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.

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

1,585 person-months (86 international, 1,499 national) of consulting services was envisioned under the project 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 engaged using quality- and cost-based selection (QCBS) method with a standard quality:cost ratio of 80:20. Selection criteria for local NGOs included (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 was procured for each project municipality. While construction supervision consultant (CSC) was procured for Kavre Valley for supporting PIU and the municipalities. DSC contracts for Birgunj, Biratnagar and Butwal municipality and Project management support consultant for Project Coordination Office were closed after completion of contract.

For Butwal, remaining works after termination of the DSC contract was carried out through individual consultants, while CSC and PMC of Regional Urban Development Project supported Birgunj, Biratnagar PIUs and PCO respectively.

NGO service for Biratnagar was completed since Dec 2016. Whereas, NGO contracts for Birgunj and Butwal were terminated. After termination of the NGO contracts, Butwal and Birgunj municipalities continued CDP activities through their social development section 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 was 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 equivalent to $100,000 or less.

Out of 7 planned contract packages, 6 packages were awarded. Civil works for construction of Road, Drainage and WWTP at Biratnagar and Birgunj and integrated solid waste management (ISWM) subproject at Birgunj completed. Construction works of Kavre Valley WSS is ongoing at slow pace. Auto village package at Butwal was dropped for ADB financing and ISWM contract and Water Supply contract at Butwal were terminated due to various local issues.