) Item Rate Extension of sewerage in North Kochi (Popn. ICB KOC-SS-02 8.62 42 100,000) Item Rate Construction of 10MLD Sewage Treatment Plant for South Ernakulam and 20 MLD Sewage ICB KOC-SS-03 (3.00) 30 Treatment Plant for North Kochi at Mundamveli. Turn Key (Lot 3 of Single Package) Sewer House Connections in South Ernakulam LCB KOC-SS-04 3.67 24 and North Kochi Item Rate Supply of Sanitation Maintenance Equipment ICB EQU-SS-01 (Part of single procurement package covering all (0.36) 12 Item Rate project cities to be organized through the PMO) Urban Drainage Improvement LCB KOC-DR-01 Urban Drainage Improvement 3.34 30 Item Rate Solid Waste Management Improvement LCB KOC-SW-01 Composting and sanitary landfill site development 2.44 18 Turn Key Procurement waste collection and transportation LCB KOC-SW-02 0.75 12 equipment Item Rate Roads and Transportation Improvement LCB KOC-RT-01 Upgrading and improvements of priority city roads 5.72 42 Item Rate

11.4.2 Implementation Schedule Beginning loan effectiveness from September 2005, the Project will be implemented over five years. Prior to this, LSGD with the assistance of the bridging TA consultants will carry out pre-investment / advance actions to avoid delays that would occur if such actions are taken after the loan effectiveness. In the first six months after loan effectiveness, the project implementation assistance consultant teams (PMC and DSCs) will be mobilized at the PMO and PIUs and will establish project guidelines and procedures. Detailed design for the infrastructure improvement investments will occur in the first twelve months of the Project following which construction packages will be tendered and awarded. Construction of urban facilities will commence 12 months from project mobilization. The capacity

FR Volume 2 - City Report - Kochi PAGE 107 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation building program under the Project will be conducted mainly in the first three years. The implementation schedule is given in Annex B.

11.5 Reports, Accounting and Auditing Requirement 11.5.1 Reporting Requirement The Government of Kerala will provide ADB with quarterly progress reports on Project implementation. The PMO will be responsible for obtaining and consolidating relevant information from the respective PIUs. The progress reports will describe physical progress, details of any modification required to the project implementation schedule, problems encountered, use of Community Infrastructure Fund and Poverty Social Fund, and an outline of the work for the next quarter. The report will also provide summary financial accounts of the Project: expenditure during the quarter, year-to-date expenditure during the quarter, year-to-date expenditure, and expenditure to date. The progress report is an executive summary of the detailed reports; with format and content permitting ADB staff to readily capture key information for inputting into the project performance report (PPR).

11.5.2 Accounting The PMO and the PIUs will establish and maintain separate accounts and records adequate to identify the incomes and expenditures related to the Project. They will be assisted by an adequate number of suitably qualified accounting staff including an accounts officer.

11.5.3 Auditing Detailed consolidated annual project accounts, as maintained by the PMO, will be audited by independent auditors acceptable to ADB and will be submitted to ADB within 9 months of the close of the fiscal year. The annual audit report will include the audit of the imprest account, SGIA, and SOE procedure, and a separate audit opinion on the use of the SGIA and SOE procedures. LSGD and the five project city corporations will be made aware of ADB’s policy on delayed submission, and the requirements for satisfactory and acceptable quality of the audited accounts.

11.6 Project Review Project performance will be reviewed in a three-tier system. First, the PMC will review progress on each component and the performance of each city PIU. Monthly performance reports will be prepared for each project city by the DSC and submitted to the PMO. The EC will conduct the second tier review during its quarterly meetings. The monthly project performance reviews and major policy issues will be reviewed and actions to be taken by the respective authorities will be recorded. The third tier review will be conducted by ADB every 6 months, with the ADB Review Mission visiting project cities, to discuss major issues with LSGD and the project city corporations and forward their opinion for action at the state government level.

The project review will be supplemented by a formal comprehensive midterm review with the participation of senior Central Government and State officials as well as ADB staff - when detailed design is completed and major contracts have been awarded and started. Following the review, corrective measures, as appropriate, will be introduced to remedy any identified weaknesses.

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11.7 Project Performance Monitoring System The Project Performance Monitoring System (PPMS) forms an essential part of Project Implementation and is a systematic set of procedures aimed at monitoring Project progress. The Project performance is measured through a set of defined indicators, which assist in evaluating the Project’s achievement in terms of the goals, purpose and outputs established in the Draft Project Framework. The responsibility for ensuring that the project performance monitoring system (PPMS) is established and undertaken rests with the PMO. PPMS indicators broadly cover (i) physical progress of infrastructure works; (ii) institutional development and capacity building; and (iii) impact assessment. Further details on PPMS are provided in Volume 1 – Main Report.

