Nepal: Secondary Towns Integrated Urban Environmental Improvement Project

Transport / Urban roads and traffic management

Water and other urban infrastructure and services / Other urban services - Urban policy, institutional and capacity development - Urban sewerage - Urban solid waste management - Urban water supply

The National Urban Policy adopted by the government in 2007 gives priority to (i) achieving a balanced national urban structure6 by directing infrastructure development and investment; (ii) improving the quality of urban life by building a clean, safe, and well-developed urban environment; and (iii) setting up effective urban management by empowering capable local institutions. The 3-year interim plan (FY2008 FY2010) under the policy looks forward to government investments in urban infrastructure and other services, and to local institutions empowered and strengthened to build a clean, safe, and prosperous urban environment. While

productivity in the urban areas is higher and poverty substantially lower, infrastructure development and service delivery have fallen behind in those areas. Public investments have not kept pace with the growth of the urban population, swelled by internal conflicts and the dearth of economic and employment opportunities in the countryside.

Urban environmental conditions, already deteriorating, have worsened: inaccessible and poor-quality drinking water and sanitation facilities, uncollected or improperly dumped waste, water pollution from untreated domestic and industrial wastewater, and waterlogging. Moreover, urban services outside the Kathmandu valley are scarce. As a result, premature death, disease, and associated economic burdens disproportionately affect the poor and the vulnerable. Poor health saps economic growth by reducing labor productivity and holding back educational attainment.

Further development in the Kathmandu valley has its physical limits. New urban centers will inevitably emerge. But the urban environment in the urban centers urgently needs improvement to make up the lag in economic development in towns outside the valley and promote social and economic development in the regions of Nepal. The municipalities of Biratnagar, Birgunj, and Butwal were selected for the project on the basis of (i) economic growth potential, (ii) demand for urban services, and (iii) urban management capacity. Each town is the main urban center of an industrial corridor and of importance in external trade.

The project is in line with ADB's Nepal country partnership strategy. The project focuses on a small number of physically integrated components (drainage, sewerage and road improvement, and solid waste management in the same area); is confined to a few larger municipalities with relatively higher technical and financial capacity to implement the project and create visible impact; and provides capacity development support before project implementation.

The Project is being implemented in line with the set outcomes. All nine consulting packages were awarded; out of planned seven civil works packages; six have already been awarded; and one (Auto-village) package has been dropped out from ADB financing.

Construction is ongoing satisfactorily in Biratnagar and Birgunj Sewer and Drainage Network, WWTP, Roads and Lanes Improvement subprojects. Construction progress of Kavre Valley Integrated Water Supply Subproject was low from the beginning. Now it has made considerable progress. Construction progress of SWM Birgunj is very slow due to non performance of the contractor; but now the contruction rate has slightly improved with achievement of 37% progress. with regard to Butwal integrated solid waste management (ISWM), contractor was mobilized and joint survey works was completed, but construction works could not get initiated due to protests from local people of Charange village not allowing to access the site. Similarly, construction progress of Butwal water supply subproject is very low due to various local issues. Despite various efforts from the Government and ADB the project has not been able to take its pace.

Therefore, the project is likely to achieve its outcome except related to Auto village, to provide an improved and affordable municipal services delivered effectively, efficiently, and reliably by accountable project municipalities.

1. Reliable, affordable and effective municipal infrastructure developed

1.1 Drainage and sewerage systems improved (Biratnagar, Birgunj)

1.2 Urban roads and lanes improved (Biratnagar, Birgunj)

1.3 Solid waste management systems improved (Birgunj, Butwal)

1.4 Water supply systems expanded (Kavre Valley, Butwal)

1.5 Other urban infrastructure facilities improved (Butwal)

1.6 Community development program undertaken, including health and hygiene education , 3R (reduce, reuse, and recycle) promotion, skills, training and investment in small-scale community facilities

2. Capacity of the municipalities and the central government strengthened for project management and operation

2.1 Municipalities strengthened in terms of financial, technical and institutional capacity

Output 1.1: Drainage and sewerage systems improved (Biratnagar, Birgunj)

Birgunj: Construction works for sewer and drainage network, urban road and lanes improvement and waste water treatment plant subproject is ongoing with completion of :

-44 km storm water drainage and 3.8 km sewer lines; and

- earthwork in anaerobic pond, and facultative ponds completed, with ongoing works in components of the WWTP with total progress of 75%.

