The Project comprises the highest priority investments under the Municipal Calcutta Environment Improvement Program, a long-term master plan prepared under ADB technical assistance. The objectives of the Project are to improve the environment in the outer areas/boroughs of Kolkata, reduce poverty in the low-income areas through affordable access to basic urban service, facilitate community empowerment through participatory processes, protect the environment from adverse developmental impacts, and help develop KMC as a proficient and autonomous municipality. The Project has six components: stakeholder consultation process, sewerage and drainage improvements, solid waste management, slum improvements, canal improvements, and implementation assistance and capacity building.
The original project was for $360 million including $250 million from the ADB loan. However subsequently the Borrower cancelled first $30 million followed by a further $42.2 million due to declining value of the rupee resulting in a net loan amount of $177.8 million. However, due to unprecedented rises in the price of steel, cement, petroleum products and general civil workjs in India due in part to world prices, but also because of the booming Indian economy, the overall cost of the project works have gone up by about 30% in the past 2 years. In order to complete the original scope of work, on the request of the Borrower ADB has approved, a supplementary loan of $80 million.
|Project Rationale and Linkage to Country/Regional Strategy
Calcutta was prioritized for assistance because it suffers from severe environmental problems, and has a municipal corporation that has shown a willingness to implement progressive urban governance reforms in recent years. In Calcutta, urban infrastructure deficiencies are clearly evident. In the Project area, only 17 percent of the population are connected to a sewerage system, and less than 50 percent of the area is covered by a grossly inadequate drainage system. Industrial wastes flow, largely untreated, into the surrounding environment, exposing the community to acids, toxic chemicals, paints and varnish, and other highly toxic compounds. During the wet season, flooding occurs frequently resulting in widespread exposure to pathogens, particularly in the low-lying slum areas. The high population density of the slum settlements remains a major public health concern with regard to the transmission of communicable diseases, especially tuberculosis. Around 50 percent of the target population in the Project area live in slum housing or worse; this represents around 700,000 people. It is estimated that around 26-30 percent of the slum dwelling households in the target area fall below the poverty line - some 180,000 - 210,000 people, or 13-15 percent of the total population in the Project area.
The Project was incorporated in India's then 9th 5 year Plan and ADB's 1997-2000 country assistance plan. It was developed in accordance with the policies of India's 74th Amendment, Act to the constitution to devolve responsibility for municipal services from State line agencies to the local governments' municipal corporations. It also reflected India's strategy to expand development of the major urban centers of India, to provide improved access of the majority of urban dwellers to basic services.