11.8 Long-Term Sustainability In the decentralized perspective, it is proposed that a City Planning and Engineering Department in the Municipal Corporation will be best equipped to carry out future project development, implementation and asset management. The Project Implementation Unit proposed for KSUDP implementation will draw staff from various State Line Departments. Through the Project period and with adequate training/capacity building initiatives, it is envisaged that the PIU staff will be well equipped to oversee long-term asset creation and service provision in the sectors of water supply, sewerage, urban drainage, solid waste management, and urban roads and traffic management.

The KM Act, 1994, provides the legislative framework for ULBs to undertake urban planning and takeover water supply and sewerage assets within its jurisdiction. Based on policy directives under GoK’s Urban Policy and Action Plan, 2002, and State Finance Commission recommendations, it is proposed to merge the PIU with the Corporation’s Engineering Department. The strengthened department will oversee spatial planning, infrastructure development and construction, and solid waste management. This arrangement will ensure long-term sustainability of KSUDP and provide for complete decentralization of infrastructure provision and urban basic service delivery.

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12. COST ESTIMATES AND FINANCING PLAN

12.1 Cost Estimates The list of subproject components was agreed upon with the Executive Agency (EA) and the Kochi Municipal Corporation (MC). This agreement was based on various criteria and priority needs. Improvement of the urban infrastructure is the top priority of the MC.

The total cost of the sub-project, including physical and price contingencies, is estimated at Rs.2,903.5 million (about US $57.3 million). The foreign exchange portion of the project cost is estimated at Rs.603 million (about US $11.9 million or 21% of total sub-project cost) with the balance representing the local cost portion. The local cost component is high as most of the equipment and construction materials are indigenously produced and are readily available. Table 12-1 summarizes the cost estimates. Detailed cost estimates are presented in Annex C.

Table 12-1: Summary of Sub-Project Cost Estimate

Components (Rupees Million) (US$ Million) % Base Costs Local Foreign Total Local Foreign Total Part A - Urban Infrastructure Improvement Water Supply 347.2 103.2 450.4 8.0 2.4 10.3 21 Sewerage & Sanitation 874.1 118.8 992.9 20.0 2.7 22.8 47 Urban Drainage 109.3 36.4 145.7 2.5 0.8 3.3 7 Solid Waste Management 120.3 18.8 139.1 2.8 0.4 3.2 7 Roads & Transportation 88.2 162.0 250.2 2.0 3.7 5.7 12 Total - Part A 1,539.2 439.1 1,978.3 35.3 10.1 45.4 93.9 Part B – Urban Management & Institutional Development Institutional Development 14.3 0.0 14.3 0.3 0.0 0.3 1 Total - Part B 14.3 0.0 14.3 0.3 0.0 0.3 0.7 Part C – Sub-Project Implementation Assistance Design and Construction 97.2 1.0 98.2 2.2 0.0 2.3 5 Supervision Consultants Incremental Administration (at PIU) 15.5 0.0 15.5 0.4 0.0 0.4 1 Total - Part C 112.7 1.0 113.7 2.6 0.0 2.6 5.4 Total Base Costs (A+B+C) 1,666.2 440.1 2,106.3 38.2 10.1 48.3 100.0 Physical Contingencies 118.0 30.1 148.2 2.7 0.7 3.4 7 Price Contingencies 516.3 132.7 649.0 4.4 1.1 5.6 12 Total Sub-Project Costs 2,300.5 603.0 2,903.5 45.4 11.9 57.3 118.6 a) At November 2004 prices b) Physical contingencies are 7.5% on civil works and 5% on others, represent about 7% of the base cost. c) Price contingencies are provided at 2.4% for foreign exchange and 6% for local currency costs. d) Includes taxes and duties estimated at US$4.0 million (7.0% of Project Cost). e) Totals may not add due to rounding.

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12.2 Financing Plan The borrower of the ADB loan will be the GoI. In accordance with the new procedure (under finalization), it is assumed that the GoI will on-lend the proceeds of the ADB loan to GoK in local currency. The loan portion will carry interest at the same rate as ADB is charging GoI, (the current on-lending rate has been assumed on this basis pending finalization of the same at GoI) with similar repayment terms as between the ADB and GoI, i.e. 25 years, including a five-year grace period.

