Kolkata is the largest city in the state of West Bengal and the seventh largest in India. It has a population of 4.5 million and contributes at least 13% of West Bengal''s gross domestic product. The city is and will remain the dominant commercial and financial hub in the state. Although its livability has improved, the quality of basic urban services remains below national standards. The gap is particularly noticeable in water supply and sewerage services in regard to coverage, continuity, and quality. This affects the city''s ability to attract investment, facilitate trade, and create jobs, as well as its productivity, its competitiveness, and, most importantly, its quality of life and welfare. Investment and policy gaps hinder how effectively and efficiently institutions deliver services, and how well the policy framework creates an enabling environment for better service delivery and sustainability. These limitations have been manageable, but Kolkata''s expanding economy and deficient investment and maintenance over the years have made narrowing the gaps more urgent. The Kolkata Municipal Corporation (KMC), created to administer the city under the KMC Act in 1980, is responsible for delivering water and sewerage services. The Asian Development Bank (ADB) has been working with KMC since 2000, but only regarding sewerage. The partnership has yielded good results. KMC has a strategy, sector road map, policy framework, and investment plan to address gaps in operational efficiency, institutional effectiveness, policy, and sustainability. The investment program combines physical and other investments. KMC wants ADB to continue its role as a key financing and advisory partner.
The Project proposed for financing under the Periodic Financing Request will deliver three outputs:
(i) Inefficient water supply assets rehabilitated;
(ii) Sewerage and extension to peripheral areas continued; and
(iii) Financial and project management capacity further developed.
|Project Rationale and Linkage to Country/Regional Strategy
||Water supply and sewerage services in Kolkata have excelled the national average, particularly in terms of quality, continuity, and coverage. The city also has a good, low-cost sewage treatment system. However, service provision is not uniform across the city and is increasingly strained by economic expansion. Service is better in the city center than in the periphery. This is both a problem and an opportunity. The problem is that the number of vulnerable households has grown rapidly in the periphery as the population has declined in the center, which is subserviced. The opportunity arises from the KMC''s ability to generate revenues from a still-large population with higher income in the center, with which to fund investment in the periphery. The city has worked hard to narrow service disparities. Efforts started with two loans provided in 2000 and 2006 for the Kolkata Environmental Improvement Project (KEIP), which financed the renovation of 564 kilometers (km) of the sewer drain network and the rehabilitation of three sewage treatment plants, raising the percentage of the population with direct sewer connection from 31% in 2001 to 43% in 2011. The service coverage for water supply is higher than for sewerage, but disparities between central and peripheral areas remain, particularly in service continuity. Unless addressed rapidly, these disparities will widen as population shifts from the center to the periphery.