LOAN: UZB 33548-01 | Urban Water Supply

Uzbekistan, Rep. of

LOAN: UZB 33548-01

Urban Water Supply

•	Missions
•	Loan Approval Date
•	Estimated Completion Date
•	Cost and Financing Plan
•	Description
•	Development Objectives
•	Thematic Classification
•	Poverty Classification
•	Rationale
•	Objectives and Scope
•	Policy Dialogue
•	Environment Category
•	Env't Impact and Mitigation
•	Social Aspects and Remedies
•	Benefits and Beneficiaries
•	Public Consultation
•	Beneficiary Participation in Formulation
•	Beneficiary Participation in Implementation
•	Consulting Services
•	Procurement
•	Contacts
•	Remarks

Location
Gulistan, Djizzak and Karshi

Sector
Water Supply, Sanitation & Waste Management /Water Supply & Sanitation

Initial Listing
3 January 2000

Most Recent Update
20 February 2007

Executing Agency(ies)

Uzbekistan Communal Services Agency

Missions

Loan Approval Date

27 September 2001

Estimated Completion Date

June 2007

Cost and Financing Plan (in US$ million)

Source	Foreign Cost	Local Cost	Total
Bank	32.90	3.10	36.00
Cofinancing	0.00	0.00	0.00
Borrower	0.00	29.50	29.50
Beneficiaries	0.00	0.00	0.00
Others	0.00	0.00	0.00
Project/Program Cost	32.90	32.60	65.50

OCR ADF Total

Loan Amount 36.00 0.00 36.00

Description

The Project supports the Government's objectives of decentralization, human development, and social protection by providing improved urban water supply services and training programs to strengthen institutional capacity and community participation. The project area covers three provincial capital cities, Karshi, Djizzak, and Gulistan, in the central and southern parts of the country, with high incidences of poverty. The Project will improve water supply services to about 484,000 people where about 45 percent are poor.

Thematic Classification

Poverty Classification: Poverty Intervention

Rationale

Since independence in 1991, inadequate budgetary support for urban infrastructure in Uzbekistan has led to deterioration in service provision. Operation and maintenance (O&M) of aging assets is becoming increasingly difficult, performance efficiency has dropped and the cost of service delivery has risen. Since urban water supply plays a vital role in determining the living standards and pattern of human development, it is necessary to halt its deterioration. The capacity of the sector agencies concerned must also be developed to enable them to implement upgrading programs and to undertake O&M of the systems in the long term. In line with the Government's policy on decentralization of authority and responsibility for urban infrastructure and its assets to the local authorities, the Project will improve the provision and management of water supply to the cities of Karshi, Djizzak, and Gulistan. All three cities have urgent need for rehabilitation and upgrading of water supply facilities and services.

Objectives and Scope

The main objective of the Project is to improve the quality of life and health conditions in the provincial capital cities of Karshi, Djizzak, and Gulistan, where there are high proportions of poor people, through the improvement of basic water supply services. The Project consists of two components: water supply and capacity building. The water supply component will include rehabilitation and upgrading of the water supply systems. The aim is to secure supply, minimize losses, raise supply efficiency, and lower unit costs. Capacity building includes a capacity building program; social development measures such as NGO involvement, education and awareness; and project management consulting services for project implementation support. Community participation and consumer rights awareness to improve the capacity of consumers to participate in project planning, implementation, monitoring and management of the improved facilities will also be provided under the Project.

Policy Dialogue

Policy dialogue with the Government during project preparation has been incorporated into the project design. These include institutional reform and decentralization, raising the standards of urban water supply service delivery and maintenance, financial performance of the utility agencies, cost recovery, stakeholder participation, poverty focus, and capacity building. The proposed Project is aimed at supporting the Uzbekistan Government's reforms in the communal services system through decentralization fo service delivery and increasing the level of financial and operational sustainability.

