Japan and ADB Support Plans to Improve Indian State of Bihar

News Release | 21 August 2008

MANILA, PHILIPPINES - A project to improve living conditions and the environment in key urban centers in the Indian state of Bihar has been given a boost by Japan and the Asian Development Bank (ADB).

The Japan Special Fund, through ADB, will provide a grant of $1 million to help prepare the groundwork for the proposed Bihar Urban Development Project in the cities of Patna and Gaya, the state's two largest cities. The government of Bihar will contribute a further $250,000.

An earlier ADB study found Patna and Gaya have major deficiencies in their key urban services, such as water supplies, sewerage systems and solid waste management systems. Large quantities of water are lost to leaks, sewerage treatment is patchy or non-existent, and much of the solid waste produced goes uncollected.

Many urban dwellers, especially the poor, lack access to these basic services and are forced to endure unsanitary and unsightly living conditions.

The grant will be used to assess the feasibility of all aspects of the development project, which will be financed with a loan from ADB in coming years. It will help ensure that the agencies involved are well prepared and have the necessary capacity to implement the project. In the past, urban sector projects in India have often been delayed because of a lack of preparation at the start.

The grant will also help the government of Bihar set up project management and implementation units, and assess and design an appropriate customer tariff structure and target tax collection rate.

"The proposed project will help to achieve the Millennium Development Goal of ensuring a sustainable environment, and in particular the target of reducing the proportion of people without sustainable access to safe drinking water," said Gyongshim An, an Urban Development Specialist in ADB's South Asia Department. She noted that the project is being designed to ensure that the services provided will be affordable to the poor.

Bihar - the third most populous state in India though the least urbanized - has suffered from extremely slow economic growth over the past few decades, which has hampered the development of public sector works. The Government of India has been striving to improve urban infrastructure with financial and institutional support but has not been able to keep up with the rising demand for services. This will be the first externally funded urban project undertaken in the state.

India's urban population is now the second largest in the world, after the People's Republic of China.