Under the Government’s new sub-lending procedure, GoK would further sub-lend the proceeds of the GoI assistance to the Project MCs in the form of loan. This loan portion would carry interest at the same GoI on-lending rate with similar repayment terms as between the GoI and GoK. In such a case, GoK would pass on to the MCs an amount equivalent to US $46.6 million (about Rs.2,032 million). It is assumed that the remaining 30% (about Rs.871 million) would be contributed by the GoK and MCs from its own resources in equal proportions. Table 12-2 summarizes the city level financing plan if the new sub-lending procedure is used. At city level, the new sub-lending procedure translates to a 70- 15-15 (loan-grant-equity) financing mix.

Table 12-2: City ρLevel Financing Plan (Rs. Million)

Particulars Local Foreign Total Percent ADB Loan (70%) 1,429.45 602.98 2,032.43 70.0% Grant to MC (50% of 30%)-Equity 435.52 435.52 15.0% MC Contribution - Equity 435.52 435.52 15.0% Total 2,300.49 602.98 2,903.47 100.0%

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13. FINANCIAL ANALYSIS

13.1 General Detailed financial analyses were conducted to examine the financial viability of the revenue generating subprojects. The analyses were undertaken in accordance with ADB's Framework for the Economic and Financial Appraisal of Urban Development Sector Projects. Financial Internal Rates of Return and Average Incremental Financial Costs were calculated and sensitivity analyses were carried out for each subproject. The proposed tariff levels were assessed to ascertain their affordability to the beneficiaries, in particular the low-income group and poor households, i.e. those below the poverty line. Financial projections for the MC were also performed to determine the financial capability of the MC to implement and operate the subprojects on a sustainable basis.

13.2 Assumptions Used in Financial Projections Institutional Arrangement. Water and sewerage are currently the responsibility of the Kerala Water Authority (KWA) while the Kerala Municipalities (KM) Act 1994 and the Decentralization of Powers Act 2000 empower the urban local body (ULB) to undertake future water and sewerage service provision. GoK’s Minor Irrigation Department maintains primary drainage channels / canals while the ULB maintains secondary / link drains and roadside drains. Based on the ownership of roads, the State Public Works Department or the ULB maintain their respective stretches. Solid waste management is carried out by the ULB.

Although the KSUDP subprojects will be implemented through the MC PIU, the institutional arrangements used for the financial projections and analysis of the subprojects are based on the proposal as outlined in Volume 7, Chapter 5. These are:

Sub-Project Components Proposed Responsibility a. Water Supply 1. Trunk water transmission main rehabilitation Kerala Water Authority 2. Leak detection program with rehabilitation / strengthening of the existing Kerala Water Authority distribution network b. Sewerage & Sanitation 1. Extension of sewerage in S. Ernakulam (60,000 popn.) with 10 MLD STP Municipal Corporation

2. Extension of sewerage in North Kochi (100,000 popn.) with 20 MLD STP Municipal Corporation 3. Supply of sanitation and sewer maintenance equipment c. Urban Drainage Municipal Corporation d. Solid Waste Management Municipal Corporation e. Urban Roads / Transport 1. Upgrading of 2 roads (4.8 km) Municipal Corporation 2. Junction improvements (10 nos) 3. Road safety proposals for 39km length on 8 critical roads 1. Upgrading of 1 road (0.6 km) Municipal Corporation 2. Construction of a new road to stadium (1.5 km) 3. Junction improvements (2 nos) 4. Bridge over Canal on SA Road f. Poverty Alleviation Municipal Corporation

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As discussed in Volume 7, Chapter 5, the transfer of responsibility for water distribution and sewerage system within the MC jurisdiction to the MC in the medium term is based on the proposed road map for a decentralized service provision of water and sanitation. KWA, however, will continue to be responsible for bulk water supply (headworks, water treatment and transmission). For purposes of the financial projections, therefore, it is assumed that in the case of water supply, the responsibility for rehabilitated / improved water supply systems will continue to be with KWA until agreement is made for transfer to the MC. Corresponding to this, Water Supply has been segregated from the MC’s revenues & expenditures while analyzing the overall financial position and capabilities of the MC. Investments in other components have been considered as part of the future responsibility of the MC. During the project implementation period until the actual transfer of responsibility, KSUDP and KWA will build the capacity of MC staff in water supply and sewerage asset planning and management. Additionally, KWA in coordination with the MC will identify and map the water and sewerage assets within the MC jurisdiction area, conduct asset condition survey and valuation in preparation for possible future transfer of the assets to the MCs.