Environment Category: B

Environment Impact and Mitigation

Each of the water supply component in the three project cities, and the Project as a whole, will generate positive environmental impacts. The project physical components were examined against criteria specified in ADB's Environmental Guidelines for Selected Infrastructure Projects. None of them will cause significant environmental impacts based on the screening of possible environmental consequences using ADB checklists. The Project will reduce per capita water consumption (and loss), reduce energy requirements through improved efficiency of equipment and distribution networks, and improve the quality of water released into the distribution networks. The Project will not adversely affect natural cultural resources, or sensitive ecological zones, and no resettlement of residents is required.

Social Aspects and Remedies

In developing the Project 1500 households have been surveyed. The results of the survey have been used to maximize the impact of the Project on the poorer households and to develop a public participation plan to support project sustainability and accountability by providing a framework for the participation of drinking water and other urban infrastructure service consumers. This will take the form of a consumers' committee representing consumer stakeholders in the PIU. The composition of this committee will include representatives from Mahallah Aksakals Committee representing consumers; housing partnerships; city womens' committee and the relevant city administration departments for health and education, and NGOs.

Benefits and Beneficiaries

The Project will directly benefit about 484,000 people in the cities of Karshi, Djizzak, and Gulistan, where about 45 percent of the population are poor. The support for decentralized management and capacity building will enhance the efficiency and sustainability of urban water supply services at the local levels in Uzbekistan. To comply with the needs and demands of the community, a participatory approach has been adopted to formulate and design the Project and the community will continue to be involved in implementation. An improved and more secure water supply to areas both currently served and without existing piped supply will ensure improvements to the health and general welfare of the population, in particular the poor who are less able to afford other coping mechanisms. By reducing water supply losses and wastage the existing inefficiencies and resulting costs can be minimized. Security of supply and improved standards of service will increase the willingness to pay for service and will assist in cost recovery. Financial management and accounting improvements, including meter reading, billing, and collection will improve tariff collection levels and the viability of the implementing agencies. The economic internal rates of return are 18.1 percent in Djizzak, 17.3 percent in Gulistan, and 24.0 percent in Karshi, exceeding the economic opportunity cost of capital, which is assumed to be 12 percent. The financial internal rates of return are 9.5 percent in Djizzak, 9.5 percent in Gulistan, and 8.4 percent in Karshi, exceeding the WACC, which is about 5.0 percent, and demonstrating that each component is financially viable.

Public Consultation

Arranged by Borrower and TA Consultants

Date for Consultation : Undertaken during project preparation and to continue during project implementation

Groups Consulted : Local civil committees representing consumers; housing partnerships; the city womens' committee; and NGOs.

Beneficiary Participation in Formulation

To comply with the needs and demands of the community, a participatory approach has been adopted to formulate and design the Project. The groups involved include represents from local civil committees, housing partnerships, women's committee, and various NGOs.

Beneficiary Participation in Implementation

The community, NGOs, and CBOs will continue to be involved in the implementation of the Project. In addition, the Project will include (i) public health awareness campaign run by women to enable the full benefits of improved drinking water supply to be realized, and (ii) community participation and consumer rights awareness project to improve the capacity of consumers to participate in project implementation, monitoring and management.

Consulting Services

The Project will require 405 person-months of consulting services (45 person-months of international and 360 person-months of domestic) for (i) design engineering, (ii) finance and accounting, (iii) social development, (iv) community development, and (v) project management. Consultants will be engaged in accordance with ADB's Guidelines on the Use of Consultants and other arrangements satisfactory to ADB for the engagement of domestic consultants.

Procurement

The procurement of goods and services financed by the ADB loan will be undertaken in accordance with ADB's Guidelines for Procurement. Modes of procurement will include international competitive bidding, local competitive bidding or international shopping.

Contacts

Bank

Amy S.P. Leung
Principal Urban Development Specialist
EASS
Tel. No.: (632) 632-6730
E-mail: aleung@adb.org

Executing Agency
Uzbekistan Communal Services Agency

Contact Person : Utkur A. Khalmukhamedov, Director General
Tel. No. : (998-712) 341243
Fax. No. : (998-712) 341243
E-mail :

Contact Person :
Tel. No. :
Fax. No. :
E-mail :

Remarks