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.

All nine consulting packages have been awarded.

Out of 7 civil works packages, 6 have already been awarded, construction is ongoing satisfactorily in the following 2 packages: Biratnagar and Birgunj Sewer and Drainage Network, WWTP, Roads and Lanes Improvement Subprojects.

Physical progress in Kavre Valley Integrated Water Supply contract was somewhat low (53%). In case of Butwal integrated solid waste management (ISWM), contractor has been mobilized, joint survey works is completed but construction works could not be initiated due to protests from locals of Charange village raising some social issues. Dialogue is going on with locals to resolve the problem.

Butwal water supply project; contractor was mobilized and construction work is ongoing. 4 deep tube wells have been completed. Operator quarter and 450 m3 reservoir is in progress. 2.6 Km DI pipes and construction materials are stocked at site.

Contract for Birgunj integrated solid waste management project was awarded on 12 Jan 2016 and contractor has mobilized to from 1 April 2016. Construction woks are going on in the landfill area.

Contract award for Butwal auto village sub-project is yet to be finalized. Safeguard due diligence is being carried out recently to assess the safeguard issue raised and reported by auto entrepreneurs (BAEA).

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

Construction works for sewer and drainage network, urban road and lanes improvement and waste water treatment plant subprojects are continuing.

Birgunj:

29.4 Km drain and 3.0 Km sewer has been completed in Birgunj. Other construction works ongoing with completion of earth works in anaerobic pond along with a bypass access road, waste water treatment plant, and Singha bridge.

Biratnagar:

42.1 Km drain and 29.12 Km sewer has been completed. Other construction works ongoing with completion of laboratory building, guard house, outlets, generator house and gabion works at WWTP site.

Birgunj: Construction ongoing for the both packages with target of connecting 12,000 HHs by end of fourth quarter of 2016. For onsite sanitation, 485 and 103 private latrines have already been constructed in Biratnagar and Birgunj respectively.

Construction ongoing for both the packages with completion of 2.09 km of Asphalt concrete road in Biratnagar. Similarly in Birgunj, the contractor has completed preparation of embankment and sub-grade at second bypass and NMC road, sub-base in canal road, concreting of deck slab over Singha river and laying of 5.6 km sub base and 1.3 Km of base course.

Contract for ISWM at Butwal was awarded in Dec 2014 and contractor mobilized to site but works stopped by locals due to social issues. In case of Birgunj, ISWM contract was awarded on 12 Jan 2016. Contractor already mobilized from 1 April 2016 and working at the landfill site.

Construction works of Water Supply Subproject are going on with target of connecting 4900 HHs in Kavre valley by end of Q1, 2017. Similarly, Butwal Water Supply contract was awarded in Dec 2014, and construction works have been initiated with target of connecting 3200 HHs by Q4, 2016.

Butwal Auto Village subproject is being delayed due to delay in resolving the social safeguard issues and PPP modality. Updated Due Diligence Report is being prepared recently that will facilitate in finalization of the contract package, at present FBER is in process.

To early to access.

To early to access.

To early to access. But the Review mission of May 2014 had noted increase in internal revenue of Birgunj Municiplaity as compared to last year.

To early to access as the Project is in implementation phase.

To early to access. Butwal sub metropolitan city was declared as best performer of the Nepalese fiscal year 2071/72.

To early to access.

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 also 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 (SESMR) to ADB. QPR and SESMR for Q2 period has been submitted.

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 also 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 (SSSMR). QPR and SSSMR for Q2 period has 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 has also been ongoing in the selected poverty clusters of Biratnagar, Birgunj and Butwal Municipalities to address the capacity building needs and small scale infrastructure need of marginalized and vulnerable people in the project area.

During Project Implementation 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. Stakeholders' consultation is often found effective to finalize the subprojects, environment and safeguard related issues. In case of community development program (CDP) as well, the project level activities are being developed and implemented in consultation with beneficiaries at site and stakeholders at the municipal level.

Consultation meetings were held, during the recent mission, at Kavre valley and auto village site Butwal. Issues on the ownership of auto village land, continuity of auto business after company takeover, and PPP modality were observed. PCO is carrying out, with ADB guidance, the due diligence on the social safeguard and resolve the issue. 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. Mission advised the PCO to implement, through water/irrigation users committees, the water and irrigation schemes from the CDP budget.

Business Opportunities

An estimated 1,585 person-months (86 international, 1,499 national) of consulting services will 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 (or its equivalent).

An estimated 831 person-months (all national) of local NGO services will be provided to assist the implementation of the community development program. Consulting firms and local NGOs 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 was procured. Extension of time was approved for the DSC services for Butwal, Biratnagar and Birgunj. Variations for the DSC services were approved for Birgunj and Kavre. Similar variations for Butwal and Biratnagar are being submitted within March 2016.

NGO service for Biratnagar has been extended. Whereas, the NGO contract for Birgunj and Butwal were terminated. Butwal and Birgunj municipalities have initiated to continue the CDP activities through their social development sections with technical support from social development expert of DSC and PMSC.

International competitive bidding procedures will be used for civil works contracts estimated to cost more than $1 million, and supply contracts valued at more than $500,000. National competitive bidding procedures will be used for civil works contracts equivalent to $1,000,000 or less, and supply contracts equivalent to $500,000 or less. Shopping will be used for contracts for procurement of works and equipment worth equivalent to $100,000 or less.

Out of 7 planned contract packages, 5 packages had already been awarded and construction works were in progress. Birgunj solid waste management contract package was recently awarded on 12 January 2016; contractor has mobilized. Butwal auto village contract package remained outstanding. The price bid evaluation for auto village contract is still under process.