Biratnagar: Construction works for sewer and drainage network, urban road and lanes improvement and waste water treatment plant subproject is ongoing with completion of:

i) 70 km storm water drainage and 43.67 km sewerlines (43.76 km was the total length of planned sewer lines).

ii) laboratory building, guard house, outlets, generator house and gabion works at WWTP site with completion of 91.15% works of the WWTP.

Output 1.2: Urban roads and lanes improved (Biratnagar, Birgunj)

Construction ongoing in both packages with completion of 49.39 km roads/lanes:

--Biratnagar: 40.29 km, and ---Birgunj: 9.10 km

Output 1.3: Solid waste management systems improved (Birgunj, Butwal)

Integrated solid waste management (ISWM) sub-project Birgunj: Contract was awarded on 12 Jan 2016. Pace of execution of contract is very slow and disappointing. About 37% progress reported against elapsed time of 100% due to poor performance of the contractor.

ISWM sub-project Butwal: ISWM contract in Butwal was awarded in Dec 2014, and contractor was mobilized to site but works could not be started due to protests from the local community.

Output 1.4: Water supply systems expanded

Kavre Valley water supply sub-project (WSSP): Construction is ongoing with physical progress of 95% against elapsed time of 100%.

Butwal WSSP: Total progress 27.44% against elapsed time of 88%. The progress has been delayed due to various local issues.

Output 1.5: Other urban infrastructure facilities improved (Butwal Auto Village):

The subproject was being delayed due to various local issues during project implementation. Therefore, ADB has decided not to finance the subproject.

Output 1.6 Community development program:

524 and 103 numbers of private latrines are already constructed in Biratnagar and Birgunj respectively. In addition, construction of 6 public toilets have been completed in Biratnagar.

Output 2: Capacity of the municipalities and the central government strengthened for project management and operation

To early to access. Comprehensive financial management improvement

plan (CFMIP) is in implementation in Biratnagar and Birgunj Municipalities to strengthen financial capacities of the municipalities through enhancing tax base and tax net. Accordingly, Infrastructure tax has been already introduced in

Biratnagar and integrated property tax (IPT) will be introduced in near future. In Birgunj IPT has been already introduced. The review mission of May 2014 had noted increase in internal revenue of Birgunj municiplaity in comparison to the previous year.

Out of 4 project municipalities, Butwal was ranked first as per the municipal performance ranking in the fiscal year of 2069/70 and FY 2071/72 (jointly with Dhankuta).

The implementing agencies had done environmental examinations, including environmental management plans, (EMPs), for the subprojects during the feasibility study. An environmental assessment and review framework was therefore prepared. The framework sets out the requirements for project screening and classification, subproject selection, information disclosure to and consultation with the affected people, environmental assessment, EMP development and implementation, and monitoring and reporting.

The EIA/IEE of the subprojects has been prepared as per the requirement of the Government and ADB's Environment Safeguard Policy. Project implementation is being done in line with the respective Environment Management Plan (EMP) of the Project.

The initial environmental examinations found the planned subprojects to have only small and localized adverse impact on the environment, which can be mitigated with the mitigation measures proposed in the EMPs. On the other hand, the improvements in drainage and sewerage systems, solid waste management systems and community development programs will have significant positive impact on community hygiene and overall environmental sanitation situation.

Project Implementation Units (PIUs) have updated IEE/ EIA of the sub-projects based on the final engineering design. PIUs have been complying and will comply with the EMPs of the respective subprojects while implementing the projects. Project coordination Office (PCO) has been monitoring safeguard compliance by each PIU in accordance with approved EMPs, and is reporting its implementation status in its quarterly as well as semiannual environmental safeguard monitoring report (SMR-Env) to ADB. QPR for Q4 2017; and SMR-Env as well as SMR-Social covering July-December 2017 have been submitted by the Project coordination Unit.

Several subprojects involve land acquisition and involuntary resettlement, but the involuntary resettlement impact is not considered significant. Draft resettlement plans have been prepared for these subprojects in compliance with the government's and ADB's policy requirements. A resettlement framework has also been prepared.

