MANILA, PHILIPPINES - The Asian Development Bank (ADB) will provide $400 million in loans to help the Indian city of Kolkata expand and improve water and sanitation systems in peripheral areas of the fast-growing metropolis which are missing out on quality services.

"Kolkata is India's seventh largest city, with a rapidly expanding economy, but it is struggling to provide decent basic services to all its residents, especially those in the booming outer areas," said Fei Yue, Director of the South Asia Urban Development and Water Division at ADB. "If we don't improve the systems now, the disparities between the central and peripheral areas will get worse."

Inadequate investment and poor management means water and sewerage systems fail to serve all the city's residents and are not sustainable to those they do reach. An estimated 300 million liters of water are lost every day along the 5,700 kilometer network, undermining income for the water suppliers. At the same time, much of the operating machinery - some up to 90 years old - uses far more electricity than modern equipment.

The ADB funds will be provided in three batches through a multitranche financing facility. The first loan of $100 million will help restore the original production capacity of two existing water treatment plants, cutting water losses, and gradually rolling out 24-hour water supply in target areas. New sewer pipes, pump stations, and 2,300 new sewerage connections will be installed in the southern peripheral part of the city.

The loan will also help the Kolkata Municipal Corporation put together a long-term cost recovery and subsidy plan that will ensure high-quality water and sanitation services are maintained.

Subsequent tranches will continue installing sewage and direct water pipes in the eastern and western outlying areas of the city and build three sewage treatment plants using technologies that reduce greenhouse gas emissions.

Ultimately, the goal of the Kolkata Environmental Improvement Investment Program is to restore water production capacity to 1,478 million liters per day and ensure leaks on 700 kilometers of water pipes are repaired by 2023. It aims to install 170 kilometers of sewer-drain pipes and provide new sewerage connections to 27,000 homes, at least 15% of which will be vulnerable households or households headed by women. Installation of 40,000 water meters in pilot areas should help improve and sustain water management.

ADB's loans will help the Kolkata Municipal Corporation implement its $4 billion water and sewerage plan. They build on two previous ADB loans totaling $330 million in 2000 and 2006 to renovate the city's sewer-drain network.

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