|Project Rationale and Linkage to Country/Regional Strategy
The rapid urban population growth, coupled with the Government?s inability to keep pace with the demand for infrastructure and services has led to a series of urban environmental concerns in the secondary towns and constraining the economic growth of Nepal. Urban sector economy plays a key role for providing services and employment opportunities to the rural hinterland.
Nepal?s Country Strategy and Program (CSP) (2005-2009) promotes investments to meet the urgent need for safe water supply and sanitation services in urban areas observing rapid urbanization, aiming to foster inclusive social development. Nepal is ranked 142nd out of 177 countries in terms of human development index shown in the Human Development Report 2007/2008, which clearly warrants further needs of social development. Although proportion of population with access to clean drinking water is reported at rather high 76.6% in 2006 by the Government, figures substantially vary depending on the source, and water supply is still considered insufficient in both volume and quality even in Kathmandu, the capital. Situation for sanitation and solid waste management is even worse, thus necessitating urgent intervention in these sub-sectors. Investments in these sub-sectors in selected secondary towns, catching up with the rapid and haphazard urbanization, are essential for providing clean and developed urban environment in line with the National Urban Policy (NUP) 2007. Moreover, the CSP and NUP address the need to strengthen rural-urban connectivity for promoting broad-based economic growth. Therefore, other urban infrastructure, such as improvement of road network, bus terminals and markets, would play an important role in enhancing rural-urban links.
These approaches are still valid and confirmed in Nepal Country Operations Business Plan (2008-2010) and the latest Country Programming Mission conducted in April 2008, though the political and security context in Nepal has changed since the preparation of the CSP. The proposed project preparatory technical assistance (PPTA) and ensuing Project intends to support the Government for an inclusive social development and broad-based economic growth through provision of environmental and other urban infrastructure in selected secondary towns by taking an integrated approach. The Project will build on the lessons learned under the on-going Urban and Environmental Improvement Project (Loan 1966-NEP), in particular in terms of implementation framework and financial arrangement.