Financial projections performed for the MCs, reflecting the proposed institutional arrangements discussed in the preceding paragraphs, consist of projected revenue receipts and revenue expenditures during the assumed implementation period (FY 2005-06 to FY 2010-11) plus 10 years after project completion. The projected revenue receipts include all receipts from own source tax income like property and entertainment taxes and own source non-tax income like direct user charges and income from municipal properties; and all revenue transfers from the State Government in the form of assigned and shared taxes and grants-in-aid. The projected revenue expenditures include all recurrent expenditures, including those of the subprojects, to be met from revenue receipts. The financial projections also include the MCs’ assumed equity contribution to be met from its own resources in accordance with the financing plan.

Property Tax. The assumptions used for the projection of property tax income include: i) the number of taxable properties will increase by 1.0% annually; b) in FY 2005-06 and every 10 years thereafter, property survey will be undertaken resulting to an increase in number of properties by 5% for those years; iii) revision of annual rental value (ARV), which has been long overdue as mandated by law, will increase ARV by 60% to take effect in FY 2007-08; iii) the revision of ARV every 4 years in accordance with the law will be implemented and ARV will increase by at least 20%; iv) overall collection efficiency at about 80% will be achieved gradually with improved systems and procedures by FY 2007-08 and sustained over the forecast period.

Other Own Source Income. Profession tax, entertainment tax, other municipal taxes, receipts from municipal properties, license fees and other miscellaneous own source income are projected to increase equivalent to the assumed inflation rate of 6% over the forecast period.

State Government Revenue Transfers. Assigned and shared taxes and grants-in-aid are estimated to increase at 6% over the forecast period. Starting FY 2011-12, the initial year of KSUDP loan repayment, additional grants shall be provided equivalent to the portion of debt service repayments.

Revenue Expenditures. Projected salaries, establishment costs, operation and maintenance costs of existing municipal services and facilities are based on actual and budgeted financial data. These

FR Volume 2 - City Report - Kochi PAGE 113 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation existing costs are estimated to increase equivalent to the assumed inflation rate of 6% over the forecast period. The operation and maintenance costs for the new works are based on engineering estimates taking into account the size of the treatment facilities, length of the pipe network, roads and drains maintained, volume of water produced and wastewater treated, volume of solid wastes collected and disposed, and number of population served. Operation and maintenance unit costs for the new works are estimated to increase equivalent to the assumed inflation rate of 6% over the forecast period.

13.3 Cost Recovery Water Supply. The existing KWA tariff came into effect on 1st April 1999 but has not been revised since. Under the existing tariff, KWA operation is highly subsidized by the State Government. The revenues collected from water sales represent only about 53% of operation and maintenance cost. KWA had requested the State Government in January 2000 to increase the water tariff effective 1st April 2000 and to allow KWA to revise the water tariff from time to time corresponding to the increase in power tariff. The State Government is yet to take a decision on this request.

As part of the Financial Improvement Action Plan (FIAP), it is proposed that KWA’s request for a 50% tariff increase be approved by the State Government with effect in 2006. Another increase of 50% is proposed in the financial year 2009-10, before the last year of project implementation. Thereafter, it is proposed that tariffs should increase regularly every 3 years by at least 22% (3% above the compounded growth of assumed inflation). It is envisaged that the periodic tariff increases coupled with the reduction in NRW through KSUDP will gradually eliminate State operating subsidies on full implementation of the project.

A policy should be agreed to increase the provision of direct house connections in place of providing public standposts. This action would reduce the burden of the ULBs for the payment of standposts by increasing consumers directly connected into the water tariff net. The current connection fee is assumed to remain the same to make it affordable and encourage shift to house connection.

In the medium term, it is assumed that the MC will continue not to collect any charges from street tap users for practical and affordability considerations; the low-income group and poor households being the major users of street taps. The MC, however, will institute control measures for the use of street taps to avoid wastage.

Sewerage. Presently, KWA does not impose monthly user charge for customers with sewer connections. However, it collects connection fee at the rate of 10% of estimated cost or a minimum of Rs.500 for domestic, Rs.1,000 for non-domestic and Rs.2,500 for industrial. Like water supply, sewerage operation is subsidized by the State Government.

As part of the FIAP, it is proposed that at the start of FY 2009-10 a monthly sewerage charge will be collected from customers with sewer connections. For the existing sewerage systems which will be operated by KWA until future transfer to the MCs, it is proposed that a 40% sewerage surcharge be included in the KWA water bill.

