The Asian Development Bank is working with India to improve urban services and strengthen municipal and project management capacity in 14 towns of North Karnataka. The project is expanding potable water systems to provide continuous water supply in 12 towns, completing of sewer networks in three towns, and improving the road network in two towns.
|Project Name||MFF - North Karnataka Urban Sector Investment Program (Facility Concept)|
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Gender Equity and Mainstreaming
Governance and capacity development
|Sector / Subsector||
Water and other urban infrastructure and services / Water supply and sanitation
|Gender Equity and Mainstreaming||Effective gender mainstreaming|
|Description||The North Karnataka Urban Sector Investment Program will help GoK rehabilitate existing urban infrastructure facilities and construct new ones in ULBs of North Karnataka. The Investment Program will assist GoK in meeting its urban sector investment plan and providing water supply systems, sewerage systems, drainage, and urban road resurfacing and junction improvements. The living environment in slums will be improved with the provision of basic services. Firefighting capacity improvements, tourism infrastructure, and lake rehabilitation are also included. The Investment Program will introduce private sector participation (PSP) in selected subsectors in selected ULBs and support ongoing institutional reforms and training for ULB staff currently being conducted by GoK under the Nirmala Nagar Program (NNP).|
|Project Rationale and Linkage to Country/Regional Strategy||
A High Power Committee Report for Redressal of Regional Imbalances (the HPC report) prepared by GoK in 2002 indicates that while some diversification has taken place in North Karnataka, agriculture remains the primary economic driver in most districts in North Karnataka. The economy of North Karnataka has, therefore, remained susceptible to weather patterns, and it is clear that the current economic growth is not shared on an equitable basis throughout the state. The key reason for the limited diversification in North Karnataka is the lack of adequate urban infrastructure and services in the ULBs.
The Project supports the investment plan recommended by the HPC report and has selected 25 ULBs located in North Karnataka to be assisted with their municipal functions, i.e., basic urban services, mandated by the 74th Amendment Act to the Constitution of India.
The Project would be a logical progression of previous ADB assistance to the State in the southern and coastal areas, and would specifically address the imbalance in the level of infrastructure and services in the ULBs in North Karnataka. Furthermore, the Project would provide an opportunity to further develop the ongoing relationship between ADB and the Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC) and together build up the state-level capability as well as promote/involve the private sector to design, construct, operate and maintain infrastructure facilities for efficient and equitable provision of basic urban infrastructure and services. Urban service delivery and operation and maintenance (O&M) is the responsibility of ULBs under Karnataka Municipalities Act (1964) and Municipality Corporations Act (1976). To fulfill the responsibility with additional infrastructure created under the Project, the Project ULBs need to maintain a financially sound balance sheet, and employ adequate, capable human resources.
The proposed Investment Program is highly relevant to ADB?s country strategy and program (CSP) for India, which rests on the three pillars of: (i) pro-poor growth for reducing income poverty; (ii) social development for reducing human poverty; and (iii) good governance for leveraging and maximizing the impact of development.
|Impact||Improvement of Urban Infrastructure and services resulting in overall improvement in quality of life in project ULBs; and related increase in economic opportunities and growth in north Karnataka and reduced imbalances between north Karnataka and the rest of the state|
|Description of Outcome||
Improved basic urban services for at least the 4.3 million people living in the initially identified 25
Investment Program ULBs
Improved and sustainable infrastructure services within Investment Program ULBs that will in turn benefit the agriculture, industry and tourism sectors
PBDPS and/or PBMC modalities implemented and interest generated in other Indian states
|Progress Toward Outcome|
|Description of Project Outputs||
Implemented investment program for sanitation
Implemented investment program for water supply
Implemented investment program for slum improvement in Investment Program ULB slums
Implemented investment program for nonmunicipal infrastructure
Implemented investment program for urban transport improvement
Improved institutional capacity
|Status of Implementation Progress (Outputs, Activities, and Issues)|
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation|
|Consulting Services||100% Domestic Investment Program Consultants will be recruited under ADB's Guidelines on the Use of Consultants to assist the Government in implementing the Investment Program during the detailed engineering design (DED) and supervision phase for quality assurance and monitoring of both construction and operations. The recruitment will follow ADB's quality-and-cost-based (QCBS) selection method. Recruitment of private contractors under PBMC will be carried out under ADB's Guidelines on the Use of Consultants with some adjustments.|
|Procurement||Procurement of all goods and services under the Investment Program will be undertaken in accordance with ADB's Guidelines for Procurement, and in accordance with the rules and regulations of the Government acceptable to ADB. The Government has requested: (i) advance action for recruitment of Investment Program Consultants, and procurement and installation of household water meters in selected Investment Program ULBs; and (ii) retroactive financing of Investment Program Consultants, public awareness campaigns and workshops, procurement and installation of household water meters in selected Investment Program ULBs, implementation of the Nirmala Nagar Program (NNP) to cover the remaining 6 Investment Program ULBs, and incremental administrative costs of KUIDFC and the Government of Karnataka (GoK) related to the Investment Program. For selected sub-projects, alternative procurement modalities, such as Performance-Based Deferred Payment Structure (PBDPS) and Performance-Based Management Contract (PBMC), will be adopted in order to increase the level of PSP in the sub-sectors. The PBDPS modality requires private contractors to partially bridge-finance the construction and subsequent O&M costs of the sub-projects in exchange for annuity-like payments over a 10-year period, which comprise base fees that will be determined through bidding and bonuses that will be determined according to predetermined performance indicators. In addition to introducing private investments into the sector, thereby facilitating greater leverage of public funds, PBDPS will ensure higher accountability of the contractors by combining construction and actual service delivery during the operation phase into one single contract package, which cannot be achieved easily under conventional procurement modalities.|
|Responsible ADB Officer||Dasgupta, Saugata|
|Responsible ADB Department||South Asia Department|
|Responsible ADB Division||India Resident Mission|
|Concept Clearance||07 Sep 2004|
|Fact Finding||20 Jun 2005 to 01 Jul 2005|
|MRM||29 Aug 2005|
|Approval||06 Dec 2006|
|Last Review Mission||-|
|PDS Creation Date||28 Mar 2006|
|Last PDS Update||02 Mar 2011|
MFF Facility Concept 0006-IND
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||270.00||Cumulative Contract Awards|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
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|Title||Document Type||Document Date|
|MFF - North Karnataka Urban Sector Investment Program||Facility Administration Manual||Apr 2008|
|North Karnataka Urban Sector Investment Program||Reports and Recommendations of the President||Nov 2006|
|Framework Financing Agreement for North Karnataka Urban Sector Investment Program between India||Framework Financing Agreement||Oct 2006|
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
Evaluation Documents See also: Independent Evaluation
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