The PIUs have updated/ have been updating the resettlement plan in coordination with PCO, during detailed design and on need basis during implementation of the civil works packages (subprojects), they are implementing the final resettlement plan (RP) during the Project implementation. PCO is monitoring compliance to the RPs by the PIUs and is also reporting the compliance status to ADB through quarterly progress reports and semiannual social safeguard monitoring report (SMR-Socio) to ADB. QPR for Q4 2017 and SMR-social for July to December 2017 have been submitted.

Considering the nature and scale of these subprojects, the impact on indigenous peoples will be limited to a few involuntary resettlement and land acquisition cases. Accordingly combined RP and Indigenous People's Plan has been prepared for Kavre Valley Water Supply Sub Project. The resettlement plan includes an indigenous peoples plan, and the resettlement framework includes an indigenous peoples planning framework, with special assistance measures for indigenous people and other vulnerable groups. The Project implementation units in the respective municipalities will implement the subprojects in compliance with the prepared RPs.

As sanitation services improve, so will the health benefits for indigenous people. In addition, the gender equality and social inclusion plan contains specific actions favorable to indigenous people. The community development program were also conducted in the selected poverty clusters of Biratnagar, Birgunj and Butwal Municipalities to address awareness needs on health and hygiene; and solid waste management issues; capacity building needs; and small scale infrastructure need of marginalized and vulnerable people in the project area.

During Project Implementation concerned stakeholders at the central and the municipal level were consulted as needed regarding the Project progress, underlying issues and to develop way forward. Stakeholder's consultation is often found effective to finalize the subprojects, environment and safeguard related issues. In case of community development program (CDP) also, the Project level activities were developed and implemented in consultation with beneficiaries at site and stakeholders at the local/ municipal level.

Consultation meetings were held, during last missions at Kavre valley and Butwal. Consultation meetings at the local level regarding Auto Village subproject-Butwal were effective to resolve many issues among the various issues,. However ADB had to drop inancing to the subproject due to some crucial unresolved issues at the local level. Similarly, despite several efforts of ADB as well as the EA, effective consultation could not be carried out with the local people of the Charange Village, who are protesting the ISWM project-Butwal from the beginning; as the community people denied for the consultation meetings.

In Bhumidanda-Kavre, there was a public demand for water supply and irrigation schemes (est. cost $60,000) as a compensatory measure for water diversion. The mission advised the PCO to implement, through water/irrigation users committees, the water and irrigation schemes from the CDP budget. Now the water and irrigation schemes are about to complete and works at intake area has progressed.

About 1,585 person-months (86 international, 1,499 national) of consulting services was be provided to (i) facilitate project management and implementation including overall monitoring and evaluation at the central level; (ii) carry out detailed design and construction supervision for individual subprojects, including monitoring for safeguards compliance; and (iii) provide institutional development support for the establishment and operationalization of the Kavre Water Supply Management Board.

About 831 person-months (all national) of local NGO services was provided to assist the implementation of the community development program. Consulting firms and local NGOs were/will be engaged using the quality- and cost-based selection (QCBS) method with a standard quality: cost ratio of 80:20. Selection criteria for local NGOs will include (i) experience relevant to the project activities and objectives, (ii) experiences in the district. where the Project municipalities are located, (iii) financial integrity, and (iv) record of proven competence in community mobilization and public health sensitization programs.

A separate design and supervision consultant (DSC) services for each project municipality were procured. DSC for Biratnagar, Birgunj and CSC for Kavre are supporting PIUs of the municipalities; whereas contract of DSC for Butwal municipality was closed after completion of contract. Butwal is in process of recruiting individual consultants.

NGO service for Biratnagar has been completed from Dec 2016. Whereas, NGO contracts for Birgunj and Butwal were terminated. Butwal and Birgunj municipalities continued the CDP activities through their social development sections with technical support from social development expert of DSC and PMSC.

International competitive bidding procedures was used for civil works contracts estimated to cost more than $1 million, and supply contracts valued at more than $500,000. There is provision of National competitive bidding procedures for civil works contracts equivalent to $1,000,000 or less; supply contracts equivalent to $500,000 or less; and for shopping contracts for procurement of works and equipment worth equivalent to $100,000 or less.

Out of 7 planned contract packages, 6 packages had already been awarded and construction works are in progress. Butwal auto village contract package has been dropped by ADB from financing due to various local issues.