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For the new sewerage systems which will be operated by the MC, it is proposed that there will be a fixed monthly sewerage surcharge. Assuming 135 lpcd water supply and average household size of 5 this sewerage surcharge would be Rs.90 per month per connection until end of project. Thereafter, it is proposed that the sewerage surcharge should increase regularly every 3 years by at least 22% (3% above the compounded growth of assumed inflation). When water distribution responsibility is transferred from KWA to the MC, it is proposed that a 40% sewerage surcharge be included in the MC water bill.

With this surcharge of 40% on prevailing water tariff, it is envisaged that there will be full recovery of O & M cost thus requiring no State support in the form of operating subsidies post project implementation. The Project includes sewer house connections as part of the sewerage component to ensure connection and utilization of the new investment. The current fee for future connections (post project) is assumed to remain the same to make it affordable and encourage connection to the system.

Solid Waste. At present, no fees are collected by the MC from residents in whose areas the MC is collecting solid waste. With low service coverage by the MC, households in areas not served by the MC spend about Rs.30 a month for the collection and disposal of their wastes by private groups or they dump their waste in nearby open areas or burn them on their premises.

With the proposed subprojects, it is envisaged that service coverage will cover the whole MC area. However, the subproject will not be sustainable without the collection of minimal user charge. As part of the FIAP, it is proposed therefore that a solid waste fee of Rs.30 per month for domestic, Rs.150 for shops, restaurants etc. and Rs.300 per month for large establishments like hospitals, hotels etc. be collected starting FY 2006-07. It is projected that the fee will increase every 3 years by 20% to achieve sustainability.

13.4 Financial Internal Rate of Return The financial viability of a subproject is assessed by comparing the subproject’s Financial Internal Rate of Return (FIRR) with the Financial Opportunity Cost of Capital (FOCC). As proxy for the FOCC, the Weighted Average Cost of Capital (WACC) of the subprojects in real terms is used. FIRR is the discount rate that equalizes the present values of costs and revenues over the subproject life while the WACC represents the cost incurred by the MC to implement the subprojects.

The WACC of the subprojects is 4% (real terms). The calculation of the WACC is shown in the table that follows.

Table 13-1: Weighted Average Cost of Capital

Particulars Grant Equity Total Weight (%) 70.00% 30.00% 100.0% Nominal Cost (%) 0.00% 10.00% Tax Rate (%) 0.00% 0.00% Tax Adjusted Nominal Cost (%) 0.00% 10.00% Inflation Rate (%) 6.00% 6.00% Real Cost (%) 0.00% 3.77% Minimum Rate Test (%) 4.00% 4.00% Weighted Component of WACC (%) 2.80% 1.20% Weighted Average Cost of Capital (Real) 4.00%

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FIRR was calculated for each of the revenue generating subprojects, i.e. water supply, sewerage and solid waste management. The assumptions and approach used in the calculation of the FIRR include: (i) all revenues and costs are stated at constant November 2004 prices; (ii) all revenues and costs are calculated on an incremental basis, i.e. difference between “with project” and “without project” situations; (iii) subproject capital expenditures are recognized at the time they are incurred; and (iv) equipment replacement costs have been included every 10 years for water supply and sewerage and every 5 years for solid waste management.

Sensitivity analyses were also carried out to determine the possible effects of adverse changes on the subprojects. The adverse changes are: (i) 10% increase in capital costs; (ii) 10% increase in O&M costs; (iii) 10% decrease in revenues; and (iv) one year delay in benefits. For water supply subproject, additional sensitivity analyses were done for the following adverse conditions: (i) NRW assumption higher by 10%; (ii) water demand assumption lower by 10%; and (iii) tariff increase assumption lower by 50%.

The results of the FIRR calculation and sensitivity analyses are summarized in the table below. The details of the calculation and analyses are in Annex E.

Table 13-2: Summary of Financial Evaluation

Component NPV @ 4% FIRR, SI Base Capital O&M Revenues Benefits Rs. Million & SV Case Costs Costs - 10% Delay by + 10% + 10% One Year Water Supply 835.6 FIRR (%) 12.92% 11.9% 12.7% 11.6% 11.4% SI 0.85 0.14 1.11 SV (%) 118.1% 733.2% 89.7% Sewerage (961.4) FIRR (%) (11.6)% (12.1)% (13.8)% (14.7)% (12.4)% SI SV (%) Water & (125.8) FIRR (%) 3.4% 2.7% 3.0% 2.3% 2.6% Sewerage SI 2.63 1.02 4.90 SV (%) 38.0% 98.4% 20.4% Solid Waste 155.1 FIRR (%) 10.7% 9.3% 9.4% 7.8% 8.2% SI 1.47 1.41 3.65 SV (%) 68.2% 71.1% 27.4% Additional Sensitivity Analysis Component NPV @ 4% FIRR, SI Base NRW Demand Tariff Rs. Million & SV Case + 10% - 10% Increase - 50%

