India : MFF - North Karnataka Urban Sector Investment Program - Tranche 2

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

Enhance capacity of urban infrastructure - Slum Improvement

Enhance capacity of urban infrastructure - Institutional Development

Enhance capacity of urban infrastructure - Non-Municipal

Enhance capacity of urban infrastructure - Water Supply

Enhance capacity of urban infrastructure - Sanitation (Sewerage)

1. Slum Improvement - Physical works in progress. 3,159 slum households, including 600 women headed households, (out of 4,000) have been provided with improved water facilities and 5,323 slum households (out of 4,000) with improved sanitation. NGOs were appointed and have provided support for training and capacity development activities.

2. Institutional Development:

2.1 Implementation of property tax as amended in the Karnataka Municipal Act 1964 with 75% coverage - Achieved in all 25 ULBs. Self-assessment system/capital value system for property tax has been undertaken in all 25 project towns; and collection levels are improving, averaging nearly 83.53% (till end of Mar 2015 for financial year 2014-15). To secure further improvements, base and property mapping is underway in all towns except for 5 towns, which are being financed under tranche 3.

2.2 Application of the Fund-Based Accounting System (FBAS) for all ULBs - Achieved in all 25 ULBs. However, there is a need to further improve property values assessments and collection levels. For this purpose, base and property mapping is underway in all NKUSIP towns except for five, which are being taken up under Project 3.

2.3 Introduction of volumetric water tariff (w/ water supply subproject before commissioning) for all 9 ULBs - GOK first directed ULBs to adopt volumetric tariffs in 1996 and has since provided both technical support (through advisory functions and preparation of relevant manuals) and community education support (through the Education and Communication campaigns under Project 2) to enhance acceptance of tariffs among citizens. Effective 20 July 2011, GOK issued a revised tariff order making metering compulsory. All ULBs receiving water subprojects have passed resolutions ahead of subproject implementation. ULBs, however, have low collection efficiencies (partly due to the poor water service being provided prior to completion of works). Project 4 considers operator contracts for watery supply and operator payments would be out of volumetric water tariff collected.

2.4 Introduction of sewerage tariff (w/ sewerage subproject before commissioning) for all 12 ULBs - For many of NKUSIP s ULBs, sewerage services are being introduced for the first time and thus few ULBs have a sewerage tariff in place. Effective 20 July 2011, GOK issued a revised tariff order requiring the introduction of sewerage tariffs.

2.5 Introduction of PPP contract - Contract awarded to successful bidder for 24x7 water supply subproject in Ilkal under PBMC. Civil works are completed and preparatory works for operations is ongoing. Mainstreaming activities underway in Project 4.

3. Non-Municipal Infrastructure - Improvement of Tourism Infrastructure in 2 ULBs and Construction of District Information Centers in 2 ULBs were completed. Procurement of fire-fighting equipment for 7 ULBs consisting of 4 packages has also been completed.

4. Sanitation - Physical works are still in progress: 5,400 households with sewerage facilities; 738 km, of new sewers built/rehabilitated; 8.05 km of new drains have been built/rehabilitated.

5. Water Supply - Physical works are still in progress: 11,850 households with improved water facilities; 868 km of pipe networks have been built/rehabilitated.