Water Supply 835.6 FIRR (%) 12.92% 12.0% 9.4% 4.6% SI 0.80 3.68 3.67 SV (%) 125.2% 27.2% 27.2% NPV = Net Present Value SI = Sensitivity Indicator (ratio of percentage change in NPV to the percentage change in a variable) SV = Switching Value (percentage change in a variable required for the NPV to become zero)

The water supply and solid waste management subprojects are financially viable with FIRRs higher than the WACC. The sewerage subproject, however, has a negative FIRR due to high investment

FR Volume 2 - City Report - Kochi PAGE 116 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation costs and low sewerage charge. The combined water supply and sewerage subprojects have a positive FIRR lower than the WACC.

Sensitivity tests indicate that the subprojects’ viability is most sensitive to decreased revenues and benefits delayed by one year. Periodic revisions of user charges as described in the cost recovery proposals and prompt completion of the subprojects are therefore very vital to the subprojects’ financial viability.

13.5 Average Incremental Financial Cost and Subsidy In setting the tariff, the appropriate target level to achieve subproject financial adequacy and sustainability is the long run marginal (LRM) cost which includes both the incremental investment and O&M costs. The Average Incremental Financial Cost (AIFC) is regarded as an approximation of the LRM cost. The AIFC for each subproject was calculated by dividing the present value of the incremental subproject costs streams (capital and O&M) by the present value of the incremental quantity streams (volume of water consumed in the case of water supply, volume of wastewater flow in the case of sewerage and metric tons of garbage collected and disposed in the case of solid waste management). The costs and quantity streams were both discounted at the WACC of 4%.

The following table summarizes the calculation of the AIFC, its relation with the average tariff and the resulting financial subsidy.

Table 13-3: Average Incremental Financial Cost

Particulars Water Sewerage Water Supply Solid Waste Supply & Sewerage PV of Project Costs @ 4% (Rs. Million) 715.6 1,408.6 2,124.2 543.8 PV of Project Revenues @ 4% (Rs. Million) 1,587.0 503.1 2,247.9 698.9 PV of Quantity* @ 4% 312.8 81.3 289.2 483,916.2 AIFC** 2.3 17.3 7.3 1,123.7 AIFC (Rs./KL) Only O&M 0.6 5.7 Average Tariff** 5.1 6.2 7.8 1,444.2 Financial Surplus (Subsidy)** 2.8 -11.1 0.4 320.5 AIFC Recovery (%) 221.8% 35.7% 105.8% 128.5% * Million kiloliter for water supply & sewerage; metric ton for solid waste ** Rs./KL for water supply & sewerage; Rs./MT for solid waste

The above table shows that the average tariffs for the water supply and solid waste management subprojects could cover fully all their respective incremental investment and O&M costs with their average tariffs higher than their respective AIFCs. But for the sewerage subproject, its average tariff could not cover fully all its costs.

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Table 13-4: Subsidy Analysis

Particulars Industrial Commercial Domestic Standpost Water Supply Average Tariff (Rs./KL) 21.90 20.68 5.71 AIFC (Rs./KL) 2.29 2.29 2.29 2.29 Financial Surplus (Subsidy) (Rs./KL) 19.61 18.39 3.42 (2.29) AIFC Recovery (%) 957.3% 903.8% 249.6% Water Consumption (Million KL) 6.78 98.31 409.47 31.44 Financial Surplus (Subsidy) (Rs.Million) 132.87 1,807.75 1,401.68 (71.93) Sewerage Average Tariff (Rs./KL) 8.76 8.27 2.28 0.00 AIFC (Rs./KL) 17.33 17.33 17.33 0.00 Financial Surplus (Subsidy) (Rs./KL) (8.57) (9.06) (15.05) 0.00 AIFC Recovery (%) 50.5% 47.7% 13.2% 0.00 Average O&M Cost (Rs./KL) 5.68 5.68 5.68 0.00 O&M Cost Recovery (%) 154.1% 145.5% 40.2% 0.00

The above analysis indicates that all customers with house connections cross-subsidize the use of water from street taps. The analysis also indicates that sewerage O&M costs for domestic customers with sewer connections are subsidized. This subsidy is a result of the low maximum rate set by the State Government for sewerage charge to encourage connection to the system and attain its environmental objectives.

13.6 Beneficiary Affordability Willingness to Pay (Survey Results). For survey purposes, the households were categorized into 6 income groups as explained in detail in Chapter 3 (Socio-Economic Profile). The 6 household categories are: High Income Group (HIG), Middle Income Group (MIG), Low Income Group (LIG), Upp11er crest of the Poor (UP), Just above Vulnerable (JV) and Most Vulnerable (MV). The population distribution by income group18 is as follows: HIG (7%), MIG (40%), LIG (47%), UP (2%), JV (2%) and MV (2%).

The results of the survey did not specify an amount that each group is willing to pay for improved water supply and sanitation services. The survey however indicated a low willingness to pay among the poor and a bit higher willingness to pay from the non-poor for obvious financial reason. The low willingness to pay for improved services among the poor is largely due to: (i) relative satisfaction with the present water supply and sanitation services; (ii) use of water from street tap, which is the major source of water among the poor, is currently free of charge; and (iii) respondents’ view that government has the responsibility to provide the services to its residents.

Affordability Analysis. An analysis was undertaken to determine if the beneficiaries, in particular the LIG and poor households, could afford the proposed tariff charges. The generally accepted guideline is that the combined charges for water supply and sanitation should not exceed 5% of household

18 Source: State Planning Board “Economic Review 2002”

FR Volume 2 - City Report - Kochi PAGE 118 TA 4106 –IND: Kerala Sustainable Urban Development Project Project Preparation income. The average household income gathered in the socio-economic survey (September 2004) and the assumed water usage in 2010 were used in the analysis. The analysis tested the projected tariffs that would prevail in 2010, increased twice after 2004 (by 50% in 2006, 50% in 2009-10 and 22% in every three years thereafter).

Table 13-5: Household Affordability Analysis

Water Water Charge in Sewerage Solid Waste Fee HH Mean Usage 2010 at 2004 Charge in 2010 at in 2010 at 2004 Income* Income in 2010 Price 2004 Price Price Group % of % of % of Rs./Mo. KL/Mo. Rs./Mo. Rs./Mo. Rs./Mo. Income Income Income HIG 21,460 40 215 1.0% 86 0.4% 27 0.1% MIG 7,380 30 133 1.8% 53 0.7% 27 0.4% LIG 3,505 20 83 2.4% 33 0.9% 27 0.8% UP 2,760 16 63 2.3% 25 0.9% 27 1.0% JV 2,510 14 53 2.1% 21 0.8% 27 1.1% MV 1,835 12 43 2.3% 17 0.9% 27 1.4% * Source: September 2004 survey

The results of the analysis show that the proposed tariff charges are within the 5% affordability limit. If the poor households (MV, JV and UP) would want to continue sourcing their water from the street tap, their monthly charges would even be less since water from street tap would remain to be provided free of charge. No affordability problems therefore are foreseen for the proposed tariff charges.

13.7 Project Sustainability

Water supply and solid waste management are revenue generating subprojects whose operation and maintenance costs could be fully covered with user charges. Their respective average tariffs, which are affordable, are higher than their respective AIFCs which indicate financial sustainability. The user charges, however, would have to be revised periodically as discussed in our cost recovery proposals to ensure financial sustainability. In the case of the sewerage subproject, sewerage charges would be adequate to cover the full O&M cost of operations. For the non-revenue generating subprojects, their respective O&M costs would be covered fully through the MC’s budget. The cash flow statements of the MC from FY 2005-06 to 2020-21 detailing the subprojects’ revenues, O&M cost and operating subsidy are presented in Annex E.

The revenue enhancement measures outlined in Chapter 6 (Municipal Finance) and the cost recovery proposals described earlier for revenue generating subprojects will ensure sustainability of the proposed subprojects. Periodic adjustments of own source revenue such as property tax, license fees and direct user charges are vital for the sustainability of the subprojects. The State Government must allow the MC to revise local taxes, fees and charges regularly in accordance with prescribed procedures and within limits set by law to make the MC less reliant on State subsidies. A Financial Improvement Action Plan in Annex D outlines the actions and steps during the implementation and post-implementation periods to ensure the sustainability of the subprojects’ operation by the MC.

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The following table summarizes the results of the financial projections for the MC from FY 2011-12 to 2016-17, the critical years when the MC starts repaying the KSUDP loan obligation. The detailed financial statements are presented in Annex C.

Table 13-6: Summary of Projected Financial Position

Particulars 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Revenue Receipts 1126.0 1200.9 1245.7 1289.2 1441.9 1521.1 Revenue Expenditures 522.2 553.3 584.3 619.2 655.9 695.0 Revenue Surplus Before Debt Service 603.8 647.6 661.4 670.0 786.0 826.1 Debt Service 217.4 211.6 205.8 200.0 194.2 188.4 Revenue Surplus After Debt Service 386.5 436.1 455.6 470.0 591.8 637.7 Cumulative Revenue Surplus 3925.5 4361.6 4817.2 5287.2 5879.0 6516.7 Debt Service Ratio 2.8 3.1 3.2 3.4 4.0 4.4

The results of the financial projections show that the MC could generate sufficient revenues to meet full O&M costs and debt service obligations over the forecast period. The MC has a healthy financial position that could sustain the operation of its subprojects over their economic lives. The annual DSCRs exceed 1.3 throughout the projected period.

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14. SUB-PROJECT RISKS AND ASSUMPTIONS

Every project has its risks, and these can be much greater and numerous with a multi-city, multi- sector project involving a multitude of stakeholders and responsible authorities. However, early acknowledgement of the potential risks will help in mitigating or even eliminating the problems that they may cause during project implementation and beyond. The potential risks and assumptions come in a number of different categories and are classified below for better appreciation.

14.1 Physical Component Risks

Land transfers and affected person (AP) compensation agreed and completed before scheduled construction;

Temporary relocation of street vendor and hawkers likely during civil works construction; adequate provision for compensation to be allocated in the Project;

Different sector contract conflicts to be avoided through careful contract management and supervision. Tender and contract documents to clearly specify contractor responsibilities;

Environmental clearances completed before scheduled construction;

Environmental pollution and nuisance to the public to be minimized during construction through diligent site supervision and monitoring. Tender and contract documents to clearly specify contractor responsibilities;

Contractors perform competently, to time and budget; and

Municipal Corporation (MC) may not have the resources or skills to manage the operation of the new facilities (mainly STP and sanitary landfill sites) in an environmentally sound way.

14.2 Policy Risks

State and local governments’ commitment to necessary decentralization reforms in urban planning and management to provide improved services;

GoK continues to provide adequate guidance and capacity building to support the devolution process of decision making and financial independence of the urban local bodies;

Transfer of water supply and sewerage assets to local self governments not matched by re- structuring and adequate staffing of City Planning and Engineering Departments; and

Political acceptance of required changes in tariffs, taxes, and rates.

14.3 Institutional Risks

GoK and MCs to ensure that PIUs are fully staffed and capable of undertaking duties prior to and during project implementation;

To maintain effective management during project implementation the project leadership at municipal corporation level should remain constant, for at least the first 3 years;

Delays will occur unless there is timely recruitment and satisfactory performance of Design and Supervision consultants;

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Project ownership will suffer unless there is effective consultation with stakeholders and others government agencies;

Public awareness and community mobilization programs must be effective for getting the participation of local stakeholders into implementation of the institutional development program;

Adequate training opportunities for elected officials and municipal staff must be available;

Implementing agencies must be amenable to capacity building; and

There should be no legal obstacles to poor-settlement upgrading.

14.4 Social Risks

Adequate training facilities and technical support system must be available to help Municipal Corporation in implementing poverty alleviation activities;

Mayors must actively support the initiatives under the poverty alleviation component;

Poor communities must be willing and able to participate in city management and project planning activities;

Investment provided by the Project should be converged with other programs to target the urban poor more effectively and for maximum benefit;

Improved services will only benefit the urban poor and vulnerable groups if included in the physical design and if any financial cost recovery is affordable; and

Project funds must not be diverted from the social programs to pay for loan charges.

14.5 Financial Risks

Financial Improvement Action Plan not implemented to scale or schedule necessary for sustained operation and maintenance;

Willingness of beneficiaries to pay for proper management, maintenance and operation of infrastructure facilities;

Tariffs for services not set at appropriate levels or collected efficiently; and

Un-timely provision of counterpart funds.

14.6 Economic Risks

Overrun of project construction costs due to delays;

Indirect economic costs are significant, e.g. negative environmental impacts on agricultural or fisheries production, net loss of income due to shutdown of street vendors/hawkers;

Underachievement of project outputs, i.e. population coverage of improved services is below target or infrastructure improvements not as effective as planned;

Effective demand for the services provided by the improved infrastructure is less than projected due to lack of consumer affordability or willingness to accept change; and

Operation and maintenance of the infrastructure and equipment provided by the Project are not funded and/or carried out at levels sufficient to sustain